Investment Q&A

Q: I hold these Brookfield Infrastructure preferred which currently pay 5% but reset March 31, 2023 at 6.642%. I can happily continue to hold these, but alternatively I have the option to convert them to Series 10 Preferred which will pay a floating Rate of 3% above the Government of Canada 3 month Treasury Bills, reset quarterly. This will be set for the first quarter to June 30 at 7.564%.

I suppose it's a gamble on what interest rates are likely to do over the next 5 years; but do you have any thoughts on which option I should choose?

Q: HI! I received some of these shares with one of the Brookfield changes. What would your thoughts be on buy/ sell or hold? Yield is quite good. Thanks

Q: ENB.PF.A:CA is down about 17% in a year and ENB about 14%. The % dividend from ENB is slightly higher. Is there any compelled reason to go with ENB.PF.A:CA over ENB?

Q: Couple of days ago you listed some preferred shares that you like. As they are perpetual, and not rate reset, will the yield vary from what they are at now? When can the issuers change the rate?
Thank you

Q: Hi Peter,

On January 10, you were asked a question about Loblaw Preferred Stock (L.PR.B). I really appreciated the relevance of your comments (a net benefit of being a 5i member) and bought it for the income. My question is, do you know of any other perpetual preferred shares that meet the same definition as what you stated (of all the preferred shares out there like this: (Of all the preferreds out there, this would be in our 'no need to worry' category, easily).

Thank you

Q: I own some of the above preferred shares which reset on April 30/23. If Artis REIT does not call the preferred they reset at 5 year GOC (currently 3.454%) plus 3.93% or about 7.38% . Alternatively, I can covert to the floating rate of 90 day t-bills (currently 4.7%) plus 3.93%. or about 8.63%. I noticed not many preferred with the option to convert to floating rate are successful as they normally require a minimum number of shares . Is there a reason? Are t-bills rates more volatile than GOC rates? Any recommendations?

Q: HI, your though about this ETF
thanks
jean guy

Q: I am interested in adding this preferred to my TFSA. Are there any particular issues that I should I be aware of? DBS gave them a rating of pfd-2 which I understand is an investment grade preferred. I didnt notice an end date to these preferreds.

Thanks, Len

Q: These two preferred are going to be reset next month. Is a conversion from BCE.PC to BCE.PD, or the reverse, tax-free if we choose to do so?

I was very successful in the last 2 years with the BCE.PD floating shares, but would it be wise to let them go and convert to the fixed-reset at this moment of plateauing interest rates? I guess it could depend on the new rates which will be determined on Feb06.

Thanks to the team.

Q: I hold convertible debentures from Invesque IVQ.DB.V, maturing 30 Sept of this year, but which are only trading at 80 cents on the dollar. This seems to indicate that there is a substantial risk of default. In your opinion will I get my principal back or will I be given newly-issued and hence highly diluted IVQ shares? Thanks!

Q: Hi 5i,
Sorry for all the preferred share questions but I'm having problems finding US based fixed rate perpetual and if possible cumulative preferred shares. The ones above are on my buy list can you name three more preferably in other sectors that have high to highest ratings or are unlikely to default. I still have memories of 2008 with the CDOs fiasco so like diversification if possible. Thanks for your service.

Q: Hi. I’ve held Corby since April 2020 and did some profit taking in April when it was trading in the high $19’s; and added to PBH which was trading down.

I’d purchased Corby for safety/stability and reliable income. The dividend is variable and occasionally fluctuates. It has a low beta and has held up well until recently; as I suspect that many investors are seeking better opportunistic for growth.

I’’m considering selling Corby and moving to Loblaw’s Perpetual Preferred for largely the same reason I’d purchased Corby, for safety/reliable income with a lower beta and somewhat higher dividend. It is currently trading at $23.00. As interest rates fall, I can see where there will be some modest growth in addition to a relatively safe dividend. I’m considering L.PR in order to maintain my sector allocation.

In 5i’s view would this trade make sense, or would I be better off “staying the course” on Corby? I currently don’t have any preferred shares. My holdings in the Staples Sector are Corby, Northwest Company and Premium Brands.

Are there any other Staples Preferred shares (either rate reset or perpetual) that you feel are more attractive?

Thanks!

Q: 5i,
Further to Kim's question on Jan 11.

Does adding all the debt for the "go private" not affect the security of the Pref?

Will Cannacord, the company, eventually end up with the debt or will the buy-out shareholders be responsible for the debt?

Thanks,
John

Q: I'm looking at my legacy pile of preferred shares of which I have never been fond and wondering if this isn't a good time to sell and invest in a bond ETF such as XHY. I know you have expressed ambivalence about prefs but have also said in better times the class can do better. However, yields are roughly comparable, I can use the loses and invest the proceeds in XHY or a different bond fund which you might suggest, keeping the investment on the fixed income side of the page, Many thanks. al

Q: Hi 5i, looking to buy one of these Brookfield perpetuals. they all have approx. the same dividend. I like the liquidity of M but cant tell if one of them is cumulative. Can you help me out and rank them. Thanks

Q: I hold some Canaccord Genuity Group preferred shares. Canaccord announced a few days ago that they are looking at taking the company private. But the offer is only for the common shares and not for the preferred shares. It sounds like the company will delist their common shares from the TSX, but its preferred shares will continue to be listed. Should I be worried about this? Thanks.

Q: Hi 5i, I currently own Loblaw preferred and like the fact it’s in the food industry decent dividend and us perpetual. It also trades below $25 which I like. What I don’t like is the PFD-3 rating. Should I have any concerns here and what are your thoughts on this preferred.

Q: Hi 5i happy new year! I believe its time to step into US perpetual preferred shares due to interest rates. I'm having problems finding these and I'm hoping you can help. Quality needs to be high to the highest as this is for my retirement. I am an advocate of diversification so please if you can have a few stable sectors listed, thanks!

Q: The yield on these preferreds is appealing. Can you please highlight all of the risks. Thank you.

Q: Just a follow up to my previous question on the above. I checked with Quadravest and I can tender my preferred at the lesser of $10.00 or the NAV if it's less than $10.00 on December 1/24. According to the last NAV of $15.62 we have 56% downward protection. Given that it holds the 15 biggest companies on the TSX with dividends would you agree that it would be a fairly safe investment with a 9.8% return over the remaining 23 months to maturity?