What's Up With BPO.PR.L?

What’s up with BPO.PR.L? This issue commenced trading 2009-9-24 after being announced 2009-8-21 and is a FixedReset, 6.75%+417, with many market participants believing that it will be called at the first opportunity, 2014-9-30.

But I don’t see anything happening! According to the prospectus (emphasis added):

The Series L Shares will not be redeemable by the Corporation prior to September 30, 2014. On September 30, 2014 and on September 30 every five years thereafter (or, if such date is not a business day, the immediately following business day), and subject to certain other restrictions set out in “Description of the Series L Shares — Restrictions on Dividends and Retirement and Issue of Shares”, the Corporation may, at its option, on at least 30 days and not more than 60 days prior written notice, redeem all or from time to time any part of the outstanding Series L Shares by payment in cash of a per share sum equal to $25.00, in each case plus an amount equal to the Accrued Amount (less any tax required to be deducted and withheld by the Corporation).

OK, 30 days’ notice required. What about if they let it reset?

“Fixed Rate Calculation Date” means, for any Subsequent Fixed Rate Period, the 30th day prior to the first day of
such Subsequent Fixed Rate Period.
…
“Subsequent Fixed Rate Period” means for the initial Subsequent Fixed Rate Period, the period commencing on October 1, 2014 and ending on and including September 30, 2019 and for each succeeding Subsequent Fixed Rate Period, the period commencing on the day immediately following the end of the immediately preceding Subsequent Fixed Rate Period and ending on and including September 30 in the fifth year thereafter.
…
The Annual Fixed Dividend Rate applicable to a Subsequent Fixed Rate Period will be determined by the Corporation on the Fixed Rate Calculation Date. Such determination will, in the absence of manifest error, be final and binding upon the Corporation and upon all holders of Series L Shares. The Corporation will, on the Fixed Rate Calculation Date, give written notice of the Annual Fixed Dividend Rate for the ensuing Subsequent Fixed Rate Period to the registered holders of the then outstanding Series L Shares.

OK, 30 days’ notice required.

But, according to my calculations, there are now less than 30 days left until September 30 or October 1 (as the case may be) and there has not been a press release issued by BPO on their press release page. There was only an incidental reference in the Plan of Arrangement Proxy Circular:

Treatment of BPO Preferred Shares and BPO Senior Notes

Except for the redemption of the BPO Class A Preferred Shares and the treatment of the BPO Convertible Preferred Shares described above, there are no changes being made to the BPO Preferred Shares, which will not be affected by the Arrangement and will continue to be listed on the TSX.

In addition, as of December 31, 2013, BPO had $187 million principal amount of BPO 4.30% Notes outstanding and $140 million principal amount of BPO 4.00% Notes outstanding. The BPO Senior Notes will remain outstanding following the consummation of the Arrangement and will not be affected.

There’s no dedicated press release on the Brookfield Property Partners press release page.

Preferred shares are not mentioned in the Brookfield Property Partners earnings release.

There’s a note in the Brookfield Office Properties financial statements (available on SEDAR) that:

On August 12, 2014, the Board of Directors of the company declared dividends payable for the Class A, Class AA Series E and Class AAA Series L, N, P, R, T, V, W, X, Y and Z preferred shares.

… but nothing about a redemption. A very promising entry on SEDAR regarding “Security Holders Documents – English” dated August 27, 2014 turns out to be simply a “Restated Certificate of Incorporation”, which describes Series L in loving detail, but makes no mention of an actual call for redemption.

I have sent the following eMail to the official investor inquiries guy:

Dear Mr. Cherry,

It is my understanding that the captioned series of shares is due to either reset or be redeemed on September 30, 2014, but that in either case notices will be made regarding the disposition of these shares thirty days prior to the applicable date.

I have been unable to find any such notices on your website.

Can you please tell me whether the captioned series will be redeemed or reset?

Sincerely,

So we shall see what we shall see! Implied Volatility theory suggests that there will be a very nice jump in price should the BPO.PR.L shares be reset:

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