PrefBlog

Pembina Pipeline Corporation has announced:

that it does not intend to exercise its right to redeem the currently outstanding Cumulative Redeemable Minimum Rate Reset Class A Preferred Shares, Series 21 (“Series 21 Shares”) (TSX: PPL.PF.A) on March 1, 2023.

As a result of the decision not to redeem the Series 21 Shares, and subject to certain terms of the Series 21 Shares, the holders of the Series 21 Shares will have the right to elect to convert all or part of their Series 21 Shares on a one-for-one basis into Cumulative Redeemable Floating Rate Class A Preferred Shares, Series 22 of Pembina (“Series 22 Shares”) on March 1, 2023 (the “Conversion Date”). Holders who do not exercise their right to convert their Series 21 Shares into Series 22 Shares will retain their Series 21 Shares.

As provided in the terms of the Series 21 Shares: (i) if Pembina determines that there would remain outstanding immediately following the conversion less than 1,000,000 Series 21 Shares, then all remaining Series 21 Shares will be automatically converted into Series 22 Shares on a one-for-one basis effective as of the Conversion Date; or (ii) if Pembina determines that there would be less than 1,000,000 Series 22 Shares outstanding immediately following the conversion, no Series 21 Shares will be converted into Series 22 Shares on the Conversion Date. There are currently 16,000,000 Series 21 Shares outstanding.

With respect to any Series 21 Shares that remain outstanding after the Conversion Date, holders thereof will be entitled to receive quarterly fixed cumulative preferential cash dividends, if, as and when declared by the Board of Directors of Pembina. The annual dividend rate for the Series 21 Shares for the five-year period from and including March 1, 2023, to, but excluding, March 1, 2028, will be 6.302 percent, being equal to the five-year Government of Canada bond yield of 3.042 percent determined as of today plus 3.26 percent, in accordance with the terms of the Series 21 Shares.

With respect to any Series 22 Shares that may be issued on the Conversion Date, 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 Pembina. The annual dividend rate applicable to the Series 22 Shares for the three-month floating rate period from and including March 1, 2023, to, but excluding, June 1, 2023, will be 7.706 percent, being equal to the annual rate of interest for the most recent auction of 90-day Government of Canada treasury bills of 4.446 percent plus 3.26 percent, in accordance with the terms of the Series 22 Shares (the “Floating Quarterly Dividend Rate”). The Floating Quarterly Dividend Rate will be reset on the first day of March, June, September and December in each year.

Beneficial holders of Series 21 Shares who wish to exercise their right of conversion during the conversion period, which runs from January 30, 2023, until 3:00 pm (MT) / 5:00 pm (ET) on February 14, 2023, should communicate as soon as possible with their broker or other intermediary for more information. It is recommended that this be done well in advance of the deadline in order to provide the broker or other intermediary with the time to complete the necessary steps. Any notices received after this deadline will not be valid.

As previously announced, the dividend payable on March 1, 2023, to holders of the Series 21 Shares of record on February 1, 2023, will be $0.30625 per Series 21 Share, consistent with the dividend rate in effect since the issuance of the Series 21 Shares. For more information on the terms of the Series 21 Shares and the Series 22 Shares, please see the prospectus supplement dated November 30, 2017, which can be found on SEDAR at www.sedar.com.

PPL.PF.A was issued as a FixedReset 4.90%+326M490 that commenced trading 2017-12-7 after being announced 2017-11-28. It is tracked by HIMIPref™, but has been relegated to the Scraps – FixedResets (Discount) subindex on credit concerns.

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

Enbridge Inc. has announced:

that it does not intend to exercise its right to redeem its currently outstanding Cumulative Redeemable Preference Shares, Series D (Series D Shares) (TSX: ENB.PR.D) on March 1, 2023. As a result, subject to certain conditions, the holders of the Series D Shares have the right to convert all or part of their Series D Shares on a one-for-one basis into Cumulative Redeemable Preference Shares, Series E of Enbridge (Series E Shares) on March 1, 2023. Holders who do not exercise their right to convert their Series D Shares into Series E Shares will retain their Series D Shares.

The foregoing conversion right is subject to the conditions that: (i) if Enbridge determines that there would be less than 1,000,000 Series D Shares outstanding after March 1, 2023, then all remaining Series D Shares will automatically be converted into Series E Shares on a one-for-one basis on March 1, 2023; and (ii) alternatively, if Enbridge determines that there would be less than 1,000,000 Series E Shares outstanding after March 1, 2023, no Series D Shares will be converted into Series E Shares. There are currently 18,000,000 Series D Shares outstanding.

With respect to any Series D Shares that remain outstanding after March 1, 2023, holders thereof will be entitled to receive quarterly fixed cumulative preferential cash dividends, as and when declared by the Board of Directors of Enbridge. The new annual dividend rate applicable to the Series D Shares for the five-year period commencing on March 1, 2023 to, but excluding, March 1, 2028 will be 5.412 percent, being equal to the five-year Government of Canada bond yield of 3.042 percent determined as of today plus 2.37 percent in accordance with the terms of the Series D Shares.

