{"id":25931,"date":"2014-07-28T01:04:24","date_gmt":"2014-07-28T06:04:24","guid":{"rendered":"http:\/\/prefblog.com\/?p=25931"},"modified":"2014-07-28T01:04:24","modified_gmt":"2014-07-28T06:04:24","slug":"massive-liquidity-premium-in-bpo-vs-bps-preferred-shares","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=25931","title":{"rendered":"Massive Liquidity Premium in BPO vs. BPS Preferred Shares"},"content":{"rendered":"

Assiduous Reader JQ writes in and says:<\/p>\n

Hi, James,<\/p>\n

I am your long time loyal reader and have learned a lot from you. Thank you very much.<\/p>\n

Would you please to answer the following questions about BPO and BPS preferred shares:
\nBPO.PR._ and BPS.PR._ are both listed, are they same? Why the price difference is so big? Will BPO.PR._ be delisted?<\/p>\n

Thank you.<\/p><\/blockquote>\n

Well, JQ, flattery will get you everywhere! I checked out the last bids for Friday:<\/p>\n

\n\n\n\n\n\n\n\n
BPO vs. BPS Retractible Preferred Shares<\/td>\n<\/tr>\n
BPO Ticker<\/td>\nShares
Outstanding<\/td>\n		Quote
2014-7-25<\/td>\n		BPS Ticker<\/td>\nShares
Outstanding<\/td>\n		Quote
2014-7-25<\/td>\n<\/tr>\n
BPO.PR.H<\/td>\n7.0-million<\/td>\n25.40-57<\/td>\nBPS.PR.A<\/td>\n1.0-million<\/td>\n25.11-25<\/td>\n<\/tr>\n
BPO.PR.J<\/td>\n7.0-million<\/td>\n25.26-35<\/td>\nBPS.PR.B<\/td>\n1.0-million<\/td>\n24.75-76<\/td>\n<\/tr>\n
BPO.PR.K<\/td>\n5.0-milllion<\/td>\n25.70-94<\/td>\nBPS.PR.C<\/td>\n1.0-million<\/td>\n24.63-90<\/td>\n<\/tr>\n
BPO.PR.U
[US Pay]<\/td>\n		3.4-million<\/td>\n25.33-47<\/td>\nBPS.PR.U
[US Pay]<\/td>\n		1.0-million<\/td>\n24.95-00<\/td>\n<\/tr>\n<\/table>\n<\/div>\n

Assiduous Readers will recall that BPS preferred shares commenced trading on June 11<\/a>. Readers will also recall that after reviewing the terms of the organization<\/a> I concluded that I was more or less indifferent to the choice between the old BPO preferred and the equivalent BPS preferred share:<\/p>\n

I make no recommendation. The decision will depend on each holders desire for a (miniscule) extra amount of credit protection (with the early retraction privilege) vs. what could potentially be a very severe loss of liquidity.<\/p><\/blockquote>\n

However, the difference in price between the equivalent issues is currently fairly large; I urge holders of the BPO preferred shares to review very carefully their need for liquidity and determine whether or not a swap is indicated in their particular situation.<\/p>\n

Regrettably, Brookfield Properties Split Corp. still does not have a website, from which we may deduce that the directors (see SEDAR<\/a>, Brookfield Property Split Corp. Jun 27 2014 14:34:52 ET Security holders documents – English; direct links are not permitted, since the (indirectly) bank-owned SEDAR has a monopoly granted by the securities regulators which they grossly abuse; the competition bureau has given the banks huge exemptions from competition laws in exchange for large regular payments to the regulators):<\/p>\n