PrefBlog

DBRS has announced that it:

confirmed the Cumulative Preferred Shares rating of Canaccord Genuity Group Inc.’s (CG or the Company) at Pfd-4 (high) and changed the trend to Stable from Negative. The Company has a Support Assessment of SA3, which implies no expected systemic support.

KEY RATING CONSIDERATIONS
The trend change to Stable reflects DBRS Morningstar’s view that the considerable uncertainties facing financial institutions, particularly those with more limited business models, caused by the Coronavirus Disease (COVID-19) pandemic have begun to abate. CG is a Canadian-based financial institution with $6.1 billion in assets as of Q3 2021, operating in the U.S., the United Kingdom (UK), and Australia, with a focus on capital markets activities and wealth management. The Company reported 9M 2021 revenue of $1.3 billion, up 44% from 9M 2020 earnings of $119 million, double the earnings of the previous year. CG benefited from the businesses it had acquired in 2019, the year prior to the pandemic, namely its U.S. capital markets business as well as its Australian wealth management operations.

In confirming the rating, DBRS Morningstar recognizes CG’s solid niche franchise, with a growing wealth management presence across various geographies, while remaining cognizant of the Company’s increased leverage following its recent wealth management and other acquisitions. The Company has made acquisitions in Canada, the U.S., the UK, and Australia, and although it has now integrated these businesses it will need to continue to leverage the larger platform to further enhance efficiencies. The Company expects the combined businesses’ success and efficiencies should drive profits and enable it to reduce leverage over time. However, DBRS Morningstar remains cognizant that the continued impact of the coronavirus-related downturns could, over the short term, create earnings volatility and impede the Company’s ability to comfortably meet contractual payments.

RATING DRIVERS
Although DBRS Morningstar considers CG as being well placed in its current rating category, over the longer term, further franchise diversification that contributes to sustained and improving earnings across segments while lowering leverage would result in an upgrade. Conversely, weakened credit fundamentals or inconsistent earnings would result in a rating downgrade. Furthermore, given CG’s high reliance on market confidence to support its franchise, any significant operational or reputational issues would likely negatively affect the rating, as would material negative stresses to the Company’s liquidity or funding profiles.

Affected issues are CF.PR.A and CF.PR.C.

The Bank of Nova Scotia has announced:

its intention to redeem all outstanding Non-cumulative 5-Year Rate Reset Preferred Shares Series 34 (Non-Viability Contingent Capital (NVCC)) (“Series 34 Shares”) of Scotiabank on April 26, 2021 at a price equal to $25.00 per share together with declared and unpaid dividends to the Redemption Date (the “Redemption Price”). Formal notice will be issued to the shareholders in accordance with the share conditions.

The redemption has been approved by the Office of the Superintendent of Financial Institutions and will be financed out of the general funds of Scotiabank. This redemption is part of the Bank’s ongoing management of its Tier 1 capital.

On February 23, 2021, the Board of Directors of Scotiabank declared quarterly dividends of $0.343750 per Series 34 Share. This will be the final dividend on the Series 34 Shares and will be paid on April 26, 2021, to shareholders of record at the close of business on April 6, 2021, as previously announced. Subsequent to this final dividend payment, the Series 34 Shares will cease to be entitled to dividends.

BNS.PR.E is a FixedReset 5.50%+451, NVCC-compliant issue that commenced trading 2015-12-17 after being announced 2015-12-8.

Thanks to Assiduous Reader CanSiamCyp for ensuring I didn’t miss this.

TC Energy Corporation has announced:

that TransCanada Trust (the Trust), a wholly-owned financing trust subsidiary of TransCanada PipeLines Limited (TCPL), has closed an offering of $500 million of 4.20% subordinated Trust Notes, Series 2021-A due March 4, 2081 (Trust Notes), guaranteed on a subordinated basis by TCPL. The Trust Notes were offered through a syndicate of underwriters, co-led by BMO Capital Markets and Scotiabank, under the Trust’s short form base shelf prospectus dated February 26, 2021, as supplemented by a prospectus supplement dated March 1, 2021.