With respect to any Series E Shares that may be issued on March 1, 2023, holders thereof will be entitled to receive quarterly floating rate cumulative preferential cash dividends, as and when declared by the Board of Directors of Enbridge. The dividend rate applicable to the Series E Shares for the three-month floating rate period commencing on March 1, 2023 to, but excluding, June 1, 2023 will be 1.71901 percent, based on the annual rate on three month Government of Canada treasury bills for the most recent treasury bills auction of 4.45 percent plus 2.37 percent in accordance with the terms of the Series E Shares (the Floating Quarterly Dividend Rate). The Floating Quarterly Dividend Rate will be reset every quarter.

Beneficial holders of Series D Shares who wish to exercise their right of conversion during the conversion period, which runs from January 30, 2023 until 5:00 p.m. (EST) on February 14, 2023, should communicate as soon as possible with their broker or other intermediary for more information. It is recommended that this be done well in advance of the deadline in order to provide the broker or other intermediary time to complete the necessary steps. Any notices received after this deadline will not be valid.

ENB.PR.D is a FixedReset, 4.00%+237, that commenced trading 2011-11-23 after being announced 2011-11-14. It reset to 4.46% in 2018; I recommended against conversion; and there was no conversion. The issue is tracked by HIMIPref™ but relegated to the Scraps – FixedReset (Discount) subindex due to credit concerns.

Thanks to Assiduous Readers niagara and Fuzzybear for bringing this to my attention!

Enbridge Inc. has announced:

that it does not intend to exercise its right to redeem its currently outstanding Cumulative Redeemable Minimum Rate Reset Preference Shares, Series 19 (Series 19 Shares) (TSX: ENB.PF.K) on March 1, 2023. As a result, subject to certain conditions, the holders of the Series 19 Shares have the right to convert all or part of their Series 19 Shares on a one-for-one basis into Cumulative Redeemable Preference Shares, Series 20 of Enbridge (Series 20 Shares) on March 1, 2023. Holders who do not exercise their right to convert their Series 19 Shares into Series 20 Shares will retain their Series 19 Shares.

The foregoing conversion right is subject to the conditions that: (i) if Enbridge determines that there would be less than 1,000,000 Series 19 Shares outstanding after March 1, 2023, then all remaining Series 19 Shares will automatically be converted into Series 20 Shares on a one-for-one basis on March 1, 2023; and (ii) alternatively, if Enbridge determines that there would be less than 1,000,000 Series 20 Shares outstanding after March 1, 2023, no Series 19 Shares will be converted into Series 20 Shares. There are currently 20,000,000 Series 19 Shares outstanding.

With respect to any Series 19 Shares that remain outstanding after March 1, 2023, holders thereof will be entitled to receive quarterly fixed cumulative preferential cash dividends, as and when declared by the Board of Directors of Enbridge. The new annual dividend rate applicable to the Series 19 Shares for the five-year period commencing on March 1, 2023 to, but excluding, March 1, 2028 will be 6.212 percent, being equal to the five-year Government of Canada bond yield of 3.042 percent determined as of today plus 3.17 percent in accordance with the terms of the Series 19 Shares.

With respect to any Series 20 Shares that may be issued on March 1, 2023, holders thereof will be entitled to receive quarterly floating rate cumulative preferential cash dividends, as and when declared by the Board of Directors of Enbridge. The dividend rate applicable to the Series 20 Shares for the three-month floating rate period commencing on March 1, 2023 to, but excluding, June 1, 2023 will be 1.92066 percent, based on the annual rate on three month Government of Canada treasury bills for the most recent treasury bills auction of 4.45 percent plus 3.17 percent in accordance with the terms of the Series 20 Shares (the Floating Quarterly Dividend Rate). The Floating Quarterly Dividend Rate will be reset every quarter.

Beneficial holders of Series 19 Shares who wish to exercise their right of conversion during the conversion period, which runs from January 30, 2023 until 5:00 p.m. (EST) on February 14, 2023, should communicate as soon as possible with their broker or other intermediary for more information. It is recommended that this be done well in advance of the deadline in order to provide the broker or other intermediary time to complete the necessary steps. Any notices received after this deadline will not be valid.

ENB.PF.K was issued as a FixedReset 4.90%+317M490 that commenced trading 2017-2-11 after being announced 2017-12-4. It has been added to the HIMIPref™ database but has been relegated to the Scraps subindex on credit concerns.

Thanks to Assiduous Readers niagara and CanSiamCyp for bringing this to my attention!

