PrefBlog

CU Inc. announced (on 2021-5-3):

that it has notified the registered shareholder of its Cumulative Redeemable Preferred Shares Series 4 (“Series 4 Preferred Shares”) of a conversion privilege and applicable dividend rates. As a result, subject to certain conditions, the holders of Series 4 Preferred Shares will have the right to choose one of the following options with regard to their shares:

To retain any or all of their Series 4 Preferred Shares and continue to receive a fixed rate quarterly dividend; or
To convert, on a one-for-one basis, any or all of their Series 4 Preferred Shares into Cumulative Redeemable Preferred Shares Series 5 (“Series 5 Preferred Shares”) of CU Inc. and receive a floating rate quarterly dividend.
Effective June 1, 2021, the annual dividend rate for the Series 4 Preferred Shares is set at 2.29% for the five-year period from and including June 1, 2021 to but excluding June 1, 2026 and the dividend rate for the Series 5 Preferred Shares is set at an annual rate of 1.46% for the three-month period commencing June 1, 2021 to but excluding September 1, 2021. The dividend rate for the Series 5 Preferred Shares will be reset each quarter. Both rates were calculated according to the terms described in the short form prospectus of CU Inc. dated November 24, 2010.

Beneficial owners of Series 4 Preferred Shares who wish to exercise their right of conversion should communicate as soon as possible with their broker or other nominee and ensure that they follow their instructions in order to meet the deadline to exercise such right, which is 3 p.m. (Calgary time) / 5 p.m. (Toronto time) on May 17, 2021. Any notices received after this deadline will not be valid. As such, it is recommended that this be done well in advance of the deadline in order to provide the broker or other nominee with time to complete the necessary steps.

The foregoing conversions are subject to the conditions that: (i) if CU Inc. determines that there would be less than 1,000,000 Series 4 Preferred Shares outstanding on June 1, 2021, then all remaining Series 4 Preferred Shares will automatically be converted into Series 5 Preferred Shares on June 1, 2021, and (ii) alternatively, if CU Inc. determines that there would be less than 1,000,000 Series 5 Preferred Shares outstanding on June 1, 2021 after giving effect to conversion notices received, no Series 4 Preferred Shares will be converted into Series 5 Preferred Shares. If either of these scenarios occurs, CU Inc. will issue a news release to that effect on or before May 24, 2021.

Holders of the Series 4 Preferred Shares and the Series 5 Preferred Shares will have the opportunity to convert their shares again on June 1, 2026, and every five years thereafter as long as the shares remain outstanding.

For more information on the terms of, and risks associated with an investment in, the Series 4 Preferred Shares and the Series 5 Preferred Shares, please see CU Inc.’s short form prospectus dated November 24, 2010, which can be found under CU Inc.’s profile on SEDAR at www.sedar.com.

They later announced (on 2021-5-21):

that after having taken into account all election notices following the conversion deadline for the Cumulative Redeemable Preferred Shares Series 4 (“Series 4 Preferred Shares”) tendered for conversion into Cumulative Redeemable Preferred Shares Series 5 (“Series 5 Preferred Shares”), the holders of Series 4 Preferred Shares are not entitled to convert their Series 4 Preferred Shares into Series 5 Preferred Shares. There were approximately 3,100 Series 4 Preferred Shares tendered for conversion, which is less than the one million shares required to give effect to conversions into Series 5 Preferred Shares.

The Series 4 Preferred Shares will continue to pay on a quarterly basis, for the five-year period beginning from and including on June 1, 2021 to but excluding June 1, 2026, as and when declared by the Board of Directors of CU Inc., a fixed dividend based on an annual dividend rate of 2.29%.

CIU.PR.C was issued as a 3.80%+136 FixedReset that commenced trading 2010-12-2 after being announced 2010-11-16. In 2016 it reset to 2.24% and there was no conversion to FloatingReset.

This entry was posted on Sunday, August 8th, 2021 at 9:34 am 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.