Quadravest has announced:
Financial 15 Split Corp. (the “Company”) announces that in keeping with current market rates for preferred shares with similar terms, the Preferred Share (“FTN.PR.A”) dividend rate for the fiscal year commencing December 1, 2024 will be set at 8.50% (previously 9.25%). Monthly payments to FTN.PR.A will be $0.07083 per share for an annual yield of 8.50% on their $10.00 redemption value.
The Company invests in an actively managed, high quality portfolio consisting of 15 financial services companies made up of Canadian and U.S. issuers as follows:
Bank of Montreal National Bank of Canada Bank of America Corp. The Bank of Nova Scotia Manulife Financial Corporation Citigroup Inc. Canadian Imperial Bank of Commerce Sun Life Financial Inc. Goldman Sachs Group Inc. Royal Bank of Canada Great-West Lifeco Inc. JP Morgan Chase & Co. The Toronto-Dominion Bank CI Financial Corp. Wells Fargo & Co.
FTN.PR.A has a minimum reset rate of 5.50%, commencing in 2020. Actual rates have been, in order, 6.75%, 6.75%, 7.50% and 9.25%.
Thanks to Assiduous Reader niagara for bringing this to my attention!
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What are the odds they don’t extend this preferred?
It is trading at a significant premium…
What are the odds they don’t extend this preferred?
Quadravest billed the fund $5,328,904 in 2023. I’d say the chances of extension are pretty good.
When they set the terms for the extension, they will (added: almost certainly) set the dividend rate on the preferreds sufficienty high that they can reasonably expect the preferreds to trade slightly above par value. Then only a few blithely ignorant investors will exercise their retraction-upon-extension right and the handful of shares tendered to the retraction can be recirculated.
All makes sense.
Thanks for the prompt reply.