Great-West Lifeco has announced:
the closing of its previously announced offering of 6,000,000 Non-Cumulative First Preferred Shares, Series M through a syndicate of underwriters co-led by BMO Capital Markets, RBC Capital Markets and Scotia Capital to raise gross proceeds of $150 million. The shares will be posted for trading on the Toronto Stock Exchange under the symbol “GWO.PR.M”.
The Series M Shares were priced at $25.00 per share and carry a 5.80% annual dividend. The net proceeds will be used by the Company to fund the redemption of the Non-Cumulative First Preferred Shares, Series D on March 31, 2010.
The issue traded 160,180 shares in a range of 24.50-70 before closing at 24.62-65, 50×11. It is 5.80% Straight announced February 23.
Vital statistics are:
| GWO.PR.M | Perpetual-Discount | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2040-03-04 Maturity Price : 24.41 Evaluated at bid price : 24.62 Bid-YTW : 5.92 % |
Comparables are:
| GWO PerpetualDiscount Comparables | |||
| Ticker | Dividend | Quote | Bid YTW |
| GWO.PR.I | 1.125 | 18.76-83 | 6.01% |
| GWO.PR.H | 1.2125 | 20.26-44 | 6.00% |
| GWO.PR.G | 1.30 | 21.40-45 | 6.09% |
| GWO.PR.L | 1.4125 | 23.55-68 | 6.00% |
| GWO.PR.M | 1.45 | 24.62-65 | 5.92% |
| GWO.PR.F | 1.475 | 24.64-80 | 5.98% |
Lynx-eyed Assiduous Readers will note that prices of comparators has dropped since the announcement, but yields have barely changed. These issues all went ex-Dividend on March 1; the Power Group likes to announce new straight issues shortly prior to the ex-Date so that comparators will be full of dividend and hence have a lower Current Yield.
It is worth noting that not only is GWO.PR.M still expensive when priced as a perpetual annuity, but also that there is basically no allowance for Implied Volatility in the group prices – which makes it more expensive still.
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[…] has been almost two years since the last Straight offering, which was GWO.PR.M, listed on 2010-3-4. Mind you, the market doesn’t seem too thrilled – comparable issues have dropped […]