{"id":732,"date":"2007-04-03T11:57:36","date_gmt":"2007-04-03T15:57:36","guid":{"rendered":"http:\/\/www.prefblog.com\/?p=732"},"modified":"2007-04-03T11:57:36","modified_gmt":"2007-04-03T15:57:36","slug":"new-issue-canadian-utilities-460-perps","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=732","title":{"rendered":"New Issue : Canadian Utilities 4.60% Perps"},"content":{"rendered":"

Canadian Utilities has announced an issue of Cumulative (!) Redeemable Preferred Shares Series 1.<\/p>\n

Issue size is 4.6-million shares priced at $25.00 for gross proceeds of $115-million.<\/p>\n

Dividends are 4.60% per annum ($1.15), payable quarterly, cumulative (!), payable on the first day of March\/June\/September\/December. The initial dividend of $0.13863 will be paid on June 1, based on the anticipated closing date of April 18, 2007.<\/p>\n

The call schedule is:<\/p>\n

\n\n\n\n\n\n\n\n\n
CU 4.60% Redemptions<\/td>\n<\/tr>\n
From<\/td>\nTo<\/td>\nPrice<\/td>\n<\/tr>\n
2012-06-01<\/td>\n2013-5-31<\/td>\n$26.00<\/td>\n<\/tr>\n
2013-06-01<\/td>\n2014-05-31<\/td>\n25.75<\/td>\n<\/tr>\n
2014-06-01<\/td>\n2015-05-31<\/td>\n25.50<\/td>\n<\/tr>\n
2015-06-01<\/td>\n2016-05-31<\/td>\n25.25<\/td>\n<\/tr>\n
2016-06-01<\/td>\nInfinite Date<\/td>\n25.00<\/td>\n<\/tr>\n<\/table>\n<\/div>\n

These are rated at Pfd-2(high) by DBRS<\/a> and P-2 (high) by S&P<\/a>.<\/p>\n

The material I have indicates that the proceeds will be used to finance capital expenditures and for other general corporate purposes … but I wonder! CU.PR.T is currently callable at $25.00 with a dividend rate of $1.475 p.a. (issue size 2,277,675 according to the TSX<\/a>) and CU.PR.V is currently callable at $25.00 with a dividend rate of $1.325 p.a. (issue size 2,146,730 : ibid). I have previously complained<\/a> that these issues appear to be surviving due solely to regulatory boneheadism … but perhaps a ray of sunlight has penetrated Canadian capital markets. However, there is more boneheadism in heaven and earth than is dreamt of in my philosophy. We shall see.<\/p>\n

More later.<\/p>\n

Update<\/b> : DBRS<\/a> has confirmed on their site that the new issue is rated Pfd-2(high).<\/p>\n

Interestingly, they have a different understanding of the use of proceeds from the issue than the one I saw (my bolding):<\/p>\n

\n

The net proceeds of the Preferred Shares are expected to be used to finance capital expenditures, to repay existing indebtedness<\/b>, and for other general corporate purposes of CU Inc.\u2019s subsidiaries, ATCO Electric Ltd. and ATCO Gas and Pipelines Ltd.<\/p>\n<\/blockquote>\n

I don’t\u00a0think CU.PR.T & CU.PR.V will last very much longer. And, if you look at the issue sizes and account for underwriting fees of about\u00a03%, you might decide that “general corporate purposes” consist largely of buying a new pencil.\n<\/p>\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

Canadian Utilities has announced an issue of Cumulative (!) Redeemable Preferred Shares Series 1. Issue size is 4.6-million shares priced at $25.00 for gross proceeds of $115-million. Dividends are 4.60% per annum ($1.15), payable quarterly, …<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[17],"tags":[],"class_list":["post-732","post","type-post","status-publish","format-standard","hentry","category-new-issues"],"_links":{"self":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/732","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=732"}],"version-history":[{"count":0,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/732\/revisions"}],"wp:attachment":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=732"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=732"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=732"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}