PrefBlog

Brookfield Asset Management Inc. has announced:

that 147,537 of its Cumulative Class A Preference Shares, Series 26 (the “Series 26 Shares”) (TSX: BAM.PR.T) and 27,550 of its Cumulative Class A Preference Shares, Series 46 (the “Series 46 Shares”) (TSX: BAM.PF.I), were tendered for conversion into Cumulative Class A Preference Shares, Series 27 (the “Series 27 Shares”) and Cumulative Class A Preference Shares, Series 47 (the “Series 47 Shares”), respectively.

After taking into account all shares tendered for conversion, there would be less than one million shares outstanding for each of the Series 27 Shares and the Series 47 Shares, as of March 31, 2022, the conversion date. Accordingly, as provided in the share conditions of each of the series, there will be no conversion of Series 26 Shares into Series 27 Shares, nor of Series 46 Shares into Series 47 Shares and holders of Series 26 Shares and of Series 46 Shares will retain their Series 26 Shares and Series 46 Shares, respectively.

BAM.PF.I was issued as a FixedReset, 4.80%+385M480 that commenced trading 2016-11-18 after being announced 2016-11-10. BAM.PF.I will reset at 5.386% effective April 1, 2022. I recommended against conversion.

Brookfield Asset Management Inc. has announced:

that 147,537 of its Cumulative Class A Preference Shares, Series 26 (the “Series 26 Shares”) (TSX: BAM.PR.T) and 27,550 of its Cumulative Class A Preference Shares, Series 46 (the “Series 46 Shares”) (TSX: BAM.PF.I), were tendered for conversion into Cumulative Class A Preference Shares, Series 27 (the “Series 27 Shares”) and Cumulative Class A Preference Shares, Series 47 (the “Series 47 Shares”), respectively.

After taking into account all shares tendered for conversion, there would be less than one million shares outstanding for each of the Series 27 Shares and the Series 47 Shares, as of March 31, 2022, the conversion date. Accordingly, as provided in the share conditions of each of the series, there will be no conversion of Series 26 Shares into Series 27 Shares, nor of Series 46 Shares into Series 47 Shares and holders of Series 26 Shares and of Series 46 Shares will retain their Series 26 Shares and Series 46 Shares, respectively.

BAM.PR.T was issued as a FixedReset, 4.50%+231, that commenced trading 2010-10-29 after being announced 2010-10-21. In 2017 it reset to 3.471%; I recommended against conversion; and there was no conversion. In 2022, the issue reset to 3.846%.

Assiduous Reader JD contacted me last night about my choice of words in the March PrefLetter:

Hi James
Prefletter gave me the impression that the TRP.PR.K redemption was not officially confirmed.
“skeptical” posted a link to the official announcement by TRP in one of his comments to the March 9 Prefblog.

Well, if one person asks, that means at least ten people are curious, so here’s the answer:

See also the update to my post at https://prefblog.com/?p=43058.

It’s tricky. The press release states “The Company intends to use the proceeds to redeem its issued and outstanding Cumulative RedeemableMinimum Rate First Preferred Shares, Series 15 (TSX:TRP.PR.K) pursuant to their terms, …”

… and therefore PrefLetter states “The issuer has announced its intention to redeem TRP.PR.K at par at the end of May, 2022.”. The phrasing in PrefLetter was deliberately chosen to reflect the phrasing of the press release.

My point is that they have not yet issued an official notice of redemption to the registered shareholder. Until they do that they have full discretion to change their intentions … although the market would certainly punish a reversal.

James

I should also point out that according to the prospectus for TRP.PR.K:

Notice of any redemption of Series 15 Shares will be given by the Corporation not more than 60 days and not less than 30 days prior to the date fixed for redemption.

… so at this point they cannot give formal notice of redemption even if they want to. (Update for clarity, 2022-3-18: ; they will have to wait until the redemption notice window opens in early April and may possibly wait until later). Those terms are fairly standard for preferred share redemptions, but I admit I cannot quote any statistics on the point.
It is also worthwhile quoting the disclamatory statements at the end of the release … all that boilerplate that we all read once in our lives and forget about (emphasis added):

This release contains certain information that is forward-looking and is subject to important risks and uncertainties (such statements are usually accompanied by words such as “anticipate”, “expect”, “believe”, “may”, “will”, “should”, “estimate”, “intend” or other similar words). Forward-looking statements in this document are intended to provide TC Energy security holders and potential investors with information regarding TC Energy and its subsidiaries, including management’s assessment of TC Energy’s and its subsidiaries’ future plans and financial outlook. All forward-looking statements reflect TC Energy’s beliefs and assumptions based on information available at the time the statements were made and as such are not guarantees of future performance. As actual results could vary significantly from the forward-looking information, you should not put undue reliance on forward-looking information and should not use future-oriented information or financial outlooks for anything other than their intended purpose. We do not update our forward-looking information due to new information or future events, unless we are required to by law. For additional information on the assumptions made, and the risks and uncertainties which could cause actual results to differ from the anticipated results, refer to the most recent Quarterly Report to Shareholders and Annual Report filed under TC Energy’s profile on SEDAR at www.sedar.com and with the U.S. Securities and Exchange Commission at www.sec.gov.

So I’ll continue to be very cautious about saying ‘to be redeemed’ and won’t commit myself any more than the company does!