PrefBlog

Equitable Group Inc. has announced (on September 3):

the dividend rates applicable to the non-cumulative redeemable 5-year rate reset Preferred Shares, Series 3 (the “Series 3 Preferred Shares”) and the non-cumulative floating rate Preferred Shares, Series 4 (“Series 4 Preferred Shares”).

Holders of Series 3 Preferred Shares, should any remain outstanding after September 30, 2019 will be entitled to receive fixed rate non-cumulative preferential cash dividends on a quarterly basis, as and when declared by the Board of Directors of Equitable. The dividend rate for the five-year period commencing on September 30, 2019 to, but excluding September 30, 2024 will be 5.969% per annum, or $0.373063 per share per quarter, being equal to the sum of the five-year Government of Canada bond yield determined as of August 30, 2019 plus 4.78%, in accordance with the terms of the Series 3 Preferred Shares.

Holders of Series 4 Preferred Shares, should any be issued on September 30, 2019, will be entitled to receive floating rate non-cumulative preferential cash dividends on a quarterly basis, calculated on the basis of the actual number of days elapsed in each quarterly floating rate period divided by 365, as and when declared by the Board of Directors of Equitable. The dividend rate for the three-month period commencing on September 30, 2019 to, but excluding December 31, 2019 will be 6.418%, or $0.404422 per share, being equal to the sum of the annual rate for the most recent auction of the three-month Government of Canada Treasury Bills plus 4.78% (the “Floating Quarterly Dividend Rate”), in accordance with the terms of the Series 4 Preferred Shares. The Floating Quarterly Dividend Rate will be reset every quarter.

Holders of Series 3 Preferred Shares who wish to retain their Series 3 Preferred Shares do not need to take any further action. Holders of Series 3 Preferred Shares who wish to exercise their right of conversion should communicate as soon as possible with their broker or other nominee to obtain instructions for exercising such right on or prior to the deadline for exercise, which is 5:00 p.m. (Toronto time) on September 13, 2019.

They later announced:

that none of its outstanding 3,000,000 Non-cumulative Redeemable 5-Year Rate Reset Preferred Shares, Series 3 (the “Series 3 Preferred Shares”) will be converted on September 30, 2019 into Non-cumulative Floating Rate Preferred Shares, Series 4 (“Series 4 Preferred Shares”).

After taking into account all election notices received from holders of its outstanding Series 3 Preferred Shares by the September 13, 2019 deadline for conversion into Series 4 Preferred Shares, less than the minimum 800,000 shares required to give effect to the conversions, as per the terms of the Series 3 Preferred Shares described in the prospectus supplement dated July 25, 2014, were tendered for conversion. As a result, no Series 4 Preferred Shares will be issued on September 30, 2019 and holders of Series 3 Preferred Shares will retain their shares.

As previously announced on September 3, 2019, the dividend rate for the Series 3 Preferred Shares for the five-year period from and including September 30, 2019 to but excluding September 30, 2024 will be 5.969% per annum, or $0.373063 per share per quarter.

EQB.PR.C was issued as a FixedReset, 6.35%+478 in the summer of 2014.

As I wrote at the time:

This issue is unrated and will not be tracked by HIMIPref™. This is not because I worship the Credit Rating Agencies and am unable to do anything without them; it is because I feel that a public announcement by the CRAs of imminent downgrades do an admirable job of concentrating the minds of management and the directors on fixing the problem. Such announcements by Hymas Investment Management Inc. or Joe Blogger do not carry the same weight.

Since I don’t track it, it’s easy to overlook changes! Thanks to Assiduous Reader dodoi for bringing this to my attention.

This entry was posted on Wednesday, December 4th, 2019 at 11:17 pm 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.