The Company intends to use the proceeds to redeem its issued and outstanding Cumulative Redeemable Minimum Rate Reset First Preferred Shares, Series 13 (TSX:TRP.PR.J) pursuant to their terms, and pending such redemption, to reduce short-term indebtedness as well as for general corporate purposes.

Well, 60-year subordinated debt at 4.20% interest sure beats the 5.50% dividend minimum payable on TRP.PR.J!

TRP.PR.J is a FixedReset, 5.50%+469M550, that commenced trading 2016-4-20 after being announced 2016-4-13.

Thanks to Assiduous Reader CanSiamCyp for ensuring I didn’t miss this.

TransAlta Corporation has announced:

that it does not intend to exercise its right to redeem all or any portion of the currently outstanding Cumulative Redeemable Rate Reset First Preferred Shares, Series A (“Series A Shares”) (TSX: TA.PR.D) and the Cumulative Redeemable Floating Rate First Preferred Shares, Series B (“Series B Shares”) (TSX: TA.PR.E) on March 31, 2021 (the “Conversion Date”).

As a result, and subject to certain conditions, the holders of the Series A Shares will have the right to elect to: (a) retain any or all of their Series A Shares and continue to receive a fixed rate quarterly dividend; or (b) convert all or any of their Series A Shares into Series B Shares on the basis of one Series B Share for each Series A Share on the Conversion Date and receive a floating rate quarterly dividend.

Comparably, subject to certain conditions, the holders of the Series B Shares will have the right to elect to: (a) retain any or all of their Series B Shares and continue to receive a floating rate quarterly dividend; or (b) convert all or any of their Series B Shares into Series A Shares on the basis of one Series A Share for each Series B Share on the Conversion Date and receive a fixed rate quarterly dividend.

As provided in the share terms, the foregoing conversion right is subject to the conditions that: (i) if TransAlta determines that there would remain outstanding immediately following the conversion, less than 1,000,000 Series A Shares, holders of Series B Shares shall not be entitled to convert their shares into Series A Shares, and the remaining Series A Shares will automatically convert to Series B Shares, on the Conversion Date; or (ii) if TransAlta determines that there would remain outstanding immediately after the conversion, less than 1,000,000 Series B Shares, holders of Series A Shares shall not be entitled to convert their shares into Series B Shares, and the remaining Series B Shares will automatically convert to Series A Shares, on the Conversion Date. There are currently 10,175,380 Series A Shares outstanding and 1,824,620 Series B Shares.

Should a holder of Series A Shares choose to retain their shares, such shareholders will receive quarterly fixed dividend rate applicable to Series A Shares of 0.71925% (2.87700% on an annualized basis) for the five-year period from and including March 31, 2021 to but excluding March 31, 2026. Should a holder of Series A Shares choose to convert their shares to Series B Shares, the Series B Shares that may be issued on the Conversion Date will receive the floating quarterly dividend rate applicable to the Series B Shares of 0.52431% (2.10300% on an annualized basis) for the three-month period from and including March 31, 2021 to but excluding June 30, 2021. The floating dividend rate will be reset every quarter.

Should a holder of Series B Shares choose to retain their shares, such shareholders will receive the floating quarterly dividend rate applicable to Series B Shares of 0.52431% (2.10300% on an annualized basis) for the three-month period from and including March 31, 2021 to but excluding June 30, 2021. The floating dividend rate will be reset every quarter. Should a holder of Series B Shares choose to convert their shares to Series A Shares, holders of Series A Shares will receive the new fixed quarterly dividend rate applicable to the Series A Shares of 0.71925% (2.87700% on an annualized basis) for the five-year period from and including March 31, 2021 to but excluding March 31, 2026.

The Series A Shares and Series B 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 A Shares and Series B Shares must be exercised through CDS or the CDS Participant through which the shares are held. The deadline for the registered shareholder to provide notice of exercise of the right to convert Series A Shares into Series B Shares, or Series B Shares into Series A Shares, as applicable, is 3:00 p.m. (MST) / 5:00 p.m. (EST) on March 16, 2021. Any notices received after this deadline will not be valid. As such, holders of Series A Shares or Series B 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 as soon as possible and well in advance of the deadline in order to provide the broker or other intermediary with time to complete the necessary steps.

