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Investment Q&A

Not investment advice or solicitation to buy/sell securities. Do your own due diligence and/or consult an advisor.

Q: Good morning
I purchased TD preferred rate reset shares TD.PF.G at $25 par in the IPO just over a year ago. The shares now trade at about $27. The initial dividend was set at 5.5% until April 30 2021 at which date either the shares will be redeemed at par or the dividend reset at the 5 year Bank of Canada rate plus 4.66%. The renewal rate seems to be quite high so I suspect the shares will be redeemed in 2021. If that is the case, the yield to maturity is approximately 3.1%, so I am considering selling and moving on. Is this analysis flawed?
David
Read Answer Asked by David on June 16, 2017
Q: They are offering convertible debentures paying 5.25% - attractive since I think by 2024 ALC could be much higher than $13. However, the conversion is at more tan $20 per share. The extra security would mean giving up more than 50% upside. Does this seem an usually high conversion price? Do you think it is an attractive offering?
Read Answer Asked by John on June 02, 2017
Q: Would you mind commenting $75 million covertible debenture issue. I think the market likes the issue. It appears the new debenture will be replacing an expiring debenture at a lower interest rate so I suppose that should be good for the company's bottom line. The news release states the conversion price is $21.15 per share. Pardon my ignorance but how exactly does the conversion work? Does a debenture act in a similar fashion to a bond? If interest rates go up does the price of debenture go down? How would the debenture act in effect of a market crash?
Thank you,
Jim
Read Answer Asked by James on June 02, 2017
Q: For portfolio weighting purposes do I include preferred shares in fixed income or equity? Is it also necessary to further break out pref shares as to the industry they are in or is credit worthiness the primary concern? In other words, if 10% of my total portfolio is in financial pref shares, and I also have 15% of my equities in financials, should I then consider myself to hold 25% financials and thus be overweight?

Thanks for your help.

Paul F.
Read Answer Asked by Paul on May 29, 2017
Q: General question regarding preferred shares. Looking at Aimia series 3, they have a call/ reset date of March 2019 reset is 5year GoC +4 %. Does the company, at that time have 2 choices, either recall and pay out par value or roll them over at the new rate?

Thanks
Auftar
Read Answer Asked by auftar on May 24, 2017
Q: Just a comment and clarification on Stevens Qs: I am surprised the 6.25% minimum ECN preferred share financing is still open as it's only $100M. Does this reflect badly on the issue? I thought a 6.25% guaranteed minimum was a good buy even if rates eventually rise.
Thanks.

--- The issue was closed the same day at TD and the issue has been completed yesterday as per mail from TDW.

Issue Completed - ECN Capital Corp. 6.25% Cumulative Rate Reset Preferred Shares, Series C

I also see that they have taken the money from my account for shares allocated.
Read Answer Asked by Mayur on May 19, 2017
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