PrefBlog

Royal Bank of Canada has announced:

its intention to redeem all of its issued and outstanding Non-Cumulative First Preferred Shares, Series BJ (Series BJ shares) (TSX: RY.PR.P) on February 24, 2022, for cash at a redemption price of $25.75 per share to be paid on February 24, 2022.

There are 6,000,000 Series BJ shares outstanding, representing $150 million of capital. The redemptions will be financed out of the general corporate funds of Royal Bank of Canada.

The final quarterly dividend of $0.328125 for each of the Series BJ shares, subject to declaration by the board of directors, will be paid separately from the redemption price for each of the Series BJ Shares and in the usual manner on February 24, 2022 to shareholders of record at the close of business on January 26, 2022. After such dividend payments, the holders of Series BJ shares will cease to be entitled to dividends.

RY.PR.P is a PerpetualDiscount, 5.25%, that commenced trading 2015-10-2 after being announced 2015-9-24. The issue has been tracked by HIMIPref™ and is assigned to the PerpetualPremium subindex.

Investors should be aware of a tax wrinkle in this redemption, in that the redemption price is 25.75. For tax purposes, this is regarded as a sale at $25.00 and a deemed dividend of $0.75. Those who cannot immediately use any capital loss generated by this sale to offset capital gains on current taxes should seriously consider selling on the market; by being redeemed they are paying tax immediately on the dividend but getting no immediate offset; by selling at around 25.75, they will at least avoid such a grievous mismatch in the relative timing of the two taxes.

Thanks to Assiduous Reader CanSiamCyp for bringing this to my attention!

Enbridge Inc. has announced:

that it intends to exercise its right to redeem all of its outstanding Cumulative Redeemable Minimum Rate Reset Preference Shares, Series 17 (“Series 17 Shares”) on March 1, 2022 at a price of $25.00 per Series 17 Share, together with all accrued and unpaid dividends, if any.

Beneficial holders who are not directly the registered holders of the Series 17 Shares should contact the financial institution, broker or other intermediary through which they hold these shares to confirm how they will receive their redemption proceeds. Inquiries from registered shareholders should be directed to Enbridge’s Registrar and Transfer Agent, Computershare Investor Services Inc., at 1-800-564-6253 (Canada and United States) or 1-514-982-7555 (Outside North America).

This confirms their recent consideration of this redemption.

ENB.PF.I is a FixedReset 5.15%+414M515, that commenced trading 2016-11-23 after being announced 2016-11-15. It is tracked by HIMIPref™ and has been added to the Scraps index due to credit concerns.

Thanks to Assiduous Reader CanSiamCyp for bringing this to my attention!

Quadravest has announced:

North American 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 led by National Bank Financial Inc.

The Preferred Shares will be offered at a price of $10.05 per Preferred Share to yield 6.7% and the Class A Shares will be offered at a price of $7.75 per Class A Share to yield 17.5%.

The closing price on the TSX of each of the Preferred Shares and the Class A Shares on January 18, 2022 was $10.14 and $7.87, respectively.

Since inception of the Company, the aggregate dividends declared on the Preferred Shares have been $9.33 per share
and the aggregate dividends declared on the Class A Shares have been $15.36 per share, for a combined total of $24.69. 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:
i. 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
2024; and
ii. on or about the termination date, currently December 1, 2024 (subject to further 5 year extensions thereafter), to pay the holders of the Preferred Shares $10.00 per Preferred Share.

Class A Shares:
i. 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
ii. 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, 2024 (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 20, 2022. The offering is expected to close on or about January 27, 2022 and is subject to certain closing conditions including approval by the TSX.

So Whole Units are being offered for $17.80, against a January 14 NAVPU of 17.49, an apparent premium of a very slim 1.8%.