PrefBlog

Brookfield Office Properties Inc., a subsidiary of Brookfield Property Partners has announced:

that it has determined the fixed dividend rate on its Class AAA Preference Shares, Series R (“Series R Shares”) (TSX: BPO.PR.R) for the five years commencing October 1, 2016 and ending September 30, 2021. If declared, the fixed quarterly dividends on the Series R Shares during that period will be paid at an annual rate of 4.155% ($0.259688 per share per quarter).

Holders of Series R Shares have the right, at their option, exercisable not later than 5:00 p.m. (Toronto time) on September 15, 2016, to convert all or part of their Series R Shares, on a one-for-one basis, into Class AAA Preference Shares, Series S (the “Series S Shares”), effective September 30, 2016.

The quarterly floating rate dividends on the Series S Shares have an annual rate, calculated for each quarter, of 3.48% over the annual yield on three-month Government of Canada treasury bills. The actual quarterly dividend rate in respect of the October 1, 2016 to December 31, 2016 dividend period for the Series S Shares will be 1.0057% (3.99% on an annualized basis) and the dividend, if declared, for such dividend period will be $0.251425 per share, payable on December 30, 2016.

Holders of Series R Shares are not required to elect to convert all or any part of their Series R Shares into Series S Shares.

As provided in the share conditions of the Series R Shares, (i) if Brookfield determines that there would be fewer than 1,000,000 Series R Shares outstanding after September 30, 2016, all remaining Series R Shares will be automatically converted into Series S Shares on a one-for-one basis effective September 30, 2016; and (ii) if Brookfield determines that there would be fewer than 1,000,000 Series S Shares outstanding after September 30, 2016, no Series R Shares will be permitted to be converted into Series S Shares. There are currently 10,000,000 Series R Shares outstanding.

The Toronto Stock Exchange (“TSX”) has conditionally approved the listing of the Series S Shares effective upon conversion. Listing of the Series S Shares is subject to Brookfield fulfilling all the listing requirements of the TSX and, upon approval, the Series S Shares will be listed on the TSX under the trading symbol “BPO.PR.S”.

BPO.PR.R is a 5.10%+348 FixedReset that commenced trading 2011-9-2 after being announced 2011-8-25. The reset therefore represents a 19% cut in dividends.

As noted, the deadline for notifying the company of a desire to convert is 5:00 p.m. (ET) on September 15, 2016, but note that custodians of your shares will have internal deadlines a day or two earlier. Hence, I will make a recommendation on whether or not to convert on September 12, 2016.

Sun Life Financial Inc. has announced:

the dividend rates for its Class A Non-Cumulative Rate Reset Preferred Shares Series 10R (the “Series 10R Shares”) and Class A Non-Cumulative Floating Rate Preferred Shares Series 11QR (the “Series 11QR Shares”).

With respect to any Series 10R Shares that remain outstanding after September 30, 2016, commencing as of that date, holders thereof will be entitled to receive non-cumulative preferential cash dividends on a quarterly basis, as and when declared by the Board of Directors of Sun Life Financial and subject to the Insurance Companies Act (Canada). The dividend rate for the five-year period commencing on September 30, 2016 to but excluding September 30, 2021 will be 2.842% per annum or $0.177625 per share per quarter, being equal to the sum of the Government of Canada Yield, as defined in the terms of the Series 10R Shares, on Wednesday, August 31, 2016 plus 2.17%, as determined in accordance with the terms of the Series 10R Shares.

With respect to any Series 11QR Shares that are issued on September 30, 2016, holders thereof will be entitled to receive floating rate non-cumulative preferential cash dividends on a quarterly basis, as and when declared by the Board of Directors of Sun Life Financial and subject to the Insurance Companies Act (Canada), based on a dividend rate equal to the sum of the T-Bill Rate, as defined in the terms of the Series 11QR Shares, plus 2.17% (calculated on the basis of the actual number of days elapsed in such Quarterly Floating Rate Period divided by 365 days), subject to certain adjustments in accordance with the terms of the Series 11QR Shares. The dividend rate for the period commencing on September 30, 2016 to but excluding December 31, 2016 will be equal to 2.682% per annum or $0.169003 per share, as determined in accordance with the terms of the Series 11QR Shares.

Beneficial owners of Series 10R Shares who wish to exercise the right of conversion should communicate as soon as possible with their broker or other nominee and should ensure that their instructions are followed in order to meet the deadline to exercise such right of conversion, which is 5:00 p.m. (ET) on Thursday, September 15, 2016.

An application will be made to list the Series 11QR Shares on the Toronto Stock Exchange.

I previously reported the notice of extension.

SLF.PR.H is a FixedReset, 3.90%+217, that commenced trading 2011-8-12 after being announced 2011-8-4. The reset dividend therefore represents a dividend cut of 27%.

As the issue does not have a NVCC clause, I have followed my current policy and added a Deemed Maturity entry to the call schedule for 2025-1-31 in the expectation that the NVCC rules will be imposed on insurers and insurance holding companies in the reasonably near future.

