PrefBlog

Quadravest has announced (on February 21):

North American Financial 15 Split Corp. (the “Company”) is pleased to announce it will extend the termination date of the Company a further five year period from December 1, 2019 to December 1, 2024.

The term extension allows holders of FFN Class A Shares (“Class A Shares”) to continue to receive ongoing leveraged exposure to a portfolio consisting of high-quality financial services companies made up of Canadian and U.S. issuers, as well as receiving targeted monthly distributions. Since inception of the Company Class A shareholders have received monthly distributions totaling $12.65 per share.

Holders of the FFN.PR.A Preferred Shares (“Preferred Shares”) are expected to continue to benefit from cumulative preferential monthly distributions. The Preferred shareholders have received a total of $7.53 per share since inception.

The extension of the term of the Company is not expected to be a taxable event and should enable shareholders to defer potential capital gains tax liability that would have otherwise been realized on the redemption of the Class A Shares or Preferred Shares at the end of the term, until such time as such shares are disposed of by shareholders.

In connection with the extension, the Company will have the right to amend the minimum rate of cumulative preferential monthly dividends to be paid to the Preferred Shares for the five year renewal period, commencing December 1, 2019. Any change to the Preferred Share minimum dividend rate for the extended term will be based on market yields for preferred shares with similar terms at such time and will be announced no later than September 30, 2019. The Company has the right to establish the rate of cumulative preferential monthly dividends to be paid to the Preferred Shares on an annual basis.

The Company invests in a high quality portfolio consisting of 15 financial services companies made up of Canadian and U.S. issuers as follows: Bank of Montreal, The Bank of Nova Scotia, Canadian Imperial Bank of Commerce, Royal Bank of Canada, Toronto-Dominion Bank, National Bank of Canada, Manulife Financial Corporation, Sun Life Financial, Great-West Lifeco, CI Financial Corp, Bank of America, Citigroup Inc., Goldman Sachs Group, JP Morgan Chase & Co. and Wells Fargo & Co.

It is worth noting that the dividend rate on FFN.PR.A remains unchanged at 5.50%, where it was reset in 2017. Quadravest does not announce rates originally set explicitly for a single fiscal year if they do not change in the following fiscal year.

Algonquin Power & Utilities Corp. has announced:

that it does not intend to exercise its right to redeem all or part of the currently outstanding 4,000,000 Cumulative Rate Reset Preferred Shares, Series D (the “Series D Preferred Shares”) on April 1, 2019. As a result, subject to certain conditions, the holders of the Series D Preferred Shares have the right to convert all or part of their Series D Preferred Shares, on a one-for-one basis, into Cumulative Floating Rate Preferred Shares, Series E (the “Series E Preferred Shares”) on April 1, 2019 (the “Conversion Date”) in accordance with the terms and conditions of the Series D Preferred Shares described in the prospectus supplement of the Company dated February 25, 2014 to a short form base shelf prospectus of the Company dated February 18, 2014.

Holders of Series D Preferred Shares who do not exercise their right to convert their Series D Preferred Shares into Series E Preferred Shares on the Conversion Date will retain their Series D Preferred Shares.

The dividend rate applicable to the Series D Preferred Shares for the 5-year period from and including March 31, 2019 to but excluding March 31, 2024, and the dividend rate applicable to the Series E Preferred Shares for the 3-month period from and including March 31, 2019 to but excluding June 30, 2019, will be determined and announced by the Company by way of a news release on March 1, 2019.

Beneficial owners of Series D Preferred Shares who wish to exercise their conversion right during the conversion period, which runs from March 1, 2019 until March 15, 2019 at 5:00 p.m. (EST), should communicate as soon as possible with their broker or other nominee for more information. It is recommended that this be done well in advance of the deadline in order to provide the broker or other nominee time to complete the necessary steps. Any notices received after this deadline will not be valid.

The foregoing conversion rights are subject to the following conditions:
i. if APUC determines that there would remain outstanding on the Conversion Date fewer than 1,000,000 Series E Preferred Shares, after having taken into account all Series D Preferred Shares tendered for conversion into Series E Preferred Shares, then holders of Series D Preferred Shares will not be entitled to convert their Series D Preferred Shares into Series E Preferred Shares, and

ii.alternatively, if APUC determines that there would remain outstanding on the Conversion Date fewer than 1,000,000 Series D Preferred Shares, after having taken into account all Series D Preferred Shares tendered for conversion into Series E Preferred Shares, then all remaining Series D Preferred Shares will automatically be converted into Series E Preferred Shares without the consent of the holders of Series D Preferred Shares, on a one-for-one basis, on the Conversion Date.

In either case, APUC will give written notice to that effect to the registered holder of Series D Preferred Shares no later than March 22, 2019.

