7 Responses to “February 2, 2022”

1. skeptical says:

   February 4, 2022 at 2:39 pm

   BAM.PR.E Dividend calculation.
   The prospectus says that if the price is below $24.5, there will be a 4% adjustment to the dividend rate. But the payout is apparently based on the prime rate only. From the prospectus:

   If the Calculated Trading Price
   for the preceding month is
   The Adjustment Factor as a
   percentage of Prime shall be
   $25.50 or more -4.00%
   $25.375 and less than $25.50 -3.00%
   $25.25 and less than $25.375 -2.00%
   $25.125 and less than $25.25 -1.00%
   Greater than $24.875 and less than $25.125 nil
   Greater than $24.75 to $24.875 1.00%
   Greater than $24.625 to $24.75 2.00%
   Greater than $24.50 to $24.625 3.00%
   $24.50 or less 4.00%

   James or anyone else, any information about what’s the mysterious calculation they perform to calculate the payout rate?

   Thanks

2. baffled says:

   February 4, 2022 at 3:24 pm

   skeptical , have you contacted the company ?

3. skeptical says:

   February 4, 2022 at 3:25 pm

   Yes, sent them an email as well. Let’s see when they respond.

4. jiHymas says:

   February 4, 2022 at 8:33 pm

   From the summary:

   Thereafter, the Designated Percentage has been adjusted each month based on the average trading price of the Series 8 Preferred Shares, to a maximum of 100% and a minimum of 50%.

   See also my article Some Preferreds to Float Your Boat:

   Ratchets pay a variable proportion of prime with a minimum proportion of 50% and a maximum of 100%. The value within this range is determined by the market price of the issue. A monthly adjustment increases the proportion if the price is low, or decreases it if the price is high.

   I haven’t looked up the actual prospectus – looking up old issues on SEDAR is way too annoying – but as indicated in my article, the 50%-100% of Prime range is standard for all of these things.

5. skeptical says:

   February 4, 2022 at 9:23 pm

   Thanks James.

   Here’s a link to the prospectus from the Brookfield site

   https://bam.brookfield.com/sites/brookfield-ir/files/brookfield/preferred-shares/provisions-class-a-prefshare-series8.pdf

6. jiHymas says:

   February 4, 2022 at 9:59 pm

   I got a little curious … the last time BAM.PR.E was quoted with a bid equal to or greater than par was 2007-5-25.

7. February 9, 2022 « PrefBlog says:

   February 9, 2022 at 9:51 pm

   […] PerpetualDiscounts now yield 4.87%, equivalent to 6.33% interest at the standard equivalency factor of 1.3x. Long corporates now yield 3.82%, so the pre-tax interest-equivalent spread (in this context, the “Seniority Spread”) has widened to 250bp from the 240bp reported February 2. […]