EFN.PR.C To Be Redeemed

Element Fleet Management has announced (in their 24Q1 earnings release, I don’t see a redemption press release):

Capital structure

Redemption of all outstanding 6.21% Cumulative 5-Year Rate Reset Preferred Shares Series C

To further optimize the Company’s balance sheet and mature its capital structure, the Company announced today its intention to redeem – in accordance with the terms of the 6.21% Cumulative 5-Year Rate Reset Preferred Shares Series C (the “Series C Shares”) as set out in the Company’s articles – all of its 5,126,400 issued and outstanding Series C Shares on June 30, 2024 (the “Share Redemption Date”) for a redemption price equal to CAD$25.00 per Series C Share for an aggregate total amount of approximately US$94.6 million (CAD$128 million), together with all accrued and unpaid dividends up to but excluding the Share Redemption Date (the “Redemption Price”), less any tax required to be deducted and withheld by the Company.

The Company has provided notice today of the Redemption Price and the Share Redemption Date to the sole registered holder of the Series C Shares in accordance with the terms of the Series C Shares as set out in the Company’s articles. Non-registered holders of Series C Shares should contact their broker or other intermediary for information regarding the redemption process for the Series C Shares in which they hold a beneficial interest. The Company’s transfer agent for the Series C Shares is Computershare Investor Services Inc. (“Computershare Investor Services”). Questions regarding the redemption process may be directed to Computershare Investor Services at 1-800-564-6253 or by email to corporateactions@computershare.com.

Following their redemption on June 30, 2024, the Series C Shares will be de-listed from and no longer trade on the Toronto Stock Exchange (“TSX”).

The Company also currently anticipates using a portion of its free cash flow to redeem all its outstanding 5.903% Cumulative 5-Year Rate Reset Preferred Shares Series E (due September 2024) for an approximate aggregate total amount of US$98.2 million (CAD$133 million).

This announcement validates their earlier anticipation of a redemption.

EFN.PR.C was announced 2014-2-26 as a FixedReset, 6.50%+481, but was not added to HIMIPref™ at that time as the company did not have a credit rating. The company received an initial rating from DBRS on 2015-9-24 and HIMIPref™ commenced tracking its four issues then outstanding shortly thereafter. The extension of the issue was announced 2019-5-22 and it was later announced that EFN.PR.C would reset at 6.210% effective June 30, 2019. I recommended against conversion and there was no conversion. The issue has been tracked by HIMIPref™ but is relegated to the Scraps – FixedReset (Discount) subindex on credit concerns.

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

6 Responses to “EFN.PR.C To Be Redeemed”

  1. RAV4guy says:

    I have an account with RBC Dominion Securities (RBCDS). On May 28, I gave my investment advisor (IA) an instruction to sell my 800 shares of EFN.PR.C at a limit price of $25.27 at about 9:45AM. I use the TMX publicly available website information and can see no record there that matches the completed trade done on May 28.

    I asked my IA where the trade was done. He said it was done on the NEO exchange at 9:55AM. It then appears that my trade of 800 shares is not part of the trading of 8,700 shares of EFN.PR.C recorded by TMX for May 28 and also shown by RBCDS to be the trading in EFN.PR.C for the day.

    I am not familiar with NEO so I looked at the NEO exchange. It appears to be an exchange where ETFs, popular Canadian common stocks and CDRs of popular American stocks trade. I saw no evidence of any trading in Canadian preferred shares on NEO but I did not look in every corner.

    Is it possible that my 800 shares traded on the NEO exchange? If so does this mean that there are trades happening that are not reported publicly?

  2. aviddaye says:

    You can go to http://www.cboe.ca/en/live/security-activity/EFN-PR-C#!/market-depth
    and still see your trade history for May 28 15:38:44

  3. RAV4guy says:

    Thank you for the link aviddaye. I did not find it on my own.

    Comparing the current day trading for taday, for EFN.PR.C, shown on TMX Money and NEO there is much more volume shown on TMX Money.

