PrefBlog

Pembina Pipeline Corporation has announced:

that it is considering an offering of hybrid subordinated debt securities under its short form base shelf prospectus dated December 30, 2020.

If a successful offering is priced and completed, the Company intends to use the net proceeds of the offering to redeem or repurchase its outstanding cumulative redeemable minimum rate reset Class A Preferred Shares, Series 11 (TSX: PPL.PR.K) and its cumulative redeemable minimum rate reset Class A Preferred Shares, Series 13 (TSX: PPL.PR.M), to repay other outstanding indebtedness, as well as for general corporate purposes. There is no certainty that Pembina will ultimately complete the offering being considered or as to the timing or terms on which such an offering might be completed.

Assiduous Readers will remember that on July 16 I speculated:

Are speculators hypothesizing that if the banks are successful in creating a new market for deeply subordinated 60-year notes, then the other issuers will join in with great enthusiasm, with a resurgent exchange-traded COPrS market?

There’s no indication in the press release that the contemplated notes will be exchange-traded, but the principle is the same!

This announcement has also been discussed in the comments to another thread. Hat tip to stusclues for bringing this to my attention!

Brookfield Renewable Partners L.P. has announced:

that it has determined the fixed distribution rate on its Class A Preferred Limited Partnership Units, Series 7 (“Series 7 Units”) (TSX: BEP.PR.G) for the five years commencing February 1, 2021 and ending January 31, 2026.

Series 7 Units and Series 8 Units

If declared, the fixed quarterly distributions on the Series 7 Units during the five years commencing February 1, 2021 will be paid at an annual rate of 5.50% ($0.343750 per unit per quarter).

Holders of Series 7 Units have the right, at their option, exercisable not later than 5:00 p.m. (Toronto time) on January 18, 2021, to reclassify all or part of their Series 7 Units, on a one-for-one basis, into Class A Preferred Limited Partnership Units, Series 8 (“Series 8 Units”), effective January 31, 2021.

The quarterly floating rate distributions on the Series 8 Units will be paid at an annual rate, calculated for each quarter, of 4.47% over the annual yield on three-month Government of Canada treasury bills. The actual quarterly distribution rate in respect of the February 1, 2021 to April 30, 2021 distribution period for the Series 8 Units will be 1.11799% (4.585% on an annualized basis) and the distribution, if declared, for such distribution period will be $0.279498 per unit, payable on April 30, 2021.

Holders of Series 7 Units are not required to elect to reclassify all or any part of their Series 7 Units into Series 8 Units.

As provided in the unit conditions of the Series 7 Units, (i) if Brookfield Renewable determines that there would be fewer than 1,000,000 Series 7 Units outstanding after January 31, 2021, all remaining Series 7 Units will be automatically reclassified into Series 8 Units on a one-for-one basis effective January 31, 2021; or (ii) if Brookfield Renewable determines that there would be fewer than 1,000,000 Series 8 Units outstanding after January 31, 2021, no Series 7 Units will be reclassified into Series 8 Units. There are currently 7,000,000 Series 7 Units outstanding.

The Toronto Stock Exchange (“TSX”) has conditionally approved the listing of the Series 8 Units effective upon reclassification. Listing of the Series 8 Units is subject to Brookfield Renewable fulfilling all the listing requirements of the TSX and, upon approval, the Series 8 Units will be listed on the TSX under the trading symbol “BEP.PR.H”.

BEP.PR.G was issued as a Preferred Units FixedReset 5.50%+447M550, that commenced trading 2015-11-25 after being announced 2015-11-17. It must be remembered that the taxation status of the distributions is complex and – what’s more – can vary wildly from year to year.

Power Financial Corporation has announced (on January 4):

the applicable dividend rates for its Non-Cumulative 5-Year Rate Reset First Preferred Shares, Series P (the “Series P shares”) and Non-Cumulative Floating Rate First Preferred Shares, Series Q (the “Series Q shares”).

With respect to any Series P shares that remain outstanding after February 1, 2021, holders thereof will be entitled to receive quarterly fixed non-cumulative preferential cash dividends, if, as and when declared by the Board of Directors of Power Financial. The dividend rate for the 5-year period from and including January 31, 2021 to but excluding January 31, 2026 will be 1.998%, being equal to the 5-year Government of Canada bond yield determined as of today plus 1.60%, in accordance with the terms of the Series P shares.

With respect to any Series Q shares that remain outstanding after February 1, 2021, holders thereof will be entitled to receive quarterly floating rate non-cumulative preferential cash dividends, if, as and when declared by the Board of Directors of Power Financial. The dividend rate for the 3-month floating rate period from and including January 31, 2021 to but excluding April 30, 2021 will be 1.715%, being equal to the 3-month Government of Canada Treasury Bill yield determined as of today plus 1.60%, calculated on the basis of the actual number of days in such quarterly period divided by 365, in accordance with the terms of the Series Q shares.