If TransAlta does not receive an election notice from a holder of Series A Shares or Series B Shares during the time fixed therefor, then such shares shall be deemed not to have been converted (except in the case of an automatic conversion described above). Holders of the Series A Shares and the Series B Shares will have the opportunity to convert their shares again on March 31, 2026, and every five years thereafter as long as the shares remain outstanding. For more information on the terms of the Series A Shares and the Series B Shares, please see TransAlta’s articles of amalgamation, including the share terms and shares in series schedule attached thereto as Schedule “A”, which are available on the Company’s website under Governance.

TA.PR.D was issued as a FixedReset, 4.60%+203, that commenced trading 2010-12-10 after being announced 2010-12-2. In 2016, it reset to 2.709%. I recommended against conversion, but there was a 15% conversion to the FloatingReset, TA.PR.E, anyway.

TA.PR.E is a FloatingReset, Bills+203, that arose via a partial conversion from the FixedReset, TA.PR.D.

First National Financial Corporation has announced:

the applicable dividend rates for its cumulative 5-year rate reset Class A Preference Shares, Series 1 (“Series 1 Preference Shares”) and cumulative floating rate Class A Preference Shares, Series 2 (“Series 2 Preference Shares”).

With respect to any Series 1 Preference Shares that remain outstanding on March 31, 2021, commencing as of such date, holders thereof will be entitled to receive cumulative preferential cash dividends on a quarterly basis, as and when declared by the Board of Directors of First National. The annual dividend rate for the five-year period commencing on April 1, 2021, and ending on March 31, 2026 will be 2.895%, being equal to the 5-Year Government of Canada bond yield determined as at 10 am (Toronto time) March 2, 2021 plus 2.07%, as determined in accordance with the terms of the Series 1 Preference Shares.

With respect to any Series 2 Preference Shares that remain outstanding on March 31, 2021, holders thereof will be entitled to receive floating rate cumulative preferential cash dividends on a quarterly basis, as and when declared by the Board of Directors of First National, based on a dividend rate equal to the 90-day Canadian Treasury Bill plus 2.07% on an actual/365 day count basis, subject to certain adjustments in accordance with the terms of the Series 2 Preference Shares. The dividend rate for the period commencing on April 1, 2021 and ending on June 30, 2021 will be equal to 2.192%, as determined in accordance with the terms of the Series 2 Preference Shares.

Beneficial owners of Series 1 Preference Shares or Series 2 Preference Shares who wish to exercise their right of conversion should communicate as soon as possible with their broker or other nominee and ensure that they follow their instructions in order to ensure that they meet the deadline to exercise such right, which is 5:00 p.m. (Toronto time) on March 16, 2021.

FN.PR.A is a FixedReset, 4.65%+207, that commenced trading 2011-1-25 after being announced 2011-1-17. Notice of extension was given in February, 2016 and the issue reset to 2.79%. I recommended against conversion, but there was 28% conversion to the FloatingReset, FN.PR.B. Notice of the second extension was given in February, 2021.

FN.PR.B is a FloatingReset, Bills+207, that arose via a partial conversion from the FixedReset, FN.PR.A, in 2016.

BCE Inc. has announced:

NOTICE IS HEREBY GIVEN THAT:

1. Holders of fixed-rate BCE Inc. Series AM Preferred Shares have the right to convert all or part of their shares,
effective on March 31, 2021, on a one-for-one basis, into floating-rate Cumulative Redeemable First Preferred
Shares, Series AN of BCE Inc. (the “Series AN Preferred Shares”). In order to convert their shares, holders must
exercise their right of conversion during the conversion period, which runs from March 1, 2021 until 5:00 p.m.
(Montréal/Toronto time) on March 16, 2021.

2. Holders not wishing to convert or who do not comply with the instructions set out in paragraph 3 below by
the appropriate deadline will, subject to paragraph 6 below, retain their Series AM Preferred Shares and,
accordingly, will continue to receive a fixed quarterly dividend as described in paragraph 4 below. However,
but subject to paragraph 6 below, on March 31, 2026, and every five years thereafter, holders of both Series
AM Preferred Shares and Series AN Preferred Shares will have the right to convert their shares into shares of
the other series.

