Emera Incorporated has announced:
that 2,135,364 of its 6,000,000 issued and outstanding Cumulative 5-Year Rate Reset First Preferred Shares, Series A (the “Series A Shares”) were tendered for conversion, on a one-for-one basis into Cumulative Floating Rate First Preferred Shares, Series B (the “Series B Shares”). As a result of the conversion, Emera has 3,864,636 Series A Shares and 2,135,364 Series B Shares issued and outstanding. The Series A Shares will continue to be listed on the Toronto Stock Exchange (TSX) under the symbol EMA.PR.A. The Series B Shares will begin trading on the TSX today under the symbol EMA.PR.B.
EMA.PR.A is a FixedReset with an Issue Reset Spread of 184bp that has just reset at 2.555%. EMA.PR.B is its FloatingReset, paying three month bills +184bp. The next interconversion date is 2020-8-15. I had previously recommended that holders of EMA.PR.A continue to hold the issue as I expect that EMA.PR.B will trade – at least initially – at lower levels than EMA.PR.A.
EMA.PR.B traded zero shares today (consolidated exchanges) and closed with a quote of 12.13-18.00, 1×5. Zero activity on the first day is normal; retail holders who converted won’t see the new shares in their account until tomorrow and it might also be expected that those who just made the decision to convert are less likely than otherwise to want to sell two weeks later.
EMA.PR.B will be tracked by HIMIPref™ and will be assigned to the Scraps index on credit concerns. Vital statistics are:
| EMA.PR.B | FloatingReset | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2045-08-17 Maturity Price : 12.13 Evaluated at bid price : 12.13 Bid-YTW : 4.58 % |
Are the credit concerns further impacted by today’s announcement that Emera to Acquire TECO Energy in US$10.4 Billion Transaction? (see http://www.businesswire.com/news/home/20150904005751/en/ for the press release)