10 Responses to “July 5, 2021”

1. CanSiamCyp says:

   July 6, 2021 at 9:34 am

   Announced Redemptions from BMO Monthly Pref Report

   26-Jul-21 BNS.PR.G Bank Of Nova Scotia 5.50% 472 Fixed Reset
   31-Jul-21 CWB.PR.C Canadian Western Bank 6.25% 547 Fixed Reset
   16-Aug-21 NA.PR.A National Bank Of Canada 5.40% 466 Fixed Reset
   24-Aug-21 RY.PR.R Royal Bank Of Canada 5.50% 480 Fixed Reset

2. CanSiamCyp says:

   July 6, 2021 at 9:36 am

   Another one bites the dust!

   Brookfield Renewable Partners L.P. (TSX: BEP.UN; NYSE: BEP) today announced that it intends to redeem all of its outstanding Class A Preferred Limited Partnership Units, Series 9 (the “Series 9 Preferred Units”) (TSX: BEP.PR.I) for cash on July 31, 2021.

   Spread of 501 b.p.

3. CanSiamCyp says:

   July 6, 2021 at 9:39 am

   And another one bites the dust!

   “Brookfield Infrastructure Partners L.P. (TSX: BIP.UN; NYSE: BIP) (“Brookfield Infrastructure”) today announced the closing of a public offering of $250 million of fixed rate subordinated notes due May 24, 2081 (the “notes”).

   The notes, which have a coupon of 5.00%, will be listed on the New York Stock Exchange under the symbol “BIPH”. Brookfield Infrastructure intends to use the net proceeds of the offering for the redemption of its Class A Preferred Units, Series 5, which are redeemable by Brookfield Infrastructure on September 30, 2021, with the remainder to be used for general corporate purposes.”

   BIP.PR.C BROOKFIELD INFRA Ser 5 Min Reset with Spread 464

4. RAV4guy says:

   July 9, 2021 at 11:00 am

   Thank you for your 3 posts CanSiamCyp. I have been trying to keep a running total of the redemptions since August 2020 when EFN announced the redemption of EFN.PR.G and RY announced the redemption of $1.5 Billion worth of preferred shares.
   From then to the July 2 announcement of the BIP.PR.C redemption I calculate there have been $8.972 Billion of redemtions announced. In the same time frame I calculate there have been $622.5 Million of new issues announced (PVS.PR.I, MIC.PR.A, PVS.PR.J and EMA.PR.J). My calculations include the PVS redemptions and new issues but no there are no other split share preferreds included. I believe there have been several of these but I find it hard to get the data and do not bother.
   I do not the total size of the preferred share market accurately but if it is around $100 Billion then the market has has shrunk by about 8%.

5. peet says:

   July 9, 2021 at 7:40 pm

   “I do not know the total size of the preferred share market accurately but if it is around $100 Billion then the market has shrunk by about 8%.”

   RAV4guy, interesting numbers, thanks.

   I think the pref market may be considerably smaller and the shrinkage effect due to the LRCNs materially higher.

   In September 2020, when Fiera Capital issued its report on Limited Recourse Capital Notes [“A Present for Preferred Share Investors”] they referred to a “$ 65- billion preferred share market”. That was after RBC had already closed its $1.75 billion LRCN.

   Since September 2020 the pref market has risen around 22%, using CPD as a proxy, so that $ 65 billion would be closer to $ 80 billion now … were it not for the redemptions & new issues.

   Subtracting your net $ 8.9 billion of redemptions & new issues [ some of which redemptions have already closed, others to close in July and August] suggests a market by the end of the summer closer to $ 70 billion. That would be a shrinkage of some 12.5% from late summer 2020.

6. peet says:

   July 9, 2021 at 7:58 pm

   Correction: “your net 8.2” , not “8.9”.

   Correction 2: “That would be a shrinkage of some 12.5% from late summer 2020” … if one didn’t have to factor in the 8.2 of net redemptions & issuances.

   Also: I am assuming Fiera’s pref market numbers are based on market, not nominal par values.

7. Tim says:

   July 16, 2021 at 4:45 pm

   Here is another redemption announcement, out today:

   TORONTO, July 16, 2021 /CNW/ – Bank of Montreal (TSX: BMO) (NYSE: BMO) (the “Bank”) today announced its intention to redeem all of its 9,425,607 outstanding Non-Cumulative 5-Year Rate Reset Class B Preferred Shares, Series 25 (“Preferred Shares Series 25”) for an aggregate total of approximately $236 million and all of its 2,174,393 outstanding Non-Cumulative Floating Rate Class B Preferred Shares, Series 26 (“Preferred Shares Series 26”) for an aggregate total of approximately $54 million on August 25, 2021. The redemption has been approved by the Office of the Superintendent of Financial Institutions.

   The Preferred Shares Series 25 and the Preferred Shares Series 26 are redeemable at the Bank’s option on August 25, 2021, at a redemption price of $25.00 per share. Payment of the redemption price will be made by the Bank on August 25, 2021.

8. Brin says:

   July 22, 2021 at 11:09 am

   I regards to preferreds being redeemed there are no dividends paid after the final ex-dividend date in most cases. For BMO series 25 there will be not be dividends paid from July 30 to August 25, they get to hold your funds for free.

9. RAV4guy says:

   July 23, 2021 at 10:15 am

   BMO is just following the rules it laid out in the 2011 prospectus for BMO.PR.Q and BMO.PR.A. The dividend payment date and the date for the call are as specified. I do not see anything nefarious here. One can always sell in the open market if unsatisfied with the terms.

10. jiHymas says:

    July 23, 2021 at 10:48 am

    Note the following from the BMO.PR.Q prospectus:

    The initial dividend, if declared, shall be payable on August 25, 2011 and shall be $0.44610 per share, based on the anticipated closing date of March 11, 2011. Thereafter, quarterly dividends shall be a rate of $0.24375 per share.

    So BMO is paying the full stated dividend rate for the entire period the issue is outstanding. The ex-dividend date simply determines who gets the cheque; the market will adjust accordingly and the issue will (barring silliness) trade below par following the final ex-dividend date.