PrefBlog

AltaGas Ltd. has announced:

that 2,488,780 of its 8,000,000 Cumulative Redeemable Five-Year Fixed Rate Reset Preferred Shares, Series A (“Series A Preferred Shares”) (TSX: ALA.PR.A) were tendered for conversion into Cumulative Floating Rate Preferred Shares, Series B (the “Series B Preferred Shares”). As a result of the conversion AltaGas has 5,511,220 Series A Preferred Shares and 2,488,780 Series B Preferred Shares issued and outstanding. The Series A Preferred Shares will continue to be listed on the Toronto Stock Exchange (TSX) under the symbol ALA.PR.A. The Series B Preferred Shares will begin trading on the TSX today under the symbol ALA.PR.B.

The Series A Preferred Shares will continue to pay on a quarterly basis, for the five-year period beginning on September 30, 2015, as and when declared by the Board of Directors of AltaGas, a fixed dividend based on an annual fixed dividend rate of 3.38 percent.

The Series B Preferred Shares will pay a floating quarterly dividend for the five-year period beginning on September 30, 2015, as and when declared by the Board of Directors of AltaGas. The floating quarterly dividend rate for the Series B Preferred Shares for the first quarterly floating rate period (being the period from September 30, 2015 to but excluding December 31, 2015) is 3.04 percent and will be reset every quarter.

For more information on the terms of, and risks associated with an investment in, the Series A Preferred Shares and the Series B Preferred Shares, please see the prospectus supplement dated August 11, 2010 which is available on www.sedar.com.

ALA.PR.A is a FixedReset, currently 3.38%+266. ALA.PR.B is its Strong Pair, a FloatingReset paying 266bp over three month bills, reset quarterly. Both issues will be tracked by HIMIPref™, both relegated to the Scraps index on credit concerns.

The conversion rate was 31%, after my recommendation not to convert.

Vital statistics are:

Surprisingly, there were actually five trades today, totalling 600 shares – it’s very rare to see trades on the first day of a Floating Reset, since retail (typically) won’t be seeing the shares in their on-line accounts until reorg processes the entries in a batch after the close. But still, I wouldn’t take the quote of 15.50-89 all that seriously!

However:

The ALA.PR.A / ALA.PR.B Strong Pair predicts an average three-month bill rate of 0.81% over the next five years, well above the average for investment-grade pairs.

This entry was posted on Thursday, October 1st, 2015 at 2:52 am and is filed under Issue Comments. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.