Brompton Funds has announced:

As previously announced, the board of directors of Brompton Oil Split Corp. (the “Fund”) determined that it would extend the maturity date of the class A and preferred shares of the Company. Today, the board of directors announces that the new term of the Fund will be 1 year to March 28, 2024. In addition, the distribution rate for the preferred shares (the “Preferred Shares”) for the new term from March 31, 2023 to March 28, 2024 has been increased to $0.80 per Preferred Share per annum (8.0% on the original issue price of $10) payable quarterly. The new Preferred Share distribution rate is based on current market rates for preferred shares with similar terms. In addition, the Fund intends to maintain the targeted monthly Class A Share distribution rate at $0.10 per Class A Share.

The Fund invests in a portfolio of equity securities of large capitalization North American oil and gas issuers, primarily focused on those with significant exposure to oil. The Manager believes that the Fund’s strategy is well positioned to participate in opportunities that are expected to continue in the energy sector.

In connection with the extension, shareholders who do not wish to continue their investment in the Fund, will be able to retract Preferred Shares or Class A Shares on March 30, 2023 pursuant to a special retraction right and receive a retraction price that is calculated in the same way that such price would be calculated if the Fund were to terminate on March 30, 2023. Pursuant to this option, the retraction price may be less than the market price if the security is trading at a premium to net asset value. To exercise this retraction right, shareholders must provide notice to their investment dealer by February 28, 2023 at 5:00 p.m. (Toronto time). Alternatively, shareholders may sell their Preferred Shares and/or Class A Shares through their securities dealer for the market price at any time, potentially at a higher price than would be achieved through retraction, or shareholders may take no action and continue to hold their shares.

Thanks to Assiduous Reader RAV4guy for bringing this to my attention. As he suggests, the crucial question is “Will it stop the current owners retracting?”, following the 41% retraction of SBC.PR.A at the end of 2022 and the 75% retraction of OSP.PR.A itself in early 2020. Well, you got me! The issue has been trading slightly under par during January and the Whole Unit NAPVU is 14.62 as of 2023-1-26, much healthier than the 8.28 at the end of February 2020. On the other hand, DGS.PR.A is yielding 9.63% at its current bid price of 9.45, despite a Whole Unit NAVPU of 15.29 as of 2023-1-26. Added to which, OSP.PR.A is inherently less credit-worthy due to its concentration in the oil industry. So retraction, or a prior sale on the market at 10.00+, certainly looks attractive! The decision would be far more complex if Brompton had offered a longer term for that big fat 8.00%.

The capital units, by the way, are trading above intrinisic value at 4.85 VWAP, but volume is low and the price shot up on Friday and there hasn’t been a Capital Unit Distribution for quite a while. It won’t take much of a capital share consolidation following preferred retraction to get the distribution flowing again … could it be that Friday’s buyers are anticipating exactly that, to be followed by a pop in the capital units from those who look for dividend yield without qualifications or reservations?

This is very old (2022-9-6), but is being added for completeness: Manulife Financial Corporation has announced:

that after having taken into account all election notices received by the September 2, 2022 deadline for conversion of its currently outstanding 10,000,000 Non-cumulative Rate Reset Class 1 Shares Series 9 (the “Series 9 Preferred Shares”) (TSX: MFC.PR.I) into Non-cumulative Floating Rate Class 1 Shares Series 10 of Manulife (the “Series 10 Preferred Shares”), the holders of Series 9 Preferred Shares are not entitled to convert their Series 9 Preferred Shares into Series 10 Preferred Shares. There were 26,525 Series 9 Preferred Shares elected for conversion, which is less than the minimum one million shares required to give effect to conversions into Series 10 Preferred Shares.

As announced by Manulife on August 22, 2022, after September 19, 2022, holders of Series 9 Preferred Shares will be entitled to receive fixed rate non-cumulative preferential cash dividends on a quarterly basis, as and when declared by the Board of Directors of Manulife and subject to the provisions of the Insurance Companies Act (Canada). The dividend rate for the five-year period commencing on September 20, 2022, and ending on September 19, 2027, will be 5.97800% per annum or $0.373625 per share per quarter, being equal to the sum of the five-year Government of Canada bond yield as of August 22, 2022, plus 2.86%, as determined in accordance with the terms of the Series 9 Preferred Shares.

Subject to certain conditions described in the prospectus supplement dated May 16, 2012 relating to the issuance of the Series 9 Preferred Shares, Manulife may redeem the Series 9 Preferred Shares, in whole or in part, on September 19, 2027 and on September 19 every five years thereafter.

MFC.PR.I was issued as a FixedReset, 4.40%+286, that commenced trading 2012-5-24 after being announced 2012-5-16. After the 2017 announcement the issue would be extended, the rate was reset to 4.35100% and I recommended against conversion; there was no conversion. Notice of extension earlier in 2022 has been previously reported and announcement of the reset rate at 5.978% soon followed. MFC.PR.I is tracked by HIMIPref™ and is included in the FixedReset (Discount) subindex.

Thanks to Assiduous Reader JD for reminding me of incomplete reporting!