PrefBlog

DBRS has announced that it:

confirmed the Cumulative Preferred Shares rating of Canaccord Genuity Group Inc.’s (CG or the Company) at Pfd-4 (high) and changed the trend to Stable from Negative. The Company has a Support Assessment of SA3, which implies no expected systemic support.

KEY RATING CONSIDERATIONS
The trend change to Stable reflects DBRS Morningstar’s view that the considerable uncertainties facing financial institutions, particularly those with more limited business models, caused by the Coronavirus Disease (COVID-19) pandemic have begun to abate. CG is a Canadian-based financial institution with $6.1 billion in assets as of Q3 2021, operating in the U.S., the United Kingdom (UK), and Australia, with a focus on capital markets activities and wealth management. The Company reported 9M 2021 revenue of $1.3 billion, up 44% from 9M 2020 earnings of $119 million, double the earnings of the previous year. CG benefited from the businesses it had acquired in 2019, the year prior to the pandemic, namely its U.S. capital markets business as well as its Australian wealth management operations.

In confirming the rating, DBRS Morningstar recognizes CG’s solid niche franchise, with a growing wealth management presence across various geographies, while remaining cognizant of the Company’s increased leverage following its recent wealth management and other acquisitions. The Company has made acquisitions in Canada, the U.S., the UK, and Australia, and although it has now integrated these businesses it will need to continue to leverage the larger platform to further enhance efficiencies. The Company expects the combined businesses’ success and efficiencies should drive profits and enable it to reduce leverage over time. However, DBRS Morningstar remains cognizant that the continued impact of the coronavirus-related downturns could, over the short term, create earnings volatility and impede the Company’s ability to comfortably meet contractual payments.

RATING DRIVERS
Although DBRS Morningstar considers CG as being well placed in its current rating category, over the longer term, further franchise diversification that contributes to sustained and improving earnings across segments while lowering leverage would result in an upgrade. Conversely, weakened credit fundamentals or inconsistent earnings would result in a rating downgrade. Furthermore, given CG’s high reliance on market confidence to support its franchise, any significant operational or reputational issues would likely negatively affect the rating, as would material negative stresses to the Company’s liquidity or funding profiles.

Affected issues are CF.PR.A and CF.PR.C.

The Bank of Nova Scotia has announced:

its intention to redeem all outstanding Non-cumulative 5-Year Rate Reset Preferred Shares Series 34 (Non-Viability Contingent Capital (NVCC)) (“Series 34 Shares”) of Scotiabank on April 26, 2021 at a price equal to $25.00 per share together with declared and unpaid dividends to the Redemption Date (the “Redemption Price”). Formal notice will be issued to the shareholders in accordance with the share conditions.

The redemption has been approved by the Office of the Superintendent of Financial Institutions and will be financed out of the general funds of Scotiabank. This redemption is part of the Bank’s ongoing management of its Tier 1 capital.

On February 23, 2021, the Board of Directors of Scotiabank declared quarterly dividends of $0.343750 per Series 34 Share. This will be the final dividend on the Series 34 Shares and will be paid on April 26, 2021, to shareholders of record at the close of business on April 6, 2021, as previously announced. Subsequent to this final dividend payment, the Series 34 Shares will cease to be entitled to dividends.

BNS.PR.E is a FixedReset 5.50%+451, NVCC-compliant issue that commenced trading 2015-12-17 after being announced 2015-12-8.

Thanks to Assiduous Reader CanSiamCyp for ensuring I didn’t miss this.

TC Energy Corporation has announced:

that TransCanada Trust (the Trust), a wholly-owned financing trust subsidiary of TransCanada PipeLines Limited (TCPL), has closed an offering of $500 million of 4.20% subordinated Trust Notes, Series 2021-A due March 4, 2081 (Trust Notes), guaranteed on a subordinated basis by TCPL. The Trust Notes were offered through a syndicate of underwriters, co-led by BMO Capital Markets and Scotiabank, under the Trust’s short form base shelf prospectus dated February 26, 2021, as supplemented by a prospectus supplement dated March 1, 2021.

The Company intends to use the proceeds to redeem its issued and outstanding Cumulative Redeemable Minimum Rate Reset First Preferred Shares, Series 13 (TSX:TRP.PR.J) pursuant to their terms, and pending such redemption, to reduce short-term indebtedness as well as for general corporate purposes.

Well, 60-year subordinated debt at 4.20% interest sure beats the 5.50% dividend minimum payable on TRP.PR.J!

TRP.PR.J is a FixedReset, 5.50%+469M550, that commenced trading 2016-4-20 after being announced 2016-4-13.

Thanks to Assiduous Reader CanSiamCyp for ensuring I didn’t miss this.