There is plenty of discussion going on throughout the site on various Canadian securities so this post is for creation of a “Canadian Discussion” page.
This was requested by a reader and it is easy to do so we can do it quickly.
Hopefully this will be a page for those with Canadian interest will meet up.
Tax question. I am US citizen and this was my first year owning ENB preferred that I bought on Canadian exchange through Interactive Brokers. I got form NR4 from Canada related to that income. But as I understand that income was already included with IB 1099 form (at least I see there the right amount of foreign income tax paid – I don’t have another security on this account that causes foreign taxation). Am I right and if so what should I do with this form?Thank you!
Never gotten a NR-4. Suppose it is Non Resident. I get all consolidated on 1099-DIV. Try a Google add Canada to the search?
FRR BIK.PR.A (5.89% min) should reset today at 7.59% on par. Think even odds on a call since parent BN Fin just floated a big bond issue.
FRR BN.PF.B should reset at 6.26% on par. Call?
This time next month FRR TRP.PR.D, 5 GOC + 2.38 can still be bot for CN$17.91. on today’s 5GOC = 8.39% . 2L DBRS. Splitting company into Oily and Gassy, no details on who will retain what fin issues, but playing a quality long term management game. No reply from management on this issue.
I doubt BN.PF.B will be called. It will pay less than the PN.PF.J series that won’t reset until January of 28. I may sell some of mine and grab more BN.PF.K (floating rate) which look more attractive than the Series 35 owners of BN.PF.B have the option to convert into.
Instead Brookfield will buy some on the open market. [https://bn.brookfield.com/press-releases/brookfield-corporation-announces-renewal-normal-course-issuer-bid-preferred-shares]
RY-S has just reset for 5 years. It’s current yield is 6.5%, vs. 5.5% for the perpetuals and at least 2% more than any other 5 year RY reset, for the time being. Hoping this gets noticed!
Was not RY-S called November 13, 2017? Am I confused with a Canadian symbol?
Several of the Brookfield Corporation Preferred Shares look good to me.
[https://bn.brookfield.com/stock-distributions/preferred-shares]
These currently make up 4-5% of my portfolio.
These are not the business-unit prefs like “Brookfield Infrastructure” or “Brookfield Property Partners.” They are the core corporation shares.
BN.PF.K currently has a 11% yield. It is a floating rate, but if the prime rate goes down, it probably means preferreds as a class are going up in value.
My investment thesis is that interest rates are going to stay higher for longer, and if that remains true then BN.PF.E is quite attractive as it has a 5-year reset coming up in 14 months.
Just for FYI – Fairfax Financial (often noted as being a CDN version of Berkshire Hathaway) was hit by a short report from Muddy Waters yesterday and common shares dropped over 10%. Of note the pref shares also dropped appx 3-4 % if anyone is looking for a trade. I hold no shares of either as have been looking more at CDN blue chip commons with higher yields for purpose of both income and growth. See this morning ENB released good quarterly results and common is yielding over 7% / Happy Friday !
Buck, Holding the preferred listed on the NYSE I noticed people sold into the earnings report. Have to see if that was the high. With the 5yr resets just holding for the income.
As a complete aside, I have owned 01959EAC2 Allied World 4.35% 10/29/25 for a long time bot thru Fidelity. trades in USD… It’s a major sub of Fairfax and rated equivalently but I don’t remember if it’s officially now guaranteed…. It still trades slightly cheaper than Fairfax debt, but the point is that even though I bot this at Fido and it trades daily in the market, I no longer can buy or sell at Fido online…. I suppose I could do either by calling in but that would mean being able to do nothing more than selling on the bid or buying on the offer….. I don’t know why the change and am quite certain I’d get a made up answer if I asked..
2WR I am going to assume you planned to hold to maturity anyway?
correct, Charles – There was a long time when the spread between this and Fairfax debt was much wider than now and I wanted to add, but not really interested in selling……I’ve got way too much sidelined cash already
BPO resets…
For the brave few that bought them last month…
https://x.com/chrisinmontreal/status/1753178549626769567?s=46&t=3Y9i1Va5ZzPQa4_CnI-nfg
https://youtu.be/WqHQ_wWbG9Y?si=ZDl6lFzYd1izrDwP
could go in common stock discussion but is a CA company, Gibson Energy CA:GEI USOTC: GBNXF infrastructure/oil terminals/storage/Canada/Tx..yield is about 7.6%, pays quarterly, bot in RothIRA, no tax w/held on divs, payout ratio is about 61% lower than usual and what they like (they just did an acquisition in TX) .. not the ‘usual’ name you hear about (TRP, PBA, ENB, Keyera) ..there is a review by Investment Doctor on SA on it, not a recommendation/DYODD/ last presentation if interested. Bea https://www.gibsonenergy.com/wp-content/uploads/2023/12/December-Investor-Presentation-11.30.2023.pdf
PWF preferred T will not be redeemed and will reset at 5 Yr + 2.37%, per the company. Holders have the option to convert to a 3mo floating rate, series U, with the same spread. There are 8M preferreds outstanding and 1M of conversions is the minimum required for the company to take action.
