PrefBlog

Brompton Group has announced (on 2024-2-28):

that the distribution rate for the preferred shares (the “Preferred Shares”) for the 5-year term from April 30, 2024 to April 27, 2029 will be $0.70 per Preferred Share per annum (7.0% on the par value of $10.00) payable quarterly. This represents a pre-tax interest equivalent yield of approximately 9.1%.(1) The Preferred Share distribution rate is based on current market rates for preferred shares with similar terms.

The term extension offers preferred shareholders the opportunity to enjoy preferential cash dividends until April 27, 2029. Over the past 10-year period to January 31, 2024, the Preferred Share has delivered a 6.1% per annum return.(2) The Preferred Share has delivered consistent returns with less volatility and has outperformed the S&P/TSX Preferred Share Index over the past 10-year period by 4.2% per annum.(2)

Annual Compound Returns(2)	1-Year	3-Year	5-Year	10-Year
Preferred Shares (TSX: LCS.PR.A)	6.4%	6.4%	6.4%	6.1%
S&P/TSX Preferred Share Index	4.5%	2.2%	3.9%	1.9%

In addition, the Fund intends to maintain the targeted monthly class A share (the “Class A Share”) distribution rate at $0.075 per Class A Share.(3) The Class A Share has outperformed both the S&P/TSX Capped Financials Index and the S&P/TSX Composite Index over the past 1, 3, 5, and 10-year periods. (2) Over the past 10-year period to January 31, 2024, the Class A Share has delivered an 11.6% per annum return, outperforming the S&P/TSX Capped Financials Index and the S&P/TSX Composite Index (the “TSX Composite”) by 2.0% per annum and 4.0% per annum, respectively. (2)

Annual Compound Returns(2)	1-Year	3-Year	5-Year	10-Year
Class A Shares (TSX: LCS)	39.8%	32.4%	25.5%	11.6%
S&P/TSX Capped Financials Index	4.6%	12.1%	9.8%	9.6%
S&P/TSX Composite Index	4.7%	10.0%	9.6%	7.6%

Since inception on April 18, 2007 to January 31, 2024, Class A shareholders have received cash distributions of $8.36 per Class A Share. Class A shareholders have the option to benefit by reinvesting their cash distributions in a distribution reinvestment plan (“DRIP”) which is commission free to participants. Class A shareholders can enroll in the DRIP program by contacting their investment advisor.

The Fund invests in a portfolio of common shares of Canada’s four largest publicly-listed life insurance companies, on an approximately equal weight basis: Great-West Lifeco Inc., iA Financial Group, Manulife Financial Corporation and Sun Life Financial Inc.

In connection with the extension, shareholders who do not wish to continue their investment in the Fund, will be able to retract their Preferred Shares or Class A Shares on April 29, 2024 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 April 29, 2024. 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 March 28, 2024 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 niagara for bringing this to my attention!

Algonquin Power & Utilities Corp. has announced:

that it does not intend to exercise its right to redeem all or part of the currently outstanding 4,000,000 Cumulative Rate Reset Preferred Shares, Series D (the “Series D Preferred Shares”) on April 1, 2024. As a result, subject to certain conditions, the holders of the Series D Preferred Shares have the right to convert all or part of their Series D Preferred Shares, on a one-for-one basis, into Cumulative Floating Rate Preferred Shares, Series E (the “Series E Preferred Shares”) on April 1, 2024 (the “Conversion Date”).

The terms and conditions of the Series D Preferred Shares, including the right to convert, are described in the prospectus supplement of the Company dated February 25, 2014 to a short form base shelf prospectus of the Company dated February 18, 2014, pursuant to which the Series D Preferred Shares were initially issued for an aggregate of C$100,000,000 (or C$25 per Series D Preferred Share).

Holders of Series D Preferred Shares who do not exercise their right to convert their Series D Preferred Shares into Series E Preferred Shares on the Conversion Date will retain their Series D Preferred Shares.

The dividend rate applicable to the Series D Preferred Shares for the 5-year period from and including March 31, 2024 to but excluding March 31, 2029, and the dividend rate applicable to the Series E Preferred Shares for the 3-month period from and including March 31, 2024 to but excluding June 30, 2024, will be determined on March 1, 2024 and announced by the Company by way of a news release on March 4, 2024.

Beneficial owners of Series D Preferred Shares who wish to exercise their conversion right during the conversion period, which runs from March 4, 2024 to March 18, 2024 at 5:00 p.m. (EST), should communicate as soon as possible with their broker or other nominee for more information. It is recommended that this be done well in advance of the deadline in order to provide the broker or other nominee time to complete the necessary steps. Any notices received after this deadline will not be valid.

The foregoing conversion rights are subject to the following conditions:

• i. If AQN determines that there would on the Conversion Date be fewer than 1,000,000 Series E Preferred Shares outstanding, after having taken into account all Series D Preferred Shares tendered for conversion into Series E Preferred Shares, then holders of Series D Preferred Shares will not be entitled to convert their Series D Preferred Shares into Series E Preferred Shares, and
• ii. alternatively, if AQN determines that there would remain outstanding on the Conversion Date fewer than 1,000,000 Series D Preferred Shares, after having taken into account all Series D Preferred Shares tendered for conversion into Series E Preferred Shares, then all remaining Series D Preferred Shares will automatically be converted into Series E Preferred Shares without the consent of the holders of Series D Preferred Shares, on a one-for-one basis, on the Conversion Date.

In either case, AQN will give written notice to that effect to the registered holder of Series D Preferred Shares no later than March 25, 2024.

AQN.PR.D was issued as a FixedReset, 5.00%+328, that commenced trading 2014-3-5 after being announced 2014-2-24. The extension was announced 2019-2-26 and the reset to 5.091% effective March 31, 2019 was announced 2019-3-1. I recommended against conversion and there was no conversion. The issue is tracked by HIMIPref™ but relegated to the Scraps-FixedReset (Discount) subindex on credit concerns.