Great-West Lifeco Inc. has announced:
that it does not intend to exercise its right to redeem its outstanding Non-Cumulative 5-Year Rate Reset First Preferred Shares, Series N (the “Series N Shares”) on December 31, 2015. As a result, subject to certain conditions, the holders of the Series N Shares have the right to convert all or any of their Series N Shares into Non-Cumulative Floating Rate First Preferred Shares, Series O (the “Series O Shares”) on a one-for-one basis on December 31, 2015. A formal notice of the right to convert Series N Shares into Series O Shares will be sent to the registered holder of the Series N Shares in accordance with the rights, privileges, restrictions and conditions attached to the Series N Shares. Holders of Series N Shares who do not exercise their right to convert their Series N Shares into Series O Shares on such date will retain their Series N Shares.
The foregoing conversion right is subject to the conditions that: (i) if Lifeco determines that if, following such conversions, there would be less than one million Series O Shares outstanding on December 31, 2015, no Series N Shares may be converted into Series O Shares, and (ii) alternatively, if Lifeco determines that if, following such conversions, there would be less than one million Series N Shares outstanding on December 31, 2015, then all remaining Series N Shares will automatically be converted into Series O Shares on a one-for-one basis on December 31, 2015. In either case, Lifeco will give written notice to that effect to any registered holder affected by the preceding conditions on or before Thursday, December 24, 2015.
The dividend rate applicable to the Series N Shares for the five-year period commencing on December 31, 2015 and ending on December 30, 2020, and the dividend rate applicable to the Series O Shares for the three-month period commencing on December 31, 2015 and ending on March 30, 2016, will be determined on Tuesday, December 1, 2015 and written notice thereof will be given to the registered holder of the Series N Shares on that day.
Beneficial owners of Series N Shares who wish to have their Series N Shares converted into Series O Shares should communicate as soon as possible with their broker or other nominee to ensure their instructions are followed so that the registered holder of the Series N Shares can meet the deadline to exercise such conversion right, which is 5:00 p.m. (ET) on Wednesday, December 16, 2015.
Lifeco may redeem the Series N Shares, in whole or in part, on December 31, 2020 and on December 31 every five years thereafter for $25.00 per share plus declared and unpaid dividends and may redeem the Series O Shares, in whole or in part, after December 31, 2015 for $25.50 per share plus declared and unpaid dividends, unless such Series O Shares are redeemed on December 31, 2020 or on December 31 every five years thereafter, in which case the redemption price will be $25.00 per share plus declared and unpaid dividends.
No surprises here, since GWO.PR.N is a FixedReset, 3.65%+130, which commenced trading 2010-11-23 after being announced 2010-11-15. The issue was met with disfavour and there was an inventory clearance sale closing 2010-12-3.
Note that since the issue is issued by an insurance holding company and is not convertible into common at the option of the issuer, I consider it to have a “Deemed Maturity” 2025-1-31 (this date may change in the future). This is due to my belief that OSFI will eventually extend the Non-Viability Contingent Capital (NVCC) rules to insurers and insurance holding companies. There is a brief explanation of this on the PrefLetter website (under the heading “DeemedRetractibles”) and with more detailed argument and progress reports on international negotiations in every edition of PrefLetter.
I will note that the market does not share my views regarding future application of the NVCC rules insurers and insurance issues trade very similarly to perpetuals.
This entry was posted on Sunday, November 8th, 2015 at 2:33 am and is filed under Issue Comments. You can follow any responses to this entry through the RSS 2.0 feed.
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GWO.PR.N To Be Extended
Great-West Lifeco Inc. has announced:
No surprises here, since GWO.PR.N is a FixedReset, 3.65%+130, which commenced trading 2010-11-23 after being announced 2010-11-15. The issue was met with disfavour and there was an inventory clearance sale closing 2010-12-3.
Note that since the issue is issued by an insurance holding company and is not convertible into common at the option of the issuer, I consider it to have a “Deemed Maturity” 2025-1-31 (this date may change in the future). This is due to my belief that OSFI will eventually extend the Non-Viability Contingent Capital (NVCC) rules to insurers and insurance holding companies. There is a brief explanation of this on the PrefLetter website (under the heading “DeemedRetractibles”) and with more detailed argument and progress reports on international negotiations in every edition of PrefLetter.
I will note that the market does not share my views regarding future application of the NVCC rules insurers and insurance issues trade very similarly to perpetuals.
This entry was posted on Sunday, November 8th, 2015 at 2:33 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.