BCE Inc. has announced:
1. Holders of fixed-rate BCE Inc. Series AK Preferred Shares have the right to convert all or part of their shares, effective on December 31, 2021, on a one-for-one basis, into floating-rate Cumulative Redeemable First Preferred Shares, Series AL of BCE Inc. (the “Series AL Preferred Shares”). In order to convert their shares, holders must exercise their right of conversion during the conversion period, which runs from December 1, 2021 until 5:00 p.m. (Montréal/Toronto time) on December 16, 2021.
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4. As of December 31, 2021, the Series AK Preferred Shares will, should they remain outstanding, pay, on a quarterly basis, as and when declared by the Board of Directors of BCE Inc., a fixed cash dividend for the following five years that will be based on a fixed rate equal to the sum of: (a) the yield to maturity compounded semi-annually (the “Government of Canada Yield”), computed on December 1, 2021 in accordance with the articles of BCE Inc., of a Canadian dollar denominated non-callable Government of Canada bond with a term to maturity of five years, and (b) 1.88%. The “Government of Canada Yield” computed on December 1, 2021 is 1.426%. Accordingly, the annual fixed dividend rate applicable to the Series AK Preferred Shares for the period of five years beginning on December 31, 2021 will be 3.306%.
BCE.PR.K was issued as a FixedReset, 4.15%+188, that commenced trading 2011-7-5 after being announced 2011-6-20. Astonishingly, it was re-opened in December, 2011; rare enough in itself, but what’s more it was sold at par even though the GOC-5 yield had tumbled to 1.33% from the time-of-issue level of about 2.20%. The issue reset at 2.954% in 2016 and I recommended against conversion; there was a 9% conversion to the FloatingReset, BCE.PR.L, anyway. BCE.PR.K is tracked by HIMIPref™, but is been relegated to the Scraps index on credit concerns.
BCE.PR.L is a FloatingReset, Bills+188, that arose via partial conversion from BCE.PR.K.
Hi,
Just wondering how any preferred can be “relegated to the Scraps index on credit concerns” from BCE? I thought BCE is a powerhouse that would never be allowed to default (ie government intervention).
Regards,
FerrisWheel
BCE Inc. is rated Pfd-3 by DBRS. My indices use DBRS for third-party evaluations of credit quality (S&P when no DBRS rating exists) and the minimum is Pfd-2(low).