TC Energy Corporation has announced:
that 1,297,203 of its 18,000,000 fixed rate Cumulative Redeemable First Preferred Shares, Series 9 (Series 9 Shares) have been elected for conversion on a one-for-one basis into floating rate Cumulative Redeemable First Preferred Shares, Series 10 (Series 10 Shares) effective on Oct. 30, 2024. As a result, on Oct. 30, 2024, TC Energy will have 16,702,797 Series 9 Shares and 1,297,203 Series 10 Shares issued and outstanding. The Series 9 Shares and Series 10 Shares will be listed on the Toronto Stock Exchange under the symbols TRP.PR.E and TRP.PR.L, respectively.
TRP.PR.E was issued as a FixedReset, 4.25%+235, that commenced trading 2014-1-20 after being announced 2014-1-13. Notice of extension was provided on 2019-9-18. TRP.PR.E reset at 3.762% effective 2019-10-30. I recommended against conversion and there was no conversion. The issue resets to 5.08% effective 2024-10-30. TRP.PR.E is tracked by HIMIPref™ and assigned to the FixedReset-Discount subindex.
So, if you think about it: TRP.PR.E reset to 5.08% in accordance with a GOC-5 rate of 2.73%. So those who converted to the FloatingRate are betting that the 3-Month bill rate for the next five years will average better than 2.73%. Given that 3-Month bills are now at about 3.54% and that the swaps market is forecasting an overnight rate of 2.58% at the end of 2025, it’s not the most horrible bet I’ve seen people make.
Thanks to Assiduous Reader NK for bringing this to my attention!
This entry was posted on Thursday, October 24th, 2024 at 7:31 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.
TRP.PR.E / TRP.PR.L: 7% Conversion to FloatingReset
TC Energy Corporation has announced:
TRP.PR.E was issued as a FixedReset, 4.25%+235, that commenced trading 2014-1-20 after being announced 2014-1-13. Notice of extension was provided on 2019-9-18. TRP.PR.E reset at 3.762% effective 2019-10-30. I recommended against conversion and there was no conversion. The issue resets to 5.08% effective 2024-10-30. TRP.PR.E is tracked by HIMIPref™ and assigned to the FixedReset-Discount subindex.
So, if you think about it: TRP.PR.E reset to 5.08% in accordance with a GOC-5 rate of 2.73%. So those who converted to the FloatingRate are betting that the 3-Month bill rate for the next five years will average better than 2.73%. Given that 3-Month bills are now at about 3.54% and that the swaps market is forecasting an overnight rate of 2.58% at the end of 2025, it’s not the most horrible bet I’ve seen people make.
Thanks to Assiduous Reader NK for bringing this to my attention!
This entry was posted on Thursday, October 24th, 2024 at 7:31 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.