PrefBlog

Power Financial Corporation has announced:

that it does not intend to exercise its right to redeem all or part of the currently outstanding 8,965,485 Non-Cumulative 5-Year Rate Reset First Preferred Shares, Series P (the “Series P shares”) nor all or part of the currently outstanding 2,234,515 Non-Cumulative Floating Rate First Preferred Shares, Series Q (the “Series Q shares”) on January 31, 2021. As a result, subject to certain conditions, the holders of the Series P shares have the right to convert all or part of their Series P shares, on a one-for-one basis, into Series Q shares, and subject to certain conditions, the holders of the Series Q shares have the right to convert all or part of their Series Q shares, on a one-for-one basis, into Series P shares, in each case on February 1, 2021 (the “Conversion Date”), pursuant to the terms and conditions of the Series P shares and the Series Q shares.

Holders of Series P shares who do not exercise their right to convert their Series P shares into Series Q shares on the Conversion Date will retain their Series P shares, and holders of the Series Q shares who do not exercise their right to convert their Series Q shares into Series P shares on the Conversion Date will retain their Series Q shares, in each case, subject to certain conditions.

The foregoing conversion rights of the Series P shares and the Series Q shares are subject to the conditions that: (i) if Power Financial determines that there would remain outstanding on the Conversion Date less than 1,000,000 Series Q shares, after having taken into account all Series P shares and Series Q shares tendered for conversion, then holders of Series P shares will not be entitled to convert their shares into Series Q shares and all remaining Series Q shares will automatically be converted into Series P shares without the consent of the holders, on a one-for-one basis, on the Conversion Date, and (ii) alternatively, if Power Financial determines that there would remain outstanding on the Conversion Date less than 1,000,000 Series P shares, after having taken into account all Series P shares and Series Q shares tendered for conversion, then holders of Series Q shares will not be entitled to convert their shares into Series P shares and all remaining Series P shares will automatically be converted into Series Q shares without the consent of the holders, on a one-for-one basis, on the Conversion Date. In either case, Power Financial will give written notice to that effect to the registered holders of Series P shares and/or Series Q shares, as the case may be, no later than January 25, 2021.

The dividend rate applicable to the Series P shares for the 5-year period from January 31, 2021 to but excluding January 31, 2026, and the dividend rate applicable to the Series Q shares for the 3-month period from January 31, 2021 to but excluding April 30, 2021, will be determined and announced by way of a news release on January 4, 2021.

Beneficial owners of Series P shares or Series Q shares who wish to exercise their conversion right should communicate with their broker or other nominee to obtain instructions for exercising such right during the conversion period, which runs from January 4, 2021 until January 18, 2021 at 5:00 p.m. (Eastern Time).

PWF.PR.P was issued as a FixedReset, 4.40%+160, that commenced trading 2010-6-29 after being announced 2010-6-17. It reset to 2.306% in 2016; I recommended against conversion but there was a 20% conversion to PWF.PR.Q anyway.

PWF.PR.Q is a FloatingReset, Bills+160, that arose via a partial conversion from PWF.PR.P in 2016.

This entry was posted on Wednesday, December 2nd, 2020 at 10:44 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.