PrefBlog

EMA wants to issue new preferreds; Barry Critchley points out they’ll have to pay up relative to their last round:

This week Emera took another step on the way to rounding up the cash need to fund the US$10.4 billion acquisition of TECO Energy.

Emera, which expects to close the acquisition by mid-year, raised $544 million from the sale of most of its stake in Algonquin Power & Utilities Corp. After the share sale, Emera — which is expected to receive the second instalment of a $2.185 billion offering of convertible debentures when the TECO deal gets the final green light — will own about five per cent of Algonquin.

But lots of capital still needs to be raised — even if it seems that all the common equity has been obtained. In a presentation unveiled this week, Emera indicated it is seeking between US$3.4 billion and US$3.8 billion of debt (the US$10.4 billion acquisition cost includes US$3.9 billion of assumed debt). It is also after US$0.8 billion to US$1.2 billion in either preferred equity or hybrid securities.
…
Emera last issued rate reset preferred shares in May 2014 when it raised $200 million at a yield of 4.25 per cent. At 4.25 per cent, the coupon represented a spread of 263 basis points above comparable five-year Canada bonds.

Next time out Emera will find that the preferred share market has changed in two ways.

IGM Financial has bought a piece of a robo-advisor:

IGM Financial Inc. has closed a $50 million (U.S.) investment in Personal Capital Corporation, a market-leading digital wealth advisor based in the U.S., with an agreement to invest an additional $25 million (U.S.) in the next year for a total of $75 million (U.S.). This would result in an initial 10% ownership stake increasing to 15% within 12 months, with the remaining interest owned by Personal Capital’s management team and existing investors.

Personal Capital’s approach to wealth management – combining dedicated financial advisors with innovative customer-facing technology – is unique in the industry. Led by a market-leading and experienced team with a long track record in financial services, Personal Capital has been growing rapidly in the mass affluent and high net worth investor segments of the market, offering a unique, compelling and valuable proposition for its clients.

This is kind of interesting, since IGM’s parent, PWF, already has a piece of WealthSimple, as discussed April 9, 2015.

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