{"id":28487,"date":"2015-04-01T04:01:39","date_gmt":"2015-04-01T09:01:39","guid":{"rendered":"http:\/\/prefblog.com\/?p=28487"},"modified":"2015-04-01T04:01:39","modified_gmt":"2015-04-01T09:01:39","slug":"think-preferred-dividends-are-safe-not-these-ones","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=28487","title":{"rendered":"Think preferred dividends are safe? Not these ones"},"content":{"rendered":"<p>John Heinzl of the Globe and Mail was kind enough to quote me extensively in his latest piece, <a href=\"http:\/\/www.theglobeandmail.com\/globe-investor\/investment-ideas\/strategy-lab\/dividend-investing\/think-preferred-dividends-are-safe-wrong\/article23722085\/\">Think preferred dividends are safe? Not these ones<\/a>:<\/p>\n<blockquote><p>Well, don\u2019t look now but a whole whack of preferred shares \u2013 specifically rate-reset preferreds that have come to dominate the market \u2013 could soon take a hatchet to their payments.<\/p>\n<p>Some of these dividend cuts will be \u201cabsolutely massive,\u201d said preferred share expert James Hymas, president of Hymas Investment Management in Toronto.<\/p>\n<p>This will come as a surprise to investors who depend on the predictable cash flow of preferreds, but Mr. Hymas has done the calculations and they paint a grim picture. In the next year or so, he expects many rate-reset preferreds to slash their dividends by 25 to 45 per cent. Depending on what happens to bond yields, many more rate-reset preferreds will likely reduce their dividends in coming years.<\/p><\/blockquote>\n<p>Here&#8217;s a chart that I published in the March edition of <a href=\"http:\/\/www.prefletter.com\">PrefLetter<\/a>, showing the expected change in dividends, given a constant GOC-5 rate of 0.84%, as related to each issue&#8217;s next Exchange Date:<\/p>\n<div align=\"center\"><a href=\"http:\/\/prefblog.com\/wp-content\/uploads\/2015\/04\/PL_150313_App_FR_Chart_26.jpg\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/prefblog.com\/wp-content\/uploads\/2015\/04\/PL_150313_App_FR_Chart_26-300x264.jpg\" alt=\"PL_150313_App_FR_Chart_26\" width=\"400\" height=\"352\" class=\"alignnone size-medium wp-image-28488\" \/><\/a><br \/><i>Click for Big<\/i><\/div>\n<p><b>Update, 2015-05-03<\/b>: There was a <a href=\"http:\/\/prefblog.com\/?p=28914\">steep decline in FixedResets<\/a> at the beginning of April, 2015. One commenter <a href=\"http:\/\/www.nexgenfinancial.ca\/blog\/what-the-heck-is-going-on\/\">attributed at least part of the descent<\/a> to this article.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>John Heinzl of the Globe and Mail was kind enough to quote me extensively in his latest piece, Think preferred dividends are safe? Not these ones: Well, don\u2019t look now but a whole whack of &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[19],"tags":[],"class_list":["post-28487","post","type-post","status-publish","format-standard","hentry","category-press-clippings"],"_links":{"self":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/28487","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=28487"}],"version-history":[{"count":0,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/28487\/revisions"}],"wp:attachment":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=28487"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=28487"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=28487"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}