PrefBlog

Emera Incorporated has announced (although not yet on their website):

that it will issue 8,000,000 Cumulative Minimum Rate Reset First Preferred Shares, Series J (the “Series J Preferred Shares”) at a price of $25.00 per share and at an initial annual dividend rate of 4.25 per cent, for aggregate gross proceeds of $200 million on a bought deal basis to a syndicate of underwriters in Canada led by Scotiabank and RBC Capital Markets. Emera has granted to the underwriters an option, exercisable at any time up to two business days prior to the closing of the offering, to purchase up to an additional 2,000,000 Series J Preferred Shares at a price of $25.00 per share (the “Underwriters’ Option”). If the Underwriters’ Option is exercised in full, the aggregate gross proceeds to Emera will be $250 million.

The holders of the Series J Preferred Shares will be entitled to receive fixed cumulative preferential cash dividends at an annual rate of $1.0625 per share, payable quarterly, as and when declared by the board of directors of Emera, yielding 4.25 per cent per annum, for the initial period ending on May 15, 2026. The first of such dividends, if declared, shall be payable on August 15, 2021, and shall be $0.38134 per Series J Preferred Share, based on the anticipated closing of the offering on April 6, 2021. The dividend rate will be reset on May 15, 2026 and every five years thereafter at a rate equal to the sum of the then five-year Government of Canada bond yield plus 3.28 per cent, provided that, in any event, such rate shall not be less than 4.25 per cent per annum. The Series J Preferred Shares are redeemable by Emera, at its option, on May 15, 2026 and on May 15 of every fifth year thereafter.

The holders of Series J Preferred Shares will have the right to convert their shares into Cumulative Floating Rate First Preferred Shares, Series K (the “Series K Preferred Shares”), subject to certain conditions, on May 15, 2026 and on May 15 of every fifth year thereafter. The holders of the Series K Preferred Shares will be entitled to receive quarterly floating rate cumulative preferential cash dividends, as and when declared by the board of directors of Emera, at a rate equal to the sum of the 90-day Government of Canada treasury bill rate at such time plus 3.28 per cent.

The offering is subject to the receipt of all necessary regulatory and stock exchange approvals. The net proceeds of the offering will be used for general corporate purposes.

The Series J Preferred Shares will be offered to the public in Canada by way of prospectus supplement to Emera’s short form base shelf prospectus dated March 12, 2021.

This is the first new FixedReset since CM FixedReset, 5.15%+362, NVCC from May 2019, so that’s pretty exciting!

Standard & Poor’s rates it P-3(high):

S&P Global Ratings today assigned its ‘BB+’ on the global scale and ‘P-3 (High)’ on the Canada National Preferred Share Scale issue-level ratings to Halifax, N.S.-based utility holding company Emera Inc.’s (Emera) C$200 million series J cumulative minimum rate reset first preferred shares, with an option of up to C$250 million. Emera intends to use the net proceeds from these preferred shares for general corporate purposes.

We expect to assign intermediate equity credit (50% equity) to the shares based on the proposed terms. Our intermediate equity treatment is largely premised on the instrument’s permanence, subordination, and deferability features, as defined under our criteria for hybrid securities.

The series J first preferred stock is perpetual, with no maturity date and no incentive to redeem the issue for a long-dated period, meeting our standards for permanence. In addition, the dividend payments are deferrable, fulfilling the deferability element in our criteria. Furthermore, the instrument is subordinated to all existing and future senior debt obligations, satisfying our condition for subordination.

For these reasons and based on our review of the proposed terms of these instruments, we rate the securities two notches below our ‘BBB’ issuer credit rating on Emera at ‘BB+’ on the global scale or ‘P-3 (High)’ under the Canada National Preferred Share Scale Ratings. For our most recent issuer credit rating rationale, see the research update on Emera published on March 24, 2020.

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

Update, 2021-10-03: This issue trades as EMA.PR.J

Partners Value Split Corp. has announced:

that it has entered into an agreement to sell 4,000,000 Class AA Preferred Shares, Series 12 (the “Series 12 Preferred Shares”) to a syndicate of underwriters led by Scotiabank, BMO Capital Markets, CIBC Capital Markets, RBC Capital Markets and TD Securities Inc. on a bought deal basis.

The Series 12 Preferred Shares will be issued at a price of $25.00 per share, for gross proceeds of $100,000,000. The Series 12 Preferred Shares will carry a fixed coupon of 4.40% and will have a final maturity of February 29, 2028. The Series 12 Preferred Shares are expected to receive a provisional rating of Pfd-2 (low) from DBRS Limited. The net proceeds of the offering will be used to partially fund the redemption of the Company’s Class AA Preferred Shares, Series 7.

The Company has granted the underwriters an over-allotment option to purchase up to an additional 600,000 Series 12 Preferred Shares at the same offering price, exercisable in whole or part at any time for a period of up to 30 days following closing of the offering, which, if exercised in full, would increase the gross offering size to $115,000,000. Closing of the offering is expected to occur on or about April 12, 2021.

The Company owns a portfolio consisting of approximately 119,611,000 Class A Limited Voting Shares of Brookfield Asset Management Inc. (the “Brookfield Shares”) which is expected to yield quarterly dividends that are sufficient to fund quarterly fixed cumulative preferential dividends for the holders of the Company’s preferred shares and to enable the holders of the Company’s capital shares to participate in any capital appreciation of the Brookfield Shares. Brookfield Asset Management Inc. (“BAM”) is a leading global alternative asset manager with approximately US$600 billion of assets under management across real estate, infrastructure, renewable power, private equity and credit. BAM owns and operates long-life assets and businesses, many of which form the backbone of the global economy. Utilizing its global reach, access to large-scale capital and operational expertise, BAM offers a range of alternative investment products to investors around the world—including public and private pension plans, endowments and foundations, sovereign wealth funds, financial institutions, insurance companies and private wealth investors. BAM is listed on the New York Stock Exchange and Toronto Stock Exchange under the symbol BAM and BAM.A respectively.

Given that the directors and officers of PVS:

• Frank N.C. Lochan
• James L.R. Kelly
• Ralph J. Zarboni
• Brian D. Lawson
• Leslie Yuen
• Bryan Sinclair
• Loretta M. Corso

continue to be a useless pack of bozos, this information is not yet available on the company website.

Update, 2021-3-22: Wonder of wonders, there is actually an update to this press release posted on their website! Partners Value Split Corp. has announced:

that as a result of strong investor demand for its previously announced offering, it has agreed to increase the size of the offering and sell 6,000,000 Class AA Preferred Shares, Series 12 (the “Series 12 Preferred Shares”) to a syndicate of underwriters led by Scotiabank, BMO Capital Markets, CIBC Capital Markets, RBC Capital Markets and TD Securities Inc. on a bought deal basis.

The Series 12 Preferred Shares will be issued at a price of $25.00 per share, for gross proceeds of $150,000,000. The Series 12 Preferred Shares will carry a fixed coupon of 4.40% and will have a final maturity of February 29, 2028. The Series 12 Preferred Shares are expected to receive a provisional rating of Pfd-2 (low) from DBRS Limited. The net proceeds of the offering will be used to fund the redemption of the Company’s Class AA Preferred Shares, Series 7.

The Company has granted the underwriters an over-allotment option to purchase up to an additional 900,000 Series 12 Preferred Shares at the same offering price, exercisable in whole or part at any time for a period of up to 30 days following closing of the offering, which, if exercised in full, would increase the gross offering size to $172,500,000. Closing of the offering is expected to occur on or about April 12, 2021.