AQN.PR.D is a FixedReset, 5.00%+328, that commenced trading 2014-3-5 after being announced February 24. It is tracked by HIMIPref™ but relegated to the Scraps-FixedReset(Discount) subindex on credit concerns.

I will have further commentary when the reset rate is announced on March 1.

Fortis, Inc. has quietly announced:

that only 101,586 Cumulative Redeemable Fixed Rate Reset First Preference Shares, Series K of the Corporation (the “Series K Shares”) were tendered for conversion into Cumulative Redeemable Floating Rate First Preference Shares, Series L of the Corporation (the “Series L Shares”) on or prior to the February 14, 2019 conversion deadline.

Pursuant to the terms of the Series K Shares, as described in the prospectus supplement of the Corporation dated July 9, 2013 to the base shelf prospectus of the Corporation dated May 10, 2012 relating to the issuance of the Series K Shares, holders of Series K Shares are not entitled to convert their Series K Shares into Series L Shares unless at least 1,000,000 Series K Shares are tendered for conversion during the conversion period. As a result of the failure of holders to tender at least 1,000,000 Series K Shares for conversion at this time, no Series K Shares will be converted into Series L Shares on March 1, 2019.

Holders of Series K Shares who exercised their right to convert their Series K Shares into Series L Shares will continue to hold Series K Shares on and after March 1, 2019 and any Series K Shares tendered for conversion will be returned to the holders thereof. As previously announced by the Corporation, the fixed dividend rate on the Series K Shares will be $0.2453125 per Series K Share, payable quarterly on the first day of March, June, September and December of each year during the five-year period from and including March 1, 2019 to but excluding March 1, 2024.
Investor enquiries should be directed to Ms. Karen Gosse, Vice President, Treasury and Planning, Fortis at 709.737.2865.

This was not a press release, although press releases are issued by almost all other companies making similar announcements. This announcement was quietly added to the preferred share section of their share information page – I don’t know when – it might even have been today, since my first inquiry was sent Thursday 21st and was only answered Tuesday 26th.

FTS.PR.K is a FixedReset, 4.00%+205, that commenced trading 2013-7-13 after being announced 2013-7-9. It resets to 3.925% effective 2019-3-1, although the company would prefer you didn’t know that. I recommended against conversion. The issue is tracked by HIMIPref™ but relegated to the Scraps – FixedResets (Discount) subindex on credit concerns.

My eMail of inquiry – sent on three successive days – also included the question:

The 3.925% rate for FTS.PR.K implies that the five-year Canada rate, as defined in the prospectus, was 1.875%, whereas your competitors’ calculations implied that this rate was 1.879%. For greater certainty, please confirm the exact date and time for which you obtained the relevant rate from Bloomberg.

Fortis Investor Relations tells me they’ll be getting back to me.

Aimia Inc. has announced:

the reduction of its stated capital account, the payment of dividends on its common and preferred shares, and provided an update on the conversion privilege of Series 3 preferred shares.

Further to the approval of a reduction in stated capital by common shareholders at the meeting of shareholders held on January 8, 2019, and having taken into account the completion of the sale of Aimia Canada Inc. and the receipt of the sale proceeds and the subsequent reduction in liabilities and financial indebtedness of the company, Aimia’s Board of Directors has now determined that it is in the best interests of the company to approve the following matters:
•a reduction of the stated capital account maintained in respect of the common shares to an aggregate of $1,000,000;
•the payment on March 29, 2019 of the quarterly dividends originally declared on May 10, 2017, being dividends of $0.20 per common share, $0.28125 per Cumulative Rate Reset Preferred Shares, Series 1 (the “Series 1 Preferred Shares”), $0.263651 per Cumulative Floating Rate Preferred Shares, Series 2 (the “Series 2 Preferred Shares”) and $0.390625 per Cumulative Rate Reset Preferred Shares, Series 3 (the “Series 3 Preferred Shares) (collectively, the “Declared Dividends”) to holders of record at the close of business on June 16, 2017;
•the payment on March 29, 2019 of dividends on each of the Series 1 Preferred Shares, the Series 2 Preferred Shares and the Series 3 Preferred Shares accrued and unpaid since July 1, 2017 (representing accrued dividends on such preferred shares for six quarters), being dividends of $1.68750 per Series 1 Preferred Share, $1.79388 per Series 2 Preferred Share and $2.343750 per Series 3 Preferred Share (collectively, the “Accrued and Unpaid Preferred Share Dividends”) to holders of record at the close of business on March 19, 2019; and
•the payment on March 29, 2019 of the first quarterly dividends in 2019 in the amount of $0.28125 per Series 1 Preferred Share, $0.336760 per Series 2 Preferred Share and $0.390625 per Series 3 Preferred Share, in each case payable to holders of record at the close of business on March 19, 2019.

