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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: Most if not all of the convertible bonds offering I have seen, the conversion price is at a premium to the trading price of the stock. This one is somehow unique. Can you please explain why? If I am holding the shares in a registered account wouldn't be better to hold the convertible instead (more secure and higher distribution at least for now)? Would this situation encourage arbitrage, buying the convertible and selling the stock short driving the stock price down? Do you expect that this bond to sell at a premium to the stock as soon as it hits the market?

Thanks
Read Answer Asked by Saad on February 10, 2016
Q: 6:42 PM 2/9/2016
Hello Peter
Could you please comment on the Algonquin Power takeover of Empire Electric in Missouri. The deal looks very interesting to me. Algonquin are simultaneously offering 5.00% Convertible Debentures - Instalment Receipts. The Conversion price is $10.60 well below the closing price of the shares yesterday $11.54.
Could you answer these questions for me and comment on the Company and on the Debenture issue.

1. It seems very surprising to have the conversion price LESS than the market price. Why?
2. Would you prefer the Debentures or the Common shares for steady income.
3. Will the common shares trade down to the conversion price on open Feb 10th?
Many thanks.......... Paul K
Read Answer Asked by Paul on February 10, 2016
Q: Prefs make up about 5% of my holdings. Most are solid, however
I am underwater on CSE.PR.A and AZP.PR.A and am looking at selling to offset gains elsewhere.
Could you make a suggestion(s) as to a good and somewhat similar home for the proceeds?
I was thinking about CSE and/or AQN. ( My feeling is CSE is a a bit of a dice roll on a deal getting done)
I hold BEP.UN in a registered account, but am light on utilities otherwise.
Thank You.
Read Answer Asked by Tim on December 03, 2015
Q: Hi 5i,
I need help trimming back the utilities in my portfolio. I currently hold 11 utilities (out of 33 holdings):

AQN,
ALA,
BIP.UN,
BEP.UN,
CU,
FTS,
GEI,
IPL,
PPL,
RNW,
VNR

All have gone up quite a bit since buying them so I have fallen in love with them all. I already sold EMA, TRP, and KEY (and cried like a baby). Utilities make up about 30% of the value of the portfolio (and that is not including BCE and T). I am worried that rising rates will hit me hard. Which do you recommend I cut?? My primary goal is for dividend growth.

Thanks in advance!

Read Answer Asked by Wayne on April 10, 2015
Q: Hi guys, and happy New Years.
A couple of recent guests on BNN have expressed the opinion that utilities are not the place to be in the new year. What do you think? And if utilities are expected to lag, will the go-to sector be tech and biotech or something else? I'm asking with respect to utilities in general as I own XLU, and also specifically about AQN.
Read Answer Asked by John on January 02, 2015
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