As noted, the deadline for notifying the company of a desire to convert is 5:00 p.m. (ET) on September 15, 2016, but note that custodians of your shares will have internal deadlines a day or two earlier. Hence, I will make a recommendation on whether or not to convert on September 12, 2016.

Intact Financial Corporation has announced:

that it does not intend to exercise its right to redeem all or any part of the currently outstanding Non-cumulative Rate Reset Class A Shares Series 3 of IFC (the “Series 3 Preferred Shares”) (TSX: IFC.PR.C) on September 30, 2016. As a result, subject to certain conditions set out in the prospectus supplement dated August 11, 2011 relating to the issuance of the Series 3 Preferred Shares (the “Prospectus”), the holders thereof will have the right, at their option, to elect to convert all or any of their Series 3 Preferred Shares into Non-cumulative Floating Rate Class A Shares Series 4 of IFC (the “Series 4 Preferred Shares”) on a one-for-one basis on September 30, 2016. Holders who do not exercise their right to convert their Series 3 Preferred Shares into Series 4 Preferred Shares on such date will retain their Series 3 Preferred Shares, unless automatically converted in accordance with the conditions below.

With respect to any Series 3 Preferred Shares that remain outstanding after September 30, 2016, commencing as of such date, holders thereof will be entitled to receive fixed non-cumulative preferential cash dividends on a quarterly basis, as and when declared by the Board of Directors of IFC. The annual dividend rate for the Series 3 Preferred Shares for the five-year period from and including September 30, 2016 to but excluding September 30, 2021 will be 3.332%, as determined in accordance with the terms of the Series 3 Preferred Shares.

With respect to any Series 4 Preferred Shares that may be issued on September 30, 2016, holders thereof will be entitled to receive floating rate non-cumulative preferential cash dividends on a quarterly basis, as and when declared by the Board of Directors of IFC. The dividend rate for the Series 4 Preferred Shares for the 3-month floating rate period from and including September 30, 2016 to but excluding December 31, 2016 will be 0.79733% (3.172% on an annualized basis), as determined in accordance with the terms of the Series 4 Preferred Shares (the “Floating Quarterly Dividend Rate”). The Floating Quarterly Dividend Rate will be reset every quarter.

The foregoing conversion right is subject to the conditions that: (i) if IFC determines that there would be less than 1,000,000 Series 3 Preferred Shares outstanding on September 30, 2016, then all remaining Series 3 Preferred Shares will automatically be converted into an equal number of Series 4 Preferred Shares on September 30, 2016, and (ii) alternatively, if IFC determines that there would be less than 1,000,000 Series 4 Preferred Shares outstanding on September 30, 2016, then no Series 3 Preferred Shares will be converted into Series 4 Preferred Shares. In either case, IFC will give written notice to that effect to any registered holders of Series 3 Preferred Shares on or before September 23, 2016.

The Series 3 Preferred Shares are issued in “book entry only” form and must be purchased or transferred through a participant in the CDS depository service (“CDS Participant”). All rights of holders of Series 3 Preferred Shares must be exercised through CDS or the CDS Participant through which the Series 3 Preferred Shares are held. The deadline for the registered shareholder to provide notice of exercise of the right to convert Series 3 Preferred Shares into Series 4 Preferred Shares is 5:00 p.m. (ET) on September 15, 2016. Any notices received after this deadline will not be valid. As such, holders of Series 3 Preferred Shares who wish to exercise their right to convert their shares should contact their broker or other intermediary for more information and it is recommended that this be done well in advance of the deadline in order to provide the broker or other intermediary with time to complete the necessary steps.

Holders of the Series 3 Preferred Shares and the Series 4 Preferred Shares will have the opportunity to convert their shares again on September 30, 2021, and every five years thereafter as long as the shares remain outstanding. Subject to certain conditions described in the Prospectus, IFC may redeem the Series 3 Preferred Shares, in whole or in part, on September 30, 2021 and on September 30 every five years thereafter and may redeem the Series 4 Preferred Shares, in whole or in part, after September 30, 2016.

The Toronto Stock Exchange (“TSX”) has conditionally approved the listing of the Series 4 Preferred Shares effective on conversion. Listing of the Series 4 Preferred Shares is subject to IFC fulfilling all of the listing requirements of the TSX.

For more information on the terms of, and risks associated with an investment in, the Series 3 Preferred Shares and the Series 4 Preferred Shares, please see IFC’s prospectus supplement dated August 11, 2011 which is available on www.sedar.com.

IFC.PR.C is a FixedReset, 4.20%+266, that commenced trading 2011-8-18 after being announced 2011-8-9. Hence the reset represents a dividend cut of 21%.

As the issue does not have a NVCC clause, I have followed my current policy and added a Deemed Maturity entry to the call schedule for 2025-1-31 in the expectation that the NVCC rules will be imposed on insurers and insurance holding companies in the reasonably near future.

As noted, the deadline for notifying the company of a desire to convert is 5:00 p.m. (ET) on September 15, 2016, but note that custodians of your shares will have internal deadlines a day or two earlier. Hence, I will make a recommendation on whether or not to convert on September 12, 2016.