3. In order to exercise its conversion right in respect of all or part of its Series AM Preferred Shares, the
registered holder must provide a written notice thereof, accompanied by its Series AM Preferred Share
certificates with the transfer form on the back thereof or other appropriate stock transfer power of attorney
duly endorsed, and deliver them, at the latest by 5:00 p.m. (Montréal/Toronto time) on March 16, 2021, to one
of the following addresses of AST Trust Company (Canada):

By Mail:
P.O. Box 1036
Adelaide Street Postal Station
Toronto, (Ontario) M5C 2K4
CANADA

By Personal Delivery, Courier or Registered Mail:
Attention: Corporate Actions
1 Toronto Street, Suite 1200
Toronto (Ontario) M5C 2V6
CANADA
Attention: Corporate Actions

Delivery may be done in person, by courier, by registered mail or by mail. However, if share certificates are
delivered by courier, by registered mail or by mail, the registered shareholder must ensure that they are
sent sufficiently in advance so that they are received by AST Trust Company (Canada) by the abovementioned deadline.

Beneficial holders who wish to exercise their conversion right should communicate with their broker or other
nominee to obtain instructions for exercising such right during the conversion period.

4. As of March 31, 2021, the Series AM Preferred Shares will, should they remain outstanding, pay, on a quarterly
basis, as and when declared by the Board of Directors of BCE Inc., a fixed cash dividend for the following five
years that will be based on a fixed rate equal to the sum of: (a) the yield to maturity compounded semiannually (the “Government of Canada Yield”), computed on March 1, 2021 in accordance with the articles of
BCE Inc., of a Canadian dollar denominated non-callable Government of Canada bond with a term to
maturity of five years, and (b) 2.09%. The “Government of Canada Yield” computed on March 1, 2021 is
0.849%. Accordingly, the annual fixed dividend rate applicable to the Series AM Preferred Shares for the
period of five years beginning on March 31, 2021 will be 2.939%.

5. As of March 31, 2021, the Series AN Preferred Shares will, should they remain outstanding, continue to pay, for
each quarterly period, as and when declared by the Board of Directors of BCE Inc., a quarterly floating
dividend rate equal to the “Floating Quarterly Dividend Rate” for such quarterly period. The “Floating
Quarterly Dividend Rate” for any such quarterly period shall be equal to the rate, expressed as a percentage,
equal to the sum of: (a) the “T-Bill Rate”, calculated in accordance with the articles of BCE Inc. on the 30th day
prior to the first day of the new quarterly period, and (b) 2.09%, calculated on the basis of the actual number
of days in such quarterly period divided by 365. The “T-Bill Rate” means, for any quarterly period, the
average yield expressed as a percentage per annum on three-month Government of Canada Treasury Bills,
as reported by the Bank of Canada, for the most recent treasury bills auction preceding the applicable
calculation date. The “Floating Quarterly Dividend Rate” computed on March 1, 2021 and applicable to the
Series AN Preferred Shares for the quarterly period from and including March 31, 2021 to but excluding June
30, 2021 will be 0.53927% (annual rate of 2.163%, based on a T-Bill Rate of 0.073%).

6. After the end of the conversion period on March 16, 2021, if BCE Inc. determines that there would be less than
1,000,000 Series AM Preferred Shares outstanding after the conversion date (March 31, 2021), BCE Inc. will
automatically convert all remaining Series AM Preferred Shares into Series AN Preferred Shares. However, if
BCE Inc. determines that there would be less than 1,000,000 Series AN Preferred Shares outstanding after
the conversion date, then no Series AM Preferred Shares will be converted into Series AN Preferred Shares.
7. For any questions about the steps to be followed, please contact AST Trust Company (Canada) at 1-800-561-
0934, the transfer agent and registrar for BCE Inc.’s preferred shares.

DATED in Montréal, this 1st day of March, 2021.
Glen LeBlanc
Executive Vice-President and Chief Financial Officer
BCE Inc.

