CPX.PR.C To Reset At 6.86%

Capital Power Corporation has announced:

that it has notified registered shareholders of its Cumulative Rate Reset Preference Shares, Series 3 (Series 3 Shares) (TSX: CPX.PR.C) of the Conversion Privilege and Dividend Rate Notice.

Subject to certain conditions, beginning on December 1, 2023 and ending at 5:00 p.m. (Toronto time) on December 18, 2023, each registered holder of Series 3 Shares will have the right to elect to convert any or all of their Series 3 Shares into an equal number of Cumulative Floating Rate Preference Shares, Series 4 (Series 4 Shares) by delivering an Election Notice to the Corporation.

If Capital Power does not receive an Election Notice from a holder of Series 3 Shares during the time fixed therefor, then the Series 3 Shares shall be deemed not to have been converted (except in the case of an Automatic Conversion, see below). Holders of the Series 3 Shares and the Series 4 Shares will have the opportunity to convert their shares again on December 31, 2028, and every five years thereafter as long as the shares remain outstanding.

On December 1, 2023, the Annual Fixed Dividend Rate for the Series 3 Shares was set for the next five-year period (from and including December 31, 2023, to but excluding December 31, 2028) at 6.86000% and the Floating Quarterly Dividend Rate for the Series 4 Shares was set for the first Quarterly Floating Rate Period (being the period from and including December 31, 2023, to but excluding March 31, 2024) at 2.06233%. The Floating Quarterly Dividend Rate will be reset every quarter.

The Series 3 Shares are issued in “book entry only” form and, as such, the sole registered holder of the Series 3 Shares is CDS Clearing and Depository Services Inc. (CDS). All rights of beneficial holders of Series 3 Shares must be exercised through CDS or the CDS participant through which the Series 3 Shares are held. The deadline for the registered shareholder to provide notice of exercise of the right to convert Series 3 Shares into Series 4 Shares is 3:00 p.m. (MT) / 5:00 p.m. (ET) on December 18, 2023. Any Election Notices received after this deadline will not be valid. As such, beneficial holders of Series 3 Shares who wish to exercise their rights to convert their shares should contact their broker or other intermediary for more information and it is recommended that this be done well in advance of the deadline in order to provide the broker or other intermediary with time to complete the necessary steps.

After December 18, 2023, (i) if Capital Power determines that there would remain outstanding on December 31, 2023, less than 1,000,000 Series 3 Shares, all remaining Series 3 Shares will be automatically converted into Series 4 Shares on a one-for-one basis effective December 31, 2023 (an Automatic Conversion); or (ii) if Capital Power determines that there would remain outstanding after December 31, 2023, less than 1,000,000 Series 4 Shares, no Series 3 Shares will be permitted to be converted into Series 4 Shares effective December 31, 2023. There are currently 6,000,000 Series 3 Shares outstanding.

The Toronto Stock Exchange (TSX) has conditionally approved the listing of the Series 4 Shares effective upon conversion. Listing of the Series 4 Shares is subject to the Capital Power fulfilling all the listing requirements of the TSX and upon approval, the Series 4 Shares will be listed on the TSX under the trading symbol CPX.PR.D.

For more information on the terms of, rates and risks associated with an investment in, the Series 3 Shares and the Series 4 Shares, please see Capital Power’s prospectus supplement dated December 10, 2012 which is available on sedarplus.ca or on Capital Power’s website at capitalpower.com.

CPX.PR.C is a FixedReset, 4.60%+323, that commenced trading 2012-12-18 after being announced 2012-12-6. The issue reset at 5.453% effective 2018-12-31. I recommended against conversion; there was no conversion. CPX.PR.C is tracked by HIMIPref™ but relegated to the Scraps – FixedReset Discount index on credit concerns.

Thanks to IrateAssiduousReader for bringing this to my attention!

5 Responses to “CPX.PR.C To Reset At 6.86%”

  1. Fuzzybear says:

    AQN.PR.A has been reset to 6.469%:

    “The dividend rate for the 5-year period from and including December 31, 2023 to but excluding December 31, 2028 will be 6.469%, being equal to the 5-year Government of Canada bond yield determined as of today plus 2.94%, in accordance with the terms of the Series A Preferred Shares.”

    https://investors.algonquinpower.com/news-market-information/news/news-details/2023/Algonquin-Power–Utilities-Corp.-Announces-Dividend-Rates-on-Cumulative-Rate-Reset-Preferred-Shares-Series-A-and-Cumulative-Floating-Rate-Preferred-Shares-Series-B/default.aspx

  2. Fuzzybear says:

    And:

    BIP.PR.F has been reset to 6.556%.

    “If declared, the fixed quarterly distributions on the Series 11 Units during the five years commencing January 1, 2024 will be paid at an annual rate of 6.446% ($0.402875 per unit per quarter).”

    https://bip.brookfield.com/press-releases/bip/brookfield-infrastructure-announces-reset-distribution-rate-its-series-11

    (and that’s one weird mother of a security based on your description back when they were issued https://prefblog.com/?p=37211)

  3. jambr403 says:

    Beauty. Thanks for posting Fuzzybear. Long both AQN.PR.A and BIP.PR.F.

  4. niagara says:

    And more news. Middlefield goes back to the trough with another new issue for E-Split (not on their website yet from what I can see):

    E Split Corp. Announces Overnight Offering

    Not for distribution to U.S. Newswire Services or for dissemination in the United States.

    TORONTO, Dec. 04, 2023 (GLOBE NEWSWIRE) — Middlefield Group, on behalf of E Split Corp. (TSX: ENS and ENS.PR.A) (the “Company”), is pleased to announce that the Company is undertaking an overnight treasury offering of class A and preferred shares (the “Class A Shares” and “Preferred Shares”, respectively).

    The sales period for this overnight offering will end at 9:00 a.m. (ET) on Tuesday, December 5, 2023. The offering is expected to close on or about December 12, 2023 and is subject to certain closing conditions including approval by the Toronto Stock Exchange (“TSX”).

    The Class A Shares will be offered at a price of $12.55 per Class A Share to yield 12.4% and the Preferred Shares will be offered at a price of $9.80 per Preferred Share to yield 7.5% to maturity. The closing price on the TSX for each of the Class A Shares and Preferred Shares on December 1, 2023 was $12.82 and $9.90, respectively. The Class A Share and Preferred Share offering prices were determined so as to be non-dilutive to the most recently calculated net asset value per unit of the Company (calculated as at December 1, 2023), as adjusted for dividends and certain expenses to be accrued prior to or upon settlement of the offering.

    The Company invests in common shares of Enbridge Inc., a North American oil and gas pipeline, gas processing and natural gas distribution company.

  5. […] Thanks to Assiduous Reader Fuzzybear for bringing this to my attention! […]

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