PrefBlog

BCE announced (on 2022-10-14):

Holders of fixed-rate BCE Inc. Series Z Preferred Shares have the right to convert all or part of their shares, effective on December 1, 2022, on a one-for-one basis into floating-rate Cumulative Redeemable First Preferred Shares, Series Y of BCE Inc. (the “Series Y Preferred Shares”). In order to convert their shares, holders must exercise their right of conversion during the conversion period which runs from October 17, 2022 until 5:00 p.m. (Eastern time) on November 17, 2022.
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As of December 1, 2022, the Series Z Preferred Shares, should they remain outstanding, will 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 product of: (a) the yield to maturity compounded semi-annually (the “Government of Canada Yield”), computed on November 10, 2022 by two investment dealers appointed by BCE Inc., that would be carried by a non-callable Government of Canada bond with a 5-year maturity, multiplied by (b) the “Selected Percentage Rate”. The “Selected Percentage Rate” determined by BCE Inc. is 160%. The annual dividend rate applicable to the Series Z Preferred Shares will be published on November 15, 2022 in the national edition of The Globe and Mail, the Montreal Gazette and Le Devoir and will be posted on BCE Inc.’s website at www.bce.ca.

There was a similar announcement for BCE.PR.Y:

Holders of floating-rate BCE Inc. Series Y Preferred Shares have the right to convert all or part of their shares, effective on December 1, 2022, on a one-for-one basis into fixed-rate Cumulative Redeemable First Preferred Shares, Series Z of BCE Inc. (the “Series Z Preferred Shares”). In order to convert their shares, holders must exercise their right of conversion during the conversion period which runs from October 17, 2022 until 5:00 p.m. (Eastern time) on November 17, 2022.

Today the new dividend rate for BCE.PR.Z was announced:

BCE Inc. will, on December 1, 2022, continue to have Cumulative Redeemable First Preferred Shares, Series Z (“Series Z Preferred Shares”) outstanding if, following the end of the conversion period on November 17, 2022, BCE Inc. determines that at least one million Series Z Preferred Shares would remain outstanding. In such a case, as of December 1, 2022, the Series Z Preferred Shares will 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 product of: (a) the average of the yields to maturity compounded semi-annually, determined on November 10, 2022 by two investment dealers selected by BCE Inc., that would be carried by non-callable Government of Canada bonds with a 5-year maturity (the “Government of Canada Yield”), multiplied by (b) a percentage rate determined by BCE Inc. (the “Selected Percentage Rate”) for such period. The “Selected Percentage Rate” determined by BCE Inc. for such period is 160%. The “Government of Canada Yield” is 3.341%. Accordingly, the annual dividend rate applicable to the Series Z Preferred Shares for the period of five years beginning on December 1, 2022 will be 5.346%.

BCE.PR.Z reset to 4.331% in 2007; to 3.152% in 2012; and to 3.904% in 2017.

BCE.PR.Y is a ratchetRate preferred.

The terminology, mechanics and analysis of interconvertible shares of this type have been discussed on many occasions:

• Research : Preferred Pairs
• Pairs Equivalency Calculator
• Research : Preferred Share Interconvertibility (PrefLetter Version)
• Research : Interconvertibility Part 2

Thanks to Assiduous Reader cwrea for bringing this to my attention!

This entry was posted on Tuesday, November 15th, 2022 at 10:41 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.