BCE.PR.M was issued as BAF.PR.A, a FixedReset 4.85%+209, issued 2011-3-15 after being announced 2011-2-22. After an exchange offer for the BAF preferreds, there was a partial conversion to BCE preferreds, followed by a forced conversion in 2014. The ticker changed to BCE.PR.M in September, 2014. BCE.PR.M reset to 2.764% in 2016. I recommended against conversion but there was a 17% conversion to the FloatingReset, BCE.PR.N, anyway.

BCE.PR.N is a FloatingReset, Bills+209, that arose through partial conversion from the FixedReset, BCE.PR.M, in 2016.

RF Capital Group Inc. has announced that it:

incorrectly published the new dividend rate for its Cumulative 5-Year Rate Reset Preferred Shares, Series B (Series B Shares). The dividend rate for the five-year period commencing on April 1, 2021 and ending on and including March 31, 2026 will be 3.73% per annum or $0.233313 per share per quarter, being equal to the sum of the five year Government of Canada bond yield determined as of March 1, 2021, plus 2.89%, in accordance with the terms of the Series B Shares.

The prior press release announced:

the applicable dividend rates for its Cumulative 5-Year Rate Reset Preferred Shares, Series B (the Series B Shares) and its Cumulative Floating Rate Preferred Shares, Series C (the Series C Shares), further to its press release dated February 25, 2021, announcing that it did not exercise its right to redeem all or any part of the currently outstanding Series B Shares or Series C Shares and, as a result of which, subject to certain conditions, the holders of the Series B Shares have the right to convert all or any part of their Series B Shares into Series C Shares on a one-for-one basis and vice versa.

With respect to any Series B Shares that remain outstanding after March 31, 2021, holders thereof will be entitled to receive quarterly fixed, cumulative, preferential cash dividends, if, as and when declared by the Board of Directors of the Company, subject to the provisions of the Business Corporations Act (Ontario). The dividend rate for the five-year period commencing on April 1, 2021 and ending on and including March 31, 2026 will be 3.70% per annum or $0.231313 per share per quarter, being equal to the sum of the five year Government of Canada bond yield determined as of today, plus 2.89%, in accordance with the terms of the Series B Shares.

With respect to any Series C Shares that remain outstanding after March 31, 2021, holders thereof will be entitled to receive quarterly floating rate, cumulative, preferential cash dividends, if, as and when declared by the Board of Directors of the Company, subject to the provisions of the Business Corporations Act (Ontario). The dividend rate for the three-month period commencing on April 1, 2021 and ending on and including June 30, 2021 will be 3.00% per annum or $0.186799 per share for the quarter, being equal to the sum of the three-month Government of Canada Treasury Bill yield determined as of today, plus 2.89% (calculated on the basis of the actual number of days elapsed during such quarterly period divided by 365), in accordance with the terms of the Series C Shares. The quarterly floating dividend rate will be reset every quarter.

Beneficial owners of Series B Shares or Series C Shares who wish to exercise their conversion right should communicate as soon as possible with their broker or other nominee to ensure their instructions are followed for exercising such right on or prior to the deadline for exercise, which is 5:00 p.m. (Toronto time) on March 16, 2021.

RCG.PR.B was issued as GMP.PR.B, a FixedReset 5.50%+289, which commenced trading 2011-2-22 after being announced 2011-2-1. The notice of extension was reported on PrefBlog. The issue reset at 3.611% in 2016; there was a 22% conversion to GMP.PR.C. It is tracked by HIMIPref™ but is relegated to the Scraps index on credit concerns. The ticker was changed from GMP.PR.B to RCG.PR.B in 2020, following a name change.

RCG.PR.C is a FloatingReset, Bills+289, that came into existence via a 22% conversion from GMP.PR.B in 2016. The ticker was changed from GMP.PR.C to RCG.PR.C in 2020, following a name change.