The payments for the Declared Dividends amount to an aggregate of $34.7 million and for the Accrued and Unpaid Preferred Share Dividends together with the first 2019 quarterly dividend on all series of preferred shares amount to an aggregate of $30.5 million.

In reaching its decision, the Board considered the company’s ability to satisfy the applicable tests under the Canada Business Corporations Act and the company’s obligation to pay the unpaid dividends with a view to remaining in good standing with the applicable rules and policies of the Toronto Stock Exchange (the “TSX”) and maintaining its listing on TSX.

The above-mentioned dividends on the common and preferred shares are designated as eligible dividends for the purposes of the Income Tax Act (Canada) and any similar applicable provincial legislation.

In addition, the company announced today that it does not intend to exercise its right to redeem all or any number of the currently outstanding 6,000,000 Series 3 Preferred Shares on March 31, 2019. As a result of the decision not to redeem all or any number of the Series 3 Preferred Shares and subject to certain conditions set out in the rights, privileges, restrictions and conditions attaching to such shares, the holders of the Series 3 Preferred Shares have the right to convert all or any number of their Series 3 Preferred Shares, on a one-for-one basis, into Cumulative Floating Rate Preferred Shares, Series 4 (the “Series 4 Preferred Shares”) of Aimia on April 1, 2019 (March 31, 2019 falling on a Sunday, a non-business day). Holders who do not exercise their right to convert their Series 3 Preferred Shares into Series 4 Preferred Shares on such date will continue to hold their Series 3 Preferred Shares.

The conversion right is subject to the conditions that: (i) if Aimia determines that there would be less than 1,000,000 Series 4 Preferred Shares outstanding after the conversion date, then holders of Series 3 Preferred Shares will not be entitled to convert their shares into Series 4 Preferred Shares and, alternatively; (ii) if Aimia determines that, after the conversion date, there would remain less than 1,000,000 Series 3 Preferred Shares outstanding, then all remaining Series 3 Preferred Shares will be automatically converted into Series 4 Preferred Shares on a one-for-one basis on the conversion date. In either case, Aimia will give written notice to that effect to registered holders of Series 3 Preferred Shares no later than March 22, 2019.

The dividend rate applicable to the Series 3 Preferred Shares for the 5-year period from and including March 31, 2019 up to but excluding March 31, 2024, and the dividend rate applicable to the Series 4 Preferred Shares for the 3-month period from and including March 31, 2019 up to but excluding June 30, 2019 will be announced by way of a press release on March 1, 2019.

To the extent any Series 3 Preferred Shares convert into Series 4 Preferred Shares on April 1, 2019, holders of Series 3 Preferred Shares as of the close of business on March 19, 2019 will be able to receive all dividends payable on such shares on March 29, 2019 prior to the conversion date.

Beneficial owners of Series 3 Preferred Shares who wish to exercise their conversion right should communicate as soon as possible with their broker or other nominee to obtain instructions for exercising such right on or prior to the deadline for exercise, which is 5:00 p.m. (Montreal time) on March 18, 2019.

Inquiries regarding conversion of the Series 3 Preferred Shares should be directed to Aimia’s Registrar and Transfer Agent, AST Trust Company (Canada), at 1-800-387-0825 (toll free in Canada and the United States).

They further announced:

Aimia Inc.(TSX: AIM) will issue its fourth quarter 2018 financial results at 6:00 a.m. EDT on the morning of Thursday, March 28, 2019, and hold its quarterly conference call and webcast at 8:30 a.m. EDT on the same day.

I certainly hope they produce a pro-forma balance sheet reflecting the closing of the Aeroplan transaction and the reduction in stated capital! There are so many balls in the air with this company that getting a good idea of where they stand is no minor task – and it doesn’t help that nobody really knows what business they’re in nowadays:

AIMIA POST-TRANSACTION

The Board of Directors has formally commenced a process to review and evaluate the future strategic direction of Aimia assuming and following completion of the Proposed Transaction. As part of that process, the Board of Directors has asked Management to present it with alternative visions and plans regarding the Corporation’s mid- and long-term strategic future and direction, including as a leading player in loyalty management. The Board of Directors has, in its review process, formed a committee comprised of independent directors for the purpose of receiving and considering any such Management recommendation(s). The independent committee is currently actively engaged in these matters, and the Corporation will publicly disclose the results of its review process setting out the vision and direction of the Corporation once it has formally made decisions or determinations with respect to the foregoing.

Aimia suspended preferred share dividends in June, 2017. DBRS doungraded the preferreds to Pfd-5(high) in August, 2017, and currently has them under review with developing implications. S&P declared that it considered the preferred shares to be in default in June, 2018.

