Algonquin Power & Utilities Corp. has announced:
the applicable dividend rates, determined as of March 1, 2024, for its Cumulative Rate Reset Preferred Shares, Series D (the “Series D Preferred Shares”) and Cumulative Floating Rate Preferred Shares, Series E (the “Series E Preferred Shares”).
With respect to any Series D Preferred Shares that remain outstanding after April 1, 2024, holders thereof will be entitled to receive quarterly fixed cumulative preferential cash dividends, if, as and when declared by the board of directors of the Company (the “Board”). The dividend rate for the 5-year period from and including March 31, 2024 to but excluding March 31, 2029 will be 6.853%, being equal to the 5-year Government of Canada bond yield determined as of March 1, 2024 plus 3.28%, in accordance with the terms of the Series D Preferred Shares.
With respect to any Series E Preferred Shares that may be issued on April 1, 2024, holders thereof will be entitled to receive quarterly floating rate cumulative preferential cash dividends, if, as and when declared by the Board. The dividend rate for the 3-month floating rate period from and including March 31, 2024 to but excluding June 30, 2024 will be 8.261%, being equal to the 3-month Government of Canada Treasury Bill yield determined as of March 1, 2024 plus 3.28%, calculated on the basis of the actual number of days in such quarterly period divided by 365, in accordance with the terms of the Series E Preferred Shares.
Beneficial owners of Series D Preferred Shares who wish to exercise their conversion right should communicate with their broker or other nominee to ensure their instructions are followed so that the registered holder of the Series D Preferred Shares can meet the deadline to exercise such conversion right, which is 5:00 p.m. (EST) on March 18, 2024.
AQN.PR.D was issued as a FixedReset, 5.00%+328, that commenced trading 2014-3-5 after being announced 2014-2-24. The extension was announced 2019-2-26 and the reset to 5.091% effective March 31, 2019 was announced 2019-3-1. I recommended against conversion and there was no conversion. Notice of extension was issued in 2024. The issue is tracked by HIMIPref™ but relegated to the Scraps-FixedReset (Discount) subindex on credit concerns.
Thanks to Assiduous Readers niagara and xalier for bringing this to my attention!
Hi, I was wondering if you are buying preferreds nowadays after many of them have jumped double digits from their lows? Are you still focusing on FRD? I will have some free cash later in the year and not sure what to do with it.
Re. AQN-PR.D: I was looking to find investor prospective document issued at the time of the issuance of shares. On their website it does not seem to be available. Is there another source when it can be accessed? One of the reasons i want to see it is if i purchase the shares at premium and, in the case, the whole company is being purchased, this document should specify the price investors would get for the prefs. In my view the shares represent a pretty good value now given the reset of 5 yr+328% and the next reset is in March 2029. Would be interested to know what others think.
Briefly, SEDAR+.
If you can’t figure it out – and believe me, I’m not being patronizing, it’s a horrible website – post again and tell me how far you got.
if i purchase the shares at premium and, in the case, the whole company is being purchased, this document should specify the price investors would get for the prefs.
You should not expect to see such information. It would be very difficult for a prospectus to provide such information because it all depends on the deal and the deal depends on the circumstances prevailing at the time.
What a prospectus gives you is certain rights, or certain ‘substitute rights’ if the company is simply unable to uphold its end of the deal. If the company is acquired, it can’t just wipe out your rights holus-bolus and willy-nilly. Either the original deal – specified in the prospectus – stays in place or a new deal is substituted. Maybe the new deal consists of a purchase, maybe it doesn’t. Maybe the company exists as a shell until the next redemption-at-par opportunity, maybe it doesn’t. Whatever it is, you will have the right to vote on whether to accept the new deal or reject it – see ECN.PR.C To Be Acquired At 26.00 for one recent example.
Thanks James. On Sedar, I was able to find prospectus supplement quite easily. It should be available on the corporate website as well but for some reason, it was not there. As you mentioned, there is no information re. possible payout price in case the company is acquired. I read from some sources that the company is possibly an attractive takeover candidate so the scenario is plausible.