Cenovus Energy Inc. has announced:

the company does not intend to exercise its right to redeem its Cumulative Redeemable First Preferred Shares, Series 1 (Series 1 Shares) and Cumulative Redeemable First Preferred Shares, Series 2 (Series 2 Shares) on March 31, 2021. As a result, subject to certain conditions:

the holders of Series 1 Shares have the right to choose one of the following options with regard to their shares:
retain any or all of their Series 1 Shares and continue to receive an annual fixed-rate dividend paid quarterly; or
convert, on a one-for-one basis, any or all of their Series 1 Shares into Series 2 Shares and receive an annual floating-rate dividend paid quarterly, and
the holders of Series 2 Shares have the right to choose one of the following options with regard to their shares:
retain any or all of their Series 2 Shares and continue to receive an annual floating-rate dividend paid quarterly; or
convert, on a one-for-one basis, any or all of their Series 2 Shares into Series 1 Shares and receive an annual fixed-rate dividend paid quarterly.
Conversion to either Series 1 Shares or Series 2 Shares is subject to the conditions that, after taking into account all Series 1 Shares and Series 2 Shares tendered for conversion: (i) if Cenovus determines there would be less than 1,000,000 Series 1 Shares outstanding after March 31, 2021, then all remaining Series 1 Shares will automatically be converted to Series 2 Shares on a one-for-one basis on March 31, 2021 and no Series 2 Shares tendered for conversion will be converted into Series 1 Shares; and (ii) if Cenovus determines there would be less than 1,000,000 Series 2 Shares outstanding after March 31, 2021, then all remaining Series 2 Shares will automatically be converted to Series 1 Shares on a one-for-one basis on March 31, 2021 and no Series 1 Shares tendered for conversion will be converted into Series 2 Shares. In either case, Cenovus will issue a news release to that effect no later than March 24, 2021.

Holders of Series 1 Shares who choose to retain any or all of their shares or holders of Series 2 Shares who choose to convert to Series 1 Shares will receive the new annual fixed-rate dividend paid quarterly applicable to the Series 1 Shares for the five-year period commencing March 31, 2021 to, but excluding, March 31, 2026 of 2.577%, being equal to the sum of the Government of Canada five-year bond yield of 0.847% plus 1.73% in accordance with the terms of the Series 1 Shares, subject to the conditions described above.

Holders of Series 2 Shares who choose to retain any or all of their shares or holders of Series 1 Shares who choose to convert to Series 2 Shares will receive a new annual floating-rate dividend paid quarterly applicable to the Series 2 Shares for the five-year period commencing March 31, 2021 to, but excluding, March 31, 2026. The dividend rate applicable to the Series 2 Shares for the three-month period commencing March 31, 2021 to, but excluding, June 30, 2021 will be 1.80301%, being equal to the annual rate for the most recent auction of 90-day Government of Canada Treasury Bills of 0.073% plus 1.73%, in accordance with the terms of the Series 2 Shares (the Floating Quarterly Dividend Rate), subject to the conditions described above. The Floating Quarterly Dividend Rate will be reset every quarter.

Beneficial owners of Series 1 Shares or Series 2 Shares who wish to exercise the right of conversion should communicate as soon as possible with their brokers or other nominees in order to meet the deadline for registered holders to exercise such right, which is 5 p.m. ET on March 16, 2021. It is recommended this communication be had well in advance of the deadline in order to provide the brokers or other intermediaries with time to complete the necessary steps. Holders of Series 1 Shares who do not exercise the right of conversion by this deadline will continue to hold Series 1 Shares with the new annual fixed rate dividend, subject to the conditions described above. Holders of Series 2 Shares who do not exercise the right of conversion by this deadline will continue to hold Series 2 Shares with the new annual floating rate dividend, which will be reset every quarter, subject to the conditions described above.

Holders of the Series 1 Shares and the Series 2 Shares will have the opportunity to convert their shares again on March 31, 2026 and every five years thereafter as long as the shares remain outstanding.

CVE.PR.A was issued as HSE.PR.A, a FixedReset, 4.45%+173, on 2011-3-18 after being announced 2011-3-10. Notice of extension was published in February, 2016 and the issue reset to 2.404%. I recommended against conversion but there was a 13% conversion to the FloatingReset HSE.PR.B anyway. The ticker changed to CVE.PR.A following the Plan of Arrangement between HSE and CVE.

CVE.PR.B is a FloatingReset, Bills+173, that arose via a partial conversion from HSE.PR.A to HSE.PR.B in 2016. The ticker changed to CVE.PR.B following the Plan of Arrangement between HSE and CVE.