    Is there anyone summing all the trading together and reporting that figure? Or is what is most commonly reported just what is traded on the TMX?

    Most of my holdings are in self directed accounts in CIBCIE. I see a bid and an ask. I suspect I just see what the information that the TMX offers. When I put in an order to buy or sell is it shown on all trading platforms?

    As a small guy I always wonder how badly the system is rigged against me.

  4. IrateAR says:

    RAV4guy –

    I’m not sure if anywhere shows consolidated volume for free. Yes most frequently it is just the TSX volume. There are annoying fees and contracts to deal with to include all the marketplaces. Looks like TSX is still around 60% of the market but that will vary wildly by ticker and day. https://www.iiroc.ca/markets/reports-statistics-and-other-information/reports-market-share-marketplace

    CIBC most likely does only show you TSX data.

    If your order is not immediately marketable they will almost certainly route it to TSX because otherwise you would call them complaining you don’t see your order in your bid/ask feed and that is annoying for them. Also TSX pays one of the highest rates for passive orders so win/win from their perspective.

    If your order is immediately marketable they will consider all (or almost all) marketplaces and route to the one with the best price because regulations require them to do so. In the event of a tie they will likely route anywhere but the TSX because TSX charges one of the highest fees for active orders.

    The main ways the system is… let’s say not organized in your favour here are:

    – With the lack of consolidated quote data, maybe there’s already an offer you don’t see at 25.20 and you’re off-market.

    – Conversely maybe there’s a bid at 25.25 that you’d have happily hit if you saw it.

    – There’s a decent chance a machine instantly matched your 25.27 offer but did it on an alternate marketplace you don’t have access and has higher priority in broker smart order routing tables. You could be the last person to fill at 25.27 in spite of being the first to set the price. The same will happen each time you improve your price until it’s not an attractive sale price anymore.

    – Similarly others may immediately be offering 25.26 with hidden orders either on TSX or other marketplaces. These will also likely get filled ahead of you and also will stay one cent ahead of any price improvements you make until they no longer like the trade. You don’t have access to these orders either.

    If you’re trading liquid stocks with tiny spreads or a long term investor that basely trades this is kind of annoying but doesn’t have a huge impact.

    Trading prefs on a retail platform is rough though. I had a good experience with QuoteStream for data. I haven’t used Interactive Brokers… I think they offer some access to better order types but I never found out which exactly. Otherwise I think the best you can do is be patient and slowly improve your price until you get filled.

  5. cbh says:

    I use RBC Direct Investing, and the only bid/ask visible there is for the TSX. However, when you put in an order that is not immediately filled, they tend to split it and put half on TSX and half elsewhere (NEO or Alpha). Actually, RBC Direct says they contract out the actual order placement and so they did not have the details to share with me.

    I have actually often seen the case where I am the first to set the price on the TSX, and yet I am the last person to fill on the other exchanges. This is a miserable system of poor visibility and transparency.

    The one site where (I think) you are able to see all of the trades across the different exchanges is StockWatch. See for example https://www.stockwatch.com/Quote/Detail.aspx?C:EFN.PR.C.

  6. RAV4guy says:

    Thank you IrateAR and cbh for your informative replies and the time you spent creating them. I can see there is a lot I have no clue about.

    I can confirm CIBCIE shows TMX data because they go to the trouble of typing in TMX, for example “BMO.PR.T TMX”. Whereas RBCDS does not include the TMX label but by checking some of what they quote for trading data it seems it is the same as what TMX reports.

    IrateAR says:
    “If your order is immediately marketable they will consider all (or almost all) marketplaces and route to the one with the best price because regulations require them to do so.”

    That statment gives me comfort.

    The challenge for me is; with stocks with large bid-ask spreads shown using the TMX data (that is easily available to me); choosing an apropriate price for my trade. I jst do limit orders in these cases rather than market orders. Others with more information will have an advantage.

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