BAM.PF.A Soft on Good Volume

Brookfield Asset Management has announced:

the completion of its previously announced Class A Preference Shares, Series 32 issue in the amount of CDN$300,000,000. The offering was underwritten by a syndicate led by RBC Dominion Securities Inc., CIBC World Markets Inc., Scotia Capital Inc. and TD Securities Inc.

Brookfield issued 12,000,000 Series 32 Shares at a price of CDN$25.00 per share, for aggregate gross proceeds of CDN$300,000,000. Holders of the Series 32 Shares will be entitled to receive a cumulative quarterly fixed dividend yielding 4.50% annually for the initial period ending September 30, 2018. Thereafter, the dividend rate will be reset every five years at a rate equal to the 5-year Government of Canada bond yield plus 2.90%. The Series 32 Shares will commence trading on the Toronto Stock Exchange this morning under the ticker symbol BAM.PF.A.

Brookfield intends to use the net proceeds of the issue of Series 32 Shares to redeem its Class A Preference Shares, Series 10 and for general corporate purposes.

Doubtless you are wondering: What’s all this “.PF” guff? I wondered too:

In response to your inquiry – Brookfield Asset Management has issued so many pref share series that they had to use the “PF.A” extension. The Company could have re-used some old extensions for series that are no longer listed but decided to use the new extension to prevent confusion with the old series.

I have a vague recollection that at one time there was an explicit rule at the Toronto Exchange that you couldn’t have a “.PR” extension unless staff had determined to its satisfaction that the issue was, in fact, preferred over common. Now, while I wish to make it clear that there is no doubt whatsoever in my mind that these shares are ‘preferred’, I’m just wondering if the same policy or rule is still in place.

Now, as far as I’m concerned, it’s not really a big deal. When I buy something, I like to know what I’m buying and I don’t rely on the TMX’s “.PR.” extension, or the IOSCO “(sf)” or “(hyb)” suffix on credit ratings to give me an excuse not to look at the prospectus. But … if I am remembering correctly, there was at one time a formal commitment from the Exchange that they wouldn’t just go around slapping a “.PR” extension on just anything. I don’t know if this still applies, or if it now applies to the brand-new “.PF” extension. I can’t find anything relevant in the Company Handbook or TMX Rulebook.

To tell you the truth, I’m rather annoyed by this. I’m tracking 265 preferred shares. I’m sure there are at least 35 more that are too small for me, or otherwise not tracked. So that’s at least 300 preferred share issues trading on the Exchange. Until yesterday, every single one had a “.PR” extension. So they add a new extension – that’s OK, times change, I can deal with that. But does it occur to anybody – the company, the Exchange, anybody at all, to make a note of that and add a brief explanation? Anything at all, just to let the ultimate customers – that’s you and me, buddies – know what’s going on? Hell no, this is Canada. Fuck the customer, we’re in a meeting.

BAM.PF.A is a FixedReset, 4.50%+290, announced March 5. The issue will be tracked by HIMIPref™ and assigned to the FixedReset index. The issue is rated Pfd-2(low) by DBRS.

BAM.PF.A traded 487,690 shares today in a range of 24.90-05 before closing at 24.85-90, 50×4. Vital statistics are:

Maturity Type : Limit Maturity
Maturity Date : 2042-03-13
Maturity Price : 23.04
Evaluated at bid price : 24.85
Bid-YTW : 4.34 %

10 Responses to “BAM.PF.A Soft on Good Volume”

  1. […] PrefBlog Canadian Preferred Shares – Data and Discussion « BAM.PF.A Soft on Good Volume […]

  2. GAndreone says:

    It will be interesting to see how Yahoo! handles the extension since it uses only a single P to indicate pref shares.

  3. prefhound says:

    Considering that Yahoo! hasn’t figured out that GWO.PR.P and PWF.PR.R have actually traded since their IPO a few weeks ago, I would not be too confident they will even register a .PF extension, although is not impossible.

    While we are on the topic, does anybody know why Yahoo! has no history for at least half the pref shares, but does have history for others (usually older ones). Had the TMX decided not to share the info for free after a certain date, but grandfathered older issues???

  4. jiHymas says:

    You’ve got me!

    I’m just relieved that they finally added CF.PR.A to their database – there was a long period after issue when queries would come up blank, then it worked fine for a while, then they forgot it again … now it’s on-line again. For how long, I don’t know!

    But what can you say to a free service? “I want my money back”?

  5. […] Recent new issue. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2042-03-16 Maturity Price : 23.05 Evaluated at bid price : 24.87 Bid-YTW : 4.33 % […]

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  7. […] Recent new issue. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2042-03-20 Maturity Price : 23.07 Evaluated at bid price : 24.93 Bid-YTW : 4.46 % […]

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