Issue: YPG Holdings Inc. Cumulative Rate Reset Preferred Shares, Series 3
Size: 6-million shares (=$150-million) + greenshoe 0.9-million shares ($22.5-million)
Dividend: 6.75% (= $1.6875) p.a. until first Exchange Eate, then resets to 5-Year Canadas +417bp. First Dividend payable 2009-12-29 for $0.44846, assuming closing 2009-9-23. Dividends are cumulative.
Exchange Dates: 2014-9-30 and every five years thereafter.
Exchangeable: Every Exchange Date, to and from Series 4 Floaters, which pay 3-month bills +417bp, reset quarterly.
Redeemable: Every Exchange Date at 25.00. Series 4 are also redeemable at $25.50 at all other times.
Retraction: None.
Closing: 2009-9-23
Update: I have been advised that the deal size has been increased to 7.5-million shares (=$187.5-million) + greenshoe 1.125-million shares (=$28.125-million).
This new issue ought to make clear that YPG.PR.A with a yield to $25 redemption (and an opportunity to retract at a 5% discount in YPG.UN units) in 3 years of 6.5% is fairly priced while
YPG.PR.B with a yield to 8 year redemption/retraction yields >10% and is a much better deal than either PR.A nor the new issue. I figure YPG.PR.B needs to improve 19% in price to yield 1% more than YPG.PR.A (or 27% to yield the same), so I still have one arbitrage trade on from six months ago that is $5.00 per share to the good that I will leave in place until I make the next $2+.
[…] the 6.75%+417 FixedReset announced September 8 and promptly upsized to 7.5-million shares + greenshoe 1.125-million shares (I don’t know […]