PrefBlog

TC Energy Corporation has announced:

that it does not intend to exercise its right to redeem its Cumulative Redeemable First Preferred Shares, Series 7 (Series 7 Shares) on April 30, 2024. As a result, subject to certain conditions, the holders of Series 7 Shares have the right to choose one of the following options regarding their shares:

• 1. to retain any or all of their Series 7 Shares and continue to receive a fixed rate quarterly dividend, or
• 2. to convert, on a one-for-one basis, any or all of their Series 7 Shares into Cumulative Redeemable First Preferred Shares, Series 8 (Series 8 Shares) of TC Energy and receive a floating rate quarterly dividend.

Should holders of Series 7 Shares choose to retain their shares, such shareholders will receive the new annual fixed dividend rate applicable to the Series 7 Shares of 5.985 per cent for the five-year period commencing April 30, 2024 to, but excluding, April 30, 2029.

Should holders of Series 7 Shares choose to convert their shares to Series 8 Shares, holders of Series 8 Shares will receive the floating quarterly dividend rate applicable to the Series 8 Shares of 7.379 per cent for the first quarterly floating rate period commencing April 30, 2024 to, but excluding, July 30, 2024. The floating quarterly dividend rate will be reset every quarter.

Beneficial owners of Series 7 Shares who want to exercise their right of conversion should communicate as soon as possible with their broker or other nominee and ensure that they follow their instructions to meet the deadline to exercise such right, which is 5 p.m. (EDT) on April 15, 2024. Any notices received after this deadline will not be valid. It is recommended that this be done well in advance of the deadline to provide the broker or other nominee with time to complete the necessary steps.

Beneficial owners of Series 7 Shares who do not exercise their conversion right through their broker or other nominee by the deadline will retain their Series 7 Shares and receive the new annual fixed dividend rate applicable to the Series 7 Shares, subject to the conditions stated below.

The foregoing conversions are subject to the conditions that: (i) if TC Energy determines that there would be less than one million Series 7 Shares outstanding after April 30, 2024, then all remaining Series 7 Shares will automatically be converted into Series 8 Shares on a one-for-one basis on April 30, 2024 and (ii) alternatively, if TC Energy determines that there would be less than one million Series 8 Shares outstanding after April 30, 2024, no Series 7 Shares will be converted into Series 8 Shares. In either case, TC Energy will issue a news release to that effect no later than April 23, 2024.

Holders of Series 7 Shares and Series 8 Shares will have the opportunity to convert their shares again on April 30, 2029 and every fifth year thereafter as long as the shares remain outstanding. For more information on the terms of, and risks associated with an investment in the Series 7 Shares and the Series 8 Shares, please see the Corporation’s prospectus supplement dated Feb. 25, 2013 which is available on sedarplus.ca or on our website.

TRP.PR.D was issued as a FixedReset, 4.00%+238, that commenced trading 2013-3-4 after being announced 2013-2-25. The extension was announced 2019-3-15. The issue reset at 3.903% effective April 30, 2019. I recommended against conversion and there was no conversion. TRP.PR.D is tracked by HIMIPref™ and assigned to the FixedReset (Discount) subindex.

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