Aimia Inc. announced (on 2025-2-26):
y that it does not intend to exercise its right to redeem its currently outstanding Cumulative Rate Reset Preferred Shares (“Series 1 Shares”) (TSX: AIM.PR.A) on March 31, 2025.
The Company also announced that due to the results of its Substantial Issuer Bid completed on January 30, 2025, where an aggregate of 4,528,157 Series 1 Shares were tendered in consideration for 9.75% senior unsecured notes, there are currently 606,658 Series 1 Shares outstanding. In accordance with the terms of the Series 1 Shares, as there are less than 1,000,000 Series 1 Shares outstanding, none of the Series 1 Shares will be eligible for conversion into Cumulative Floating Rate Preferred Shares, Series 2 (“Series 2 Shares”) on March 31, 2025 (since any such conversion would result in less than 1,000,000 Series 2 Shares being outstanding).
As a result of the foregoing, the quarterly dividend rate for Series 1 shares will be reset for the 5-year period from March 31, 2025 to March 30, 2030 based on the sum of the 5-year Government of Canada bond yield on the 30th day prior to start of the fixed rate period plus 3.75%.
The reset dividend rate applicable to the Series 1 Shares will be announced by a news release on or about
March 3, 2025.Holders of Series 1 Shares are entitled to receive quarterly fixed cumulative preferential cash dividends as
and when declared by Aimia’s Board of Directors.
On 2025-3-3, they announced:
the applicable dividend rates for its Cumulative Rate Reset Preferred Shares, Series 1 (the “Series 1 Shares”) further to its February 26, 2025 notice and announcement that it will not exercise its right to redeem all or any part of the outstanding Series 1 Shares.
As announced in the Company’s press release dated February 26, 2025, none of the Series 1 Shares will be eligible for conversion into Cumulative Floating Rate Preferred Shares, Series 2 (“Series 2 Shares”) on March 31, 2025, as there are less than 1,000,000 Series 1 Shares outstanding (since any such conversion would result in less than 1,000,000 Series 2 Shares being outstanding).
Holders of the Series 1 Shares will be entitled to receive fixed, cumulative, preferential cash dividends, payable quarterly, as and when declared by the Company’s Board of Directors. The annual dividend rate for the five-year period from and including March 31, 2025 to, but excluding, March 31, 2030 will be 6.281% being equal to the five-year Government of Canada bond yield of 2.531% plus 3.75%, as determined in accordance with the rights, privileges, restrictions and conditions attaching to the Series 1 Shares.
Holders of Series 1 Shares as of the applicable record date remain eligible to receive dividends on their Series 1 Shares, as and when declared by the Board of Directors of Aimia, for the period from and including December 31, 2024 to, but excluding, March 31, 2025 at the current annual dividend rate of 4.802%.
Aimia recently completed a substantial issuer bid to purchase for cancellation 7,889,931 preferred shares, of which 4,528,157 were Series 1 preferred shares, in consideration for 9.75% senior unsecured notes (“2030 Notes”). Based on the number of Preferred Shares validly tendered and 2030 Notes issued in consideration, Aimia will generate approximately $6.4 million in annual cash savings when comparing the annual preferred dividends and Part VI.1 tax to the annual cash coupon interest payments. Under IFRS, Aimia expects to record a $53.7 million gain on the transaction, based on the exchange value of the 2030 Notes and the carrying value of the Preferred Shares exchanged.
AIM.PR.A is a FixedReset, 4.50%+375, assigned to the Scraps-FixedReset (Discount) subindex. It commenced trading as AER.PR.A with an initial dividend rate of 6.50% on 2010-1-20 after being announced 2010-1-12. AIM.PR.A changed its ticker from AER.PR.A in October, 2011. The first extension was reported on PrefBlog and the reset to 4.50% was announced 2015-3-2. I recommended against conversion. There was a 43% conversion to the FloatingReset, AIM.PR.B in 2015. The 2020 extension was announced 2020-2-25. AIM.PR.A will reset to 4.802% effective 2020-3-31; at that time I opined that a decision on whether to convert or hold should be made according to each investor’s circumstances. There was a complete conversion to the FixedReset.