BCE.PR.R to Reset at 207% of GOC-5

BCE Inc. has announced:

As of December 1, 2010, the Series R Preferred Shares will, should they remain outstanding, pay, on a quarterly basis, as and when declared by the Board of Directors of BCE Inc., a fixed cash dividend for the following five years that will be based on a fixed rate equal to the product of: (a) the yield to maturity compounded semi-annually (the “Government of Canada Yield”), computed on November 10, 2010 by two investment dealers appointed by BCE Inc., that would be carried by Government of Canada bonds with a 5-year maturity, multiplied by (b) the “Selected Percentage Rate”. The “Selected Percentage Rate” determined by BCE Inc. is 207%. The annual dividend rate applicable to the Series R Preferred Shares will be published on November 11, 2010 in the national edition of the Globe and Mail, the Montreal Gazette and La Presse and will be posted on the BCE Inc. website at www.bce.ca.

These shares are interconvertible to and from BCE.PR.Q, a ratchet rate issue which does not currently exist:

Beginning on October 18, 2010 and ending on November 17, 2010, holders of Series R Preferred Shares will have the right to choose one of the following options with regards to their shares:
1. To retain any or all of their Series R Preferred Shares and continue to receive a fixed quarterly dividend; or
2. To convert, on a one-for-one basis, any or all of their Series R Preferred Shares into BCE Inc. Cumulative Redeemable First Preferred Shares, Series Q (the “Series Q Preferred Shares”) and receive a floating monthly dividend.

Those trying to decide which way to jump may be interested in the Pairs Equivalency Calculator I published earlier this year. I will post again once the final rate is known.

BCE.PR.R, et al., were last mentioned on PrefBlog when BCE bought CTV. BCE.PR.R is tracked by HIMIPref™, but is relegated to the Scraps index on credit concerns.

One Response to “BCE.PR.R to Reset at 207% of GOC-5”

  1. […] announcement of the Selected Percentage Rate was reported on PrefBlog. Data for the Pairs Equivalency Calculator have been updated, but as yet the RatchetRate complement […]

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