Affected issues are AIM.PR.A, AIM.PR.B and AIM.PR.C. I will have more commentary regarding the conversion right for AIM.PR.C when the reset rate is announced on March 1.

Update, 2024-9-7: For the start of all this, see the post Aimia Suspends Preferred Dividends.

Quadravest has announced:

Dividend 15 Split Corp. (the “Company”) is pleased to announce it will extend the termination date of the Company a further five year period from December 1, 2019 to December 1, 2024.

The term extension allows holders of DFN Class A Shares (“Class A Shares”) to continue to receive ongoing leveraged exposure to a portfolio consisting of high-quality Canadian dividend yielding stocks as well as receiving targeted monthly distributions. Since inception of the Company Class A shareholders have received 178 consecutive monthly distributions totaling $21.30 per share (including five special distributions of $0.25 per share, one special distribution of $0.50 per share and one special stock dividend of $1.75 per share).

Holders of the DFN.PR.A Preferred Shares (“Preferred Shares”) are expected to continue to benefit from cumulative preferential monthly distributions. The Preferred shareholders have received a total of $7.81 per share since inception.

The extension of the term of the Company is not expected to be a taxable event and should enable shareholders to defer potential capital gains tax liability that would have otherwise been realized on the redemption of the Class A Shares or Preferred Shares at the end of the term, until such time as such shares are disposed of by shareholders.

In connection with the extension, the Company will have the right to amend the rate of cumulative preferential monthly dividends to be paid to the Preferred Shares for the five year renewal period, commencing December 1, 2019. Any change to the Preferred Share dividend rate for the extended term will be based on market yields for preferred shares with similar terms at such time and will be announced no later than September 30, 2019.

The Company invests in a high quality portfolio of leading Canadian dividend-yielding stocks as follows: Bank of Montreal, Bank of Nova Scotia, Canadian Imperial Bank of Commerce, Royal Bank of Canada, Toronto-Dominion Bank, National Bank of Canada, CI Financial Corp., BCE Inc., Manulife Financial, Enbridge, Sun Life Financial, TELUS Corporation, Thomson Reuters Corporation, TransAlta Corporation, TransCanada Corporation.

DFN.PR.A was first traded 2004-3-16 as a 5.25% Split Share scheduled to mature 2009-12-1. A Special Resolution was proposed in April 2007 to extend term to 2014-12-1 with an unchanged dividend. The proposal was approved and shareholders had a wild ride during the Credit Crunch. There was another term extension approved in June 2013 with the dividend remaining unchanged. The fund then swallowed up CGQ & CGQ.E as well as STQ / STQ.E.

Quadravest has announced:

Dividend 15 Split Corp. II (the “Company”) is pleased to announce it will extend the termination date of the Company a further five year period from December 1, 2019 to December 1, 2024.

The term extension allows holders of DF Class A Shares (“Class A Shares”) to continue to receive ongoing leveraged exposure to a portfolio consisting of high-quality Canadian dividend yielding stocks as well as receiving targeted monthly distributions. Since inception of the Company Class A shareholders have received monthly distributions totaling $12.50 per share.

Holders of the DF.PR.A Preferred Shares (“Preferred Shares”) are expected to continue to benefit from cumulative preferential monthly distributions. The Preferred shareholders have received a total of $6.41 per share since inception.

The extension of the term of the Company is not expected to be a taxable event and should enable shareholders to defer potential capital gains tax liability that would have otherwise been realized on the redemption of the Class A Shares or Preferred Shares at the end of the term, until such time as such shares are disposed of by shareholders.

In connection with the extension, the Company will have the right to amend the rate of cumulative preferential monthly dividends to be paid to the Preferred Shares for the five year renewal period, commencing December 1, 2019. Any change to the Preferred Share dividend rate for the extended term will be based on market yields for preferred shares with similar terms at such time and will be announced no later than September 30, 2019.

The Company invests in a high quality portfolio of leading Canadian dividend-yielding stocks as follows: Bank of Montreal, Bank of Nova Scotia, Canadian Imperial Bank of Commerce, Royal Bank of Canada, Toronto-Dominion Bank, National Bank of Canada, CI Financial Corp., BCE Inc., Manulife Financial, Enbridge, Sun Life Financial, TELUS Corporation, Thomson Reuters Corporation, TransAlta Corporation, TransCanada Corporation.

DF.PR.A was added to the HIMIPref™ universe in May 2008, as a 5.25% Split Share maturing 2014-12-1. It was hammered in the Credit Crunch, but survived and a five year term extension with unchanged dividend was proposed in May 2013 which was approved in June 2013.