TRP.PR.C Closes Below Par on Heavy Volume

TransCanada Corp. has announced:

that it has completed its public offering of cumulative redeemable first preferred shares, series 5 (the “Series 5 Preferred Shares”). As the underwriters fully exercised their option to acquire an additional two million Series 5 Preferred Shares, the size of the offering increased to a total of 14 million shares resulting in gross proceeds of $350 million.

The offering was first announced on June 17, 2010 when TransCanada entered into an agreement with a syndicate of underwriters in Canada led by Scotia Capital Inc., RBC Capital Markets, and BMO Capital Markets.

The net proceeds of the offering will be used to partially fund capital projects, for general corporate purposes and to reduce short term indebtedness of TransCanada and its affiliates, which short term indebtedness was used to fund TransCanada’s capital program and for general corporate purposes.

TRP.PR.C traded 567,818 shares today in a range of 24.75-90 before closing at 24.83-88. This issue is a FixedReset, 4.40%+154, announced June 17.

Vital statistics are:

TRP.PR.C FixedReset YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2040-06-29
Maturity Price : 23.07
Evaluated at bid price : 24.83
Bid-YTW : 4.05 %

TRP.PR.C is tracked by HIMIPref™ and has been added to the FixedReset index.

10 Responses to “TRP.PR.C Closes Below Par on Heavy Volume”

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  6. fed says:

    Since this issue is currently trading at $13.50, and it resets at 154, could you consider it as resetting at 154*25/13.5= 285 for the purposes of a new investment?

    It seems to me that these low priced resets are a great deal right now, especially those with mid range resets that will likely not get called back.

  7. jiHymas says:

    For estimating the yield of FixedResets, I recommend you use the Yield Calculator for Resets: New and Improved!.

  8. fed says:

    I’ve gone through your spreadsheet before. For this purpose, I think it is a bit of an over complication. I am just wondering if I am missing anything by thinking about the reset in this way.

  9. jiHymas says:

    You’re missing the difference in dividend between the calculation date and the reset date. You’re also missing the effect of the relationship between the calculation date and the next ex-dividend date. Less importantly,you’re also using Current Yield which, although not the worst possible way to look at it, reduces comparability with bonds, etc.

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