Beneficial owners of Series P shares or Series Q shares who wish to exercise their conversion right should communicate with their broker or other nominee to ensure their instructions are followed so that the registered holders of Series P shares or Series Q shares can meet the deadline to exercise such conversion right, which is 5:00 p.m. (Eastern Time) on January 18, 2021.

PWF.PR.P was issued as a a FixedReset, 4.40%+160 that commenced trading 2010-6-29 after being announced 2010-6-17. It reset to 2.306% in 2016; I recommended against conversion but there was a 20% conversion to PWF.PR.Q anyway.

PWF.PR.Q is a FloatingReset, Bills+160, that arose via a partial conversion from PWF.PR.P in 2016.

Well, it didn’t take long for Quadravest to take advantage of the post-consolidation price of FTN.PR.A. A new overnight deal is being marketted:

Financial 15 Split Corp. (the “Company”) is pleased to announce it will undertake an offering of Preferred Shares and Class A Shares of the Company. The offering will be co-led by National Bank Financial Inc., CIBC World Markets Inc., Scotia Capital Inc. and RBC Capital Markets, and will also include BMO Capital Markets, Canaccord Genuity Corp., Industrial Alliance Securities Inc., Richardson Wealth Limited, Raymond James Ltd., Desjardins Securities Inc., Hampton Securities, Mackie Research Capital Corporation, and Manulife Securities Incorporated.

The Preferred Shares will be offered at a price of $10.15 per Preferred Share to yield 6.7% and the Class A Shares will be offered at a price of $9.80 per Class A Share to yield 15.4%.

The closing price on the TSX of each of the Preferred Shares and the Class A Shares on January 5, 2021 was $10.45 and $9.66, respectively.

Since inception of the Company, the aggregate dividends declared on the Preferred Shares have been $9.08 per share and the aggregate dividends declared on the Class A Shares have been $20.53 per share, for a combined total of $29.61. All distributions to date have been made in tax advantage eligible Canadian dividends or capital gains dividends.

The net proceeds of the offering will be used by the Company to invest in an actively managed, high quality portfolio consisting of 15 financial services companies made up of Canadian and U.S. issuers as follows:

Bank of Montreal	National Bank of Canada	Bank of America Corp.
The Bank of Nova Scotia	Manulife Financial Corporation	Citigroup Inc.
Canadian Imperial Bank of Commerce	Sun Life Financial Services of Canada Inc.	Goldman Sachs Group Inc.
Royal Bank of Canada	Great-West Lifeco Inc.	JP Morgan Chase & Co.
The Toronto-Dominion Bank	CI Financial Corp.	Wells Fargo & Co.

The Company’s investment objectives are:

Preferred Shares:

• to provide holders of the Preferred Shares with fixed, cumulative preferential monthly cash dividends currently in the amount of 6.75% annually, to be set by the Board of Directors annually subject to a minimum of 5.50% until 2025; and
• on or about the termination date, currently December 1, 2025 (subject to further 5-year extensions thereafter), to pay the holders of the Preferred Shares $10.00 per Preferred Share.

Class A Shares:

• to provide holders of the Class A Shares with regular monthly cash dividends in an amount to be determined by the Board of the Directors; and
• to permit holders to participate in all growth in the net asset value of the Company above $10 per Unit, by paying holders on or about the termination date of December 1, 2025 (subject to further 5-year extensions thereafter) such amounts as remain in the Company after paying $10 per Preferred Share.

The sales period of this overnight offering will end at 9:00 a.m. EST on January 7, 2021. The offering is expected to close on or about January 14, 2021 and is subject to certain closing conditions including approval by the TSX.

So the Whole Units are being offered at 19.95, while the December 31, 2020, NAVPU was 18.60, a premium of 7.26%. What a great business this is!

Cenovus Energy Inc. has announced (on January 4):

that its strategic combination with Husky Energy Inc. has closed. The transaction creates a resilient integrated energy leader that is well positioned to provide superior returns for investors over the long term, as well as strong environmental, social and governance (ESG) performance.
…
Husky preferred shareholders exchanged each Husky preferred share for one Cenovus preferred share with substantially identical terms.
…
The Cenovus preferred shares Series 1, Series 2, Series 3, Series 5 and Series 7 have been listed on the TSX under the ticker symbols CVE.PR.A, CVE.PR.B, CVE.PR.C, CVE.PR.E and CVE.PR.G. The Cenovus warrants and Cenovus preferred shares are expected to commence trading on the TSX at the opening of market on January 6, 2021
…
With the close of the transaction, Husky has become a wholly owned subsidiary of Cenovus and will remain as such until completion of a planned amalgamation among the two entities. Upon amalgamation, Cenovus will become the obligor under Husky’s existing long-term notes and other direct obligations.

So the table of changes is pretty simple: