PrefBlog

Power Corporation of Canada has announced:

that it intends to redeem all 86,100 of its outstanding Cumulative Redeemable First Preferred Shares, 1986 Series (the “1986 Series Shares”) on January 15, 2022.

In accordance with the terms of the 1986 Series Shares, the redemption price will be $50.00 per 1986 Series Share together with all accrued and unpaid dividends, net of any tax required to be withheld by the Corporation. On November 10, 2021, the board of directors of the Corporation declared a quarterly dividend on the 1986 Series Shares, payable January 15, 2022 to shareholders of record December 24, 2021, of $0.2144 [1]. A notice of the redemption of the 1986 Series Shares will be provided in accordance with the rights, privileges and conditions attached to the 1986 Series Shares.

POW.PR.F is a Floater, paying 70% of Canada Prime. It has been notable mainly for its unusual $50 par value, for its sinking fund and for the lackadaisical efforts to give effect to the sinking fund. It has been tracked by HIMIPref™ since the beginning of the database 1993-11-30 and has been assigned to the Scraps index for a long time due to volume concerns – at $340 daily, it has the lowest Average Daily Trading Value of any current issue. But it was in the BMO-CM “50” index as late as 1996!

BCE Inc. has announced:

1. Holders of fixed-rate BCE Inc. Series AK Preferred Shares have the right to convert all or part of their shares, effective on December 31, 2021, on a one-for-one basis, into floating-rate Cumulative Redeemable First Preferred Shares, Series AL of BCE Inc. (the “Series AL Preferred Shares”). In order to convert their shares, holders must exercise their right of conversion during the conversion period, which runs from December 1, 2021 until 5:00 p.m. (Montréal/Toronto time) on December 16, 2021.
…
4. As of December 31, 2021, the Series AK 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 semi-annually (the “Government of Canada Yield”), computed on December 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) 1.88%. The “Government of Canada Yield” computed on December 1, 2021 is 1.426%. Accordingly, the annual fixed dividend rate applicable to the Series AK Preferred Shares for the period of five years beginning on December 31, 2021 will be 3.306%.

BCE.PR.K was issued as a FixedReset, 4.15%+188, that commenced trading 2011-7-5 after being announced 2011-6-20. Astonishingly, it was re-opened in December, 2011; rare enough in itself, but what’s more it was sold at par even though the GOC-5 yield had tumbled to 1.33% from the time-of-issue level of about 2.20%. The issue reset at 2.954% in 2016 and I recommended against conversion; there was a 9% conversion to the FloatingReset, BCE.PR.L, anyway. BCE.PR.K is tracked by HIMIPref™, but is been relegated to the Scraps index on credit concerns.

BCE.PR.L is a FloatingReset, Bills+188, that arose via partial conversion from BCE.PR.K.

Brompton Group has announced (on December 8):

Dividend Growth Split Corp. (the “Company”) is pleased to announce it is undertaking an overnight treasury offering of class A and preferred shares (the “Class A Shares” and “Preferred Shares”, respectively).

The sales period for this overnight offering will end at 9:00 a.m. (ET) on Thursday, December 9, 2021. The offering is expected to close on or about December 15, 2021 and is subject to certain closing conditions including approval by the Toronto Stock Exchange (“TSX”).

The Class A Shares will be offered at a price of $6.80 per Class A Share for a distribution rate of 17.6% on the issue price, and the Preferred Shares will be offered at a price of $10.00 per Preferred Share for a yield to maturity of 5.6%. (1) The closing market price on the TSX for each of the Class A Shares and Preferred Shares on December 7, 2021 was $7.00 and $10.11, respectively. The Class A Share and Preferred Share offering prices were determined so as to be non-dilutive to the most recently calculated net asset value per unit of the Company (“Unit”) (calculated as at December 2, 2021), as adjusted for dividends and certain expenses to be accrued prior to or upon settlement of the offering. The offering is being led by RBC Capital Markets.

The Company invests in a portfolio (the “Portfolio”) consisting primarily of equity securities of Canadian dividend growth companies. In addition, the Company may hold up to 20% of the total assets of the Portfolio in global dividend growth companies for diversification and improved return potential, at the discretion of Brompton Funds Limited (the “Manager”). In order to qualify for inclusion in the Portfolio, at the time of investment and at the time of each periodic reconstitution and/or rebalancing, each dividend growth company included in the Portfolio must have (i) a market capitalization of at least CDN$2.0 billion; and (ii) a history of dividend growth or, in the Manager’s view, have high potential for future dividend growth.

The investment objectives for the Class A Shares are to provide holders with regular monthly cash distributions targeted to be at least $0.10 per Class A Share and to provide the opportunity for growth in the net asset value per Class A Share.

The investment objectives for the Preferred Shares are to provide holders with fixed cumulative preferential quarterly cash distributions, currently in the amount of $0.1375 per Preferred Share, and to return the original issue price to holders of Preferred Shares on September 27, 2024.

So the Whole Units were offered for 16.80, while the NAVPU on December 2 was 16.01, a 4.9% premium. I love this business!

Today, Brompton announced:

a successful overnight treasury offering of class A shares and preferred shares (the “Class A Shares” and “Preferred Shares”, respectively). Gross proceeds of the offering are expected to be approximately $76.4 million. The offering is expected to close on or about December 15, 2021 and is subject to certain closing conditions. The Company has granted the Agents (as defined below) an over-allotment option, exercisable for 30 days following the closing date of the offering, to purchase up to an additional 15% of the number of Class A Shares and Preferred Shares issued at the closing of the offering.

Thanks to Assiduous Reader JD for ensuring I was aware of this!

DBRS has announced that it:

changed the trends on Canadian Western Bank’s (CWB or the Bank) long-term ratings to Stable from Negative and maintained the trends on all short-term ratings at Stable. DBRS Morningstar also confirmed its ratings on CWB, including the Bank’s Long-Term Issuer Rating at A (low) and Short-Term Issuer Rating at R-1 (low). The Bank’s Intrinsic Assessment of A (low) and Support Assessment of SA3 are unchanged. The SA3 designation, which reflects no expectation of timely external support, results in the final rating being equivalent to the Intrinsic Assessment.

KEY RATING CONSIDERATIONS
The trend changes to Stable from Negative reflect DBRS Morningstar’s view that, despite the potential for some near-term volatility, the economic uncertainties facing the Bank because of the Coronavirus Disease (COVID-19) pandemic have largely abated. Indeed, the Bank has maintained good asset quality metrics. Although impairments initially increased as expected, they reverted to the historical average in F2021, remaining at manageable levels. Additionally, CWB’s earnings have proved resilient and the Bank has continued growing and diversifying its franchise through further expansion into Ontario as well as improving its level of directly sourced deposits.

In confirming the ratings, DBRS Morningstar recognizes CWB’s well-established and growing franchise, operating in the middle-market commercial space across Canada. Furthermore, the Bank has been successful in executing strategically targeted wealth and loan portfolio acquisitions that augment its business while providing some geographic and revenue diversification. The ratings also consider the Bank’s high level of exposure to the real estate sector, specifically to development projects in Western Canada; its modest level of fee-based revenues; and its lower capitalization relative to peers.

RATING DRIVERS
DBRS Morningstar would upgrade its ratings if CWB further diversifies its revenue mix with a material and sustainable increase in the level of noninterest income. Increased diversification of the loan book, including a reduction in the relative exposure to real estate project finance, would also result in a ratings upgrade.

Conversely, a ratings downgrade would occur should there be significant losses in the loan portfolio or a perceived weakness in loan underwriting and/or risk management. Furthermore, operational issues that negatively affect the Bank’s implementation of its various organizational systems and data projects or a reduction in capitalization to levels closer to regulatory minimums would also result in a ratings downgrade.

Affected issues are CWB.PR.B and CWB.PR.D .