FTN.PR.A Dividend Rate is 5.50% until December 1, 2019

It will be recalled that FTN.PR.A increased its dividend to 5.50% in September, 1997, effective for their fiscal year beginning December 1, 2017.

I am now advised by their Investor Relations department that:

The Company may reset the Preferred share rate with each fiscal year. Any change to the current rate must be announced no later than September 30th each year.

The Preferred share rate is subject to a minimum, established with any five year termination date extensions. The current minimum rate is 5.25% annually up until the December 1, 2020 termination date

The latest Annual Information Form (AIF) states that at a meeting held on May 14, 2014, shareholders gave their approval to allow the Company to have the “right” to establish the rate of dividends to be paid on the Preferred shares annually, commencing December 1, 2015.

The AIF further states the Company “may” determine the rate each fiscal year, thus a news release is only required if a change is made.

Therefore to clarify, the annual rate of 5.5% announced on September 29, 2017 (effective December 1, 2017), remains in place unless announced otherwise by a news release.

We do apologize for any confusion.

Well, it seems a little slap-dash to me. Their announcement of the boost specified an end-date and nothing about ‘until further notice’; none of their many press releases announce the decision.

But there you have it, they’ll continue to pay 5.50% at least until 2019-12-1. After that, nobody knows, but there is a minimum rate of 5.25% effective until maturity, 2020-12-1.

One Response to “FTN.PR.A Dividend Rate is 5.50% until December 1, 2019”

  1. newbiepref says:

    What is still unclear to me is why did they increased the dividend in the first place?

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