Investment Q&A

Q: I bought these preferreds on issue in 2015 . For most of the time they have traded well below issue price . Recently they have recovered back to the issue price . would you still advise on holding these prefs

Q: Could you comment on the recent debenture financing BBTV just did. The terms seem a bit steep? Thanks

Kenn

Q: in a follow up to my question on the above which i asked yesterday and you quickly responded to there was an announcement last night regarding the dividend rate for the next 5 years...my question today is the news release says "If declared "...does this mean that they may still redeem the preferreds or am I to assume the prefs will live for another 5 years....and assuming BAM is successful in taking over BPY then these shares would become a liability of BAM providing a credit rating boost...Correct ??...please deduct whatever credits are applicable and thanking you in advance for your response...Cheers

Q: I am looking for some insight to help me understand how the market is currently pricing preferred shares. I had a position in CPD from 2015 to 2020 when I dumped it out of frustration. During that period it seemed that when interest rates were forecast to go up the preferreds would go down because investors would focus on the lower relative yields. If rates were forecast to drop the preferreds would still go down because then investors would focus on the reset aspect. It was an investment that provided the worst of both worlds!

I still hold a couple of preferreds including some fixed perpetuals such as POW.PR.D and RY.PR.P which despite everyone’s expectation of rising interest rates are both hitting new all-time highs now. It’s all just too perplexing for me. Any explanation?

Q: Hello 5i Team
Further to Cam’s question on June 01 regarding BPO.PR.C and related BPO.PR.N
Brookfield Office Properties announced (see Brookfield Property Partners website) at days end on June 01 the new reset dividend rate.
For the readers information, the reset rate is usually stipulated in the prospectus as being set at end of business day 30 days before the reset date. Some companies are very prompt in issuing news releases for preferred reset issues and some are not!
Why do you think Brookfield did not redeem the BPO.PR.C issue? At the new reset rate of 6.117 %, I would have thought BAM/BPY would have been able to raise debt at much lower rate, considering BAM raised debt at sub 3 % in April 2021. Or was this a case of in-opportune timing, with the preferred share issue being available for redemption prior to the closing of the BAM/BPY takeover?
Thanks

Q: I currently own some of these shares and am trying to find out if they are being called at the end of June when they are subject to the 5 year rate reset...are you able to tell me if an announcement to that effect has been made yet and if not provide a good website where I would be able to ....I monitor the BPY news releases but have seen nothing yet...the date of the meeting for BAM. to acquire BPY is after the reset date and not sure if a redemption call could be made prior to the meeting...any insights you could provide would be much appreciated...many thanks

Q: TRP.PR.J is being redeemed at the end of this month. I own share in this security. I would like to reinvest in another minimum rate reset preferred share. Can you provide some suggestions please?

Q: I noticed in yesterday’s questions this stock is being redeemed. I also own it but was unaware of the redemption. How do I find out other than after the fact. What preferred would you recommend as a replacement?

Thanks

Paul

Q: am a senior looking to invest for income with preservation of capital, do preferred EFT fill this requirement? already own CPD, looking at PGX for US exposure. what other names might fill this requirement

Q: TRP.PR.J is being redeemed at the end of this month. Are there any signs or warnings that a company may be redeeming their preferred shares? I would prefer not to invest in a particular preferred share if it is being redeemed in near future unless redemption is at a premium to current market value.

Q: Interesting to see one of the preferred shares ETF gaining 'interest' (pun intended) over the past year.
What is your outlook for preferred shares generally and would you step into this area?

Q: Peter,

TD just redeemed preferred TD.PF.G. What is your opinion of investing in preferreds with where we are in the interest rate game { ie I am assuming a slight slow gradual increase - TD must think the same thing }. I realize they are for income only and do you think rate resets are the way to go? . Please give me few recommendations.

Thank you

Paul

Q: What are your thoughts on DXP ETF or do you prefer another ETF. Preferred shares perform better in which environment.

Thanks for the great service.

Q: Hi Peter & 5i,
What do you think is the probability that Rogers forces Shaw to redeem these Preferred shares come June as per the purchase agreement?
I'm thinking it's almost 100%. If Rogers doesn't force the redemption then it would be an indication that Rogers is not sufficiently certain the deal will go through. And it's so early in the whole purchase process that the preferred share redemption almost has to happen?
Your thoughts please.

Q: I have paid very little attention to preferred shares until fairly recently. I understand that in the event of bankruptcy the owners of these shares place higher than common shares and that they have higher dividends. That's about it. What I don't understand is why BAM.A would be up 8.5% ytd but BAM.PF.X would be up over 30%. and BAM.PF.B would be up 23%. Is this sort of outperformance likely to continue?

Q: On a previous question, TD announced Friday that these preferred will be redeemed. Likely for any preferred with high Minimum reset, so do not count too much on them if rates stay low. No mention of a possible conversion.

Q: I currently hold TD Bank series 12 preferred shares (TD.PF.G) and they are coming up to a five year anniversary upon which they can be voluntarily converted to series 13 preferreds. The series 12 have an initial 5.5% payout and their first reset is another 5 years down the road at the 5 year Government of Canada rate + 4.66%. The series 13 preferreds have a floating quarterly rate of the 90 day T-Bill + 4.66%. With interest rates likely to rise would you recommend exercising the conversion privilege? Also, would you happen to know the trading symbol for the series 13 preferreds?

Q: Hi guys
I have a small portion (under 2%) of my portfolio in preferred shares (CPD and PPL.PR.M ). I bought these for a safe steady eady type of return but as you know investing in Preferred shares the last few years has felt like a roller coaster. For example PPL.PR.M is still $1 below where I bought it about 5 years ago, and has dropped to as low as $14. So I am wondering why not sell my preferred holdings and just buy more of a nice dividend stock like BCE where I am actually getting 6.2% yield - more than I am getting from my preferred? I know I am further down the chain if the company defaulted but I also get more upside. Your thoughts on selling my preferred holdings and buying some nice safe dividend stocks instead?

Thanks

Stuart

Q: This is a comment to your answer to Steven regarding the mentioned preferred share.
Present dividends is 6.75% minimum of 5.25%
The portfolio has a NAV of $ 19.98 which means that it can withstand about 50% drop of the portfolio before it affects the value of the preferred shares.
You have the option of redeeming your shares at $ 10 on December 2025. that compared to most regular preferred that the option is with the company not the holder.
It has performed much better than many perpetual preferred, that some of them lost half of their value even with interest rates going down.

Could you please explain how this is riskier than the perpetual preferred,

Thanks

Q: your opinion please and buy, sell or hold?