PrefBlog

DBRS has announced that it:

changed the trends on Co-operators General Insurance Company (CGIC or the Company) to Positive from Stable. DBRS Morningstar confirmed the Financial Strength Rating and Issuer Rating of the Company at A (low). DBRS Morningstar also confirmed the Non-Cumulative Preference Shares rating of the Company at Pfd-2 (low).

KEY RATING CONSIDERATIONS
The change in the trend to Positive from Stable reflects CGIC’s consistent premiums growth in recent years, and its improved trend in underwriting performance and profitability, due in part to actions taken by management, and fewer claims events compared with prior years. DBRS Morningstar expects the improved financial performance to continue, although not at levels seen in H1 2021. The Positive trend also reflects the Company’s strengthened regulatory capital position.

The affected issue is CCS.PR.C.

Manulife Financial Corporation has announced:

its intention to redeem all of its outstanding 8,000,000 Non-cumulative Rate Reset Class 1 Shares Series 5 (“Series 5 Preferred Shares”) for cash on December 19, 2021. The Series 5 Preferred Shares (TSX: MFC.PR.G) are redeemable at Manulife’s option on December 19, 2021, at a redemption price per Series 5 Preferred Share equal to C$25.00 for an aggregate total of C$200 million. Formal notice will be delivered to holders of Series 5 Preferred Shares in accordance with the terms outlined in the share provisions for the Series 5 Preferred Shares.

Separately from the redemption price, the final quarterly dividend of C$0.243188 per Series 5 Preferred Share will be paid in the usual manner on or after December 19, 2021 to shareholders of record on December 1, 2021. After the Series 5 Preferred Shares are redeemed, holders of Series 5 Preferred Shares will cease to be entitled to distributions of dividends and will not be entitled to exercise any rights as holders other than to receive the redemption price.

MFC.PR.G was issued as a 4.40%+290 FixedReset that commenced trading 2011-12-6 after being announced 2011-11-29. It was reported on PrefBlog in 2016 that MFC.PR.G would be extended; that the reset rate was 3.891% and that I recommended holders not convert; there was no conversion in 2016.

Great-West Lifeco Inc. has announced:

that it intends to redeem all of its outstanding 5.90% Non-Cumulative First Preferred Shares, Series F (the Series F Shares) on December 31, 2021. The redemption price will be $25.00 for each Series F Share plus an amount equal to all declared and unpaid dividends, less any tax required to be deducted and withheld by the Corporation. The paid-up capital of the Series F Shares is $20.59 per share.

Lifeco will send a formal redemption notice and instructions to registered holders of the Series F Shares in accordance with the rights, privileges, restrictions and conditions attached to the shares.

Taxable investors should pay particular attention to the statement:

The paid-up capital of the Series F Shares is $20.59 per share.

In most redemptions, the tax treatment is as if you sold the shares for the redemption price, in this cas $25.00. However, in this instance it will be as if you sold the shares for 20.59 and received a dividend (deemed dividend) of 4.41. While this will be better for some sharhelders, it will be worse for other – probably most others, I would guess, since a lot of people will have no realized gains this year to offset the probable capital loss. Get professional tax advice and consider selling into the market prior to redemption.

GWO.PR.F is a Straight Perpetual, 5,90%, issued 2003-6-19. These shares were issued as part of the consideration in the takeover of Canada Life Financial Corporation (see SEDAR, search for Great-West Lifeco Inc. May 1 2003 13:28:06 ET Press release – English PDF 226 K, not allowed to link to this public press release directly as the Canadian Securities Administrators consider this information top secret):

On February 14, 2003, Lifeco entered into an agreement with Canada Life Financial Corporation (Canada Life), the parent company of The Canada Life Assurance Company, to acquire 100% of Canada Life outstanding common shares. The transaction is valued at $44.50 per Canada Life common share, representing an aggregate transaction value of $7.3 billion.

The terms of the agreement allow Canada Life common shareholders to elect to receive one of the following alternatives for each of their Canada Life common shares:
– $44.50 in cash (to an aggregate maximum of approximately $4.4 billion); or
– 1.78 Lifeco 4.80% Non-Cumulative First Preferred Shares, Series E (to an aggregate maximum of 24 million Lifeco Series E Shares); or
– 1.78 Lifeco 5.90% Non-Cumulative First Preferred Shares, Series F (to an aggregate maximum of 8 million Lifeco Series F Shares); or
– 1.1849 Lifeco common shares (to an aggregate maximum of approximately 56 million Lifeco common shares); or
– any combination of the foregoing;
in each case subject to election and proration as a result of the stated maximums.

The transaction is subject to approval by Canada Life common shareholders on May 5, 2003 and is also subject to approval by regulatory authorities. The transaction is expected to close in the third quarter of 2003.

To support the transaction, Power Financial Corporation has committed to invest $800 to purchase 21.302 million common shares of Lifeco from treasury via private placement. Investors Group Inc. has also agreed to invest $100 by purchasing 2.662 million Lifeco common shares from treasury via private placement. Lifeco also entered into a commitment with a Canadian chartered bank (the “Bank”) pursuant to which the Bank agreed to underwrite a credit facility in favour of Lifeco or one or more of its subsidiaries. The credit facility provides short-term funding alternatives, and also offers up to $600 of five year term financing.