BCE.PR.T Reset Rate Announced

BCE has announced that the dividend rate on BCE.PR.T will be reset to 4.502% (or $1.1255 p.a. on a $25 par value share).

This issue is not currently outstanding, but is being offered in exchange for BCE.PR.S, a ratchet-rate issue.

BCE is currently contemplating reorganizing into an income trust and in connection with this is offering to purchase all outstanding preferred shares. They are offering $25.60 for BCE.PR.S and $25.75 for BCE.PR.T.

 BCE.PR.S closed on October 11 at $25.10-15. From a strictly yield-curve-comparative perspective, this issue is considered expensive by HIMIPref™ but, of course, it’s awfully tempting to buy all one can at these levels, convert to BCE.PR.T and await execution of all of BCE’s plans. Given that all this is event-driven, however, I will not state my views publicly at this time.

2 Responses to “BCE.PR.T Reset Rate Announced”

  1. […] BCE.PR.T has commenced trading on the TSX today, quoted at $24.75-25, 5×5, zero volume. This issue will be added to the HIMIPref™ database shortly. As previously noted, the BCE.PR.T will pay $1.1255 per $25 p.v. share. There is an offer for both issues that is conditional upon the BCE / Bell Canada Income Trust Conversion proceeding. […]

  2. […] But … what I can’t understand is: why would anybody hold the Zs? Even if they’re unable to buy sufficient Ys to replace them? BCE can put an extremely low rate on the “Z” dividend payout commencing December 1, 2007, all but forcing conversion. Surely nobody seriously believes that BCE will leave the rate as it was set five years ago, at 5.319%. In BCE’s last ratchet/reset, the BCE.PR.S / BCE.PR.T the rate was reset to 4.502% … and I certainly wouldn’t bet on this very generous payout being offered again on the Y/Z reset date. […]

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