What do you think the chances of conversion are in this case? I noticed that the implied current yield for series U is about 9.3%, which is somewhat less than another floating rate issue for the same company (PWF-Q), while the implied current yield of the reset 5 year Series T is considerably more than the perpetuals. Based on this, I have decided not to convert. In fact, the series T seems to be a good buy here. Anyone with relevant information/analysis about this situation, please chime in.
hi John
is series T traded on the US markets as I cannot locate that series on the TSX for PWF?
https://www.otcmarkets.com/stock/PWFNF/overview
OTC markets lists the T preferred as PWFNF, I believe.
JFO: You are on track with your thinking, don’t convert. I bot about 6mos ago at 18.77 willing to collect the lower coupon twice and take the reset for 5 more years. Should = about 7.2% (at 5GOC = 3.1? , of course I was hoping for higher 5GOC) and mow moving into a declining int rate environ. I have had to shift now after three years of accumulation of a large pooled ladder of these FRRs to now culling and looking out to an opp to take gains. I see the trend for these is now subsiding, but the “Dot Plot” has never been historically accurate in it’s “guidance”. l’ll see how it falls out, but consistent income has been my retirement shift focus. Even the Loonie is beginning to revert. The compounding has worked as a methodical tool and now the next management step. The increasing rates have been v nice and will bid out nicely in the future if I choose to take it. Only weak point with this security is it = NVCC (research: NonViability Contingent Capital).
The Best, JA
As I understand it, only the banks are NVCC. Don’t even think PWF is an insurance perp, as it issued out of a holding company – and not the insurance corp. they own.
Actually one potential (although unlikely) upside to CDN insurance prefs. is that they would be deemed inadequate by their regulators, and they would be forced to redeem them and issue something like restricted Tier1 in Europe (with NVCC features….)
But please correct me if I’m wrong….
Bob in DE was someone who commented frequently here in the past and maintained a spreadsheet with tons of useful data on CDN prefs. He made it publicly accessible on Google Sheets.
Anyone know if he’s still maintaining that and if there’s a public link?
Landlord – haven’t seen him in quite a while. I did take a copy of his sheet, but don’t know if it is worth anything–that was quite a while ago and I haven’t updated the sheet etc.
Landlord have you just asked him?
He just commented on Altgas preferred article ( by canadian income investor)
Good idea! I’ll reach out to him and if I get, will post here with his permission.
(https://canadianpreferredshares.ca) still works for me.
Thanks Howard
https://seekingalpha.com/article/4655638-brookfield-renewable-preferred-offers-yield-fantastic-value
just noticed this article on SA this morning regarding BEP pref issues trading on TSX . Myself been more inclined to purchase some CDN blue chip common stock yielding around 6 % with growth potential too. (pipelines, banks even looking at HY restaurant income trusts)
Canuck I don’t want to get into heated arguments over renewable energy, just that outside Hydro I don’t think wind and solar projects are as long lived as hydro and require large investments to build and maintain. Without government funding or tax breaks I think they need constant influx’s of money so when I hear renewable and investment I think short term and haven’t convinced myself to invest.
Charles,
With respect to the wind power, I have been surprised about the term repower. BEP recently purchased an existing wind farm in Oregon and proceeded to update the turbines over time (and referred to it as repower). The return on investment was excellent as the wind farm was generating income while they were doing the update.
I think wind power is here to stay.
BEP is one of my largest holdings and I’m adding to my small position in BEPH on dips.
I’m new to these Canadian preferreds.
On the face of it, they seem to be much better deals than the US preferreds at the moment. Is this always the case?
No
ALA.PR.E (Reset 12-31-2023) prob called with bond issue being floated.
I sold at just below par today, up 12+% on news, total on hold of 25.2%, bot 01-20. A long hold thru ZIRP, but collected 6.8% while waiting for the reset announcement end Nov 23. That account has just been for compounding anyway.
I have liked the more formulaic method of fixed income investing rather than the Cult of the Equity which I was lucky to survive with capital in tact. Probably mostly LUCK!! I wish I had turned to the No Drama Income approach a long time ago. This site helped me learn and unlearn alot. Cheers to One and All!
Nice to have decent gains to balance some cumulative repositioning losses this year.
Very interesting situation with TRP, IG rating 2L (DBRS), prefs:
Series 1 and 2, Series 3 and 4, Series 5 and 6: Odd numbered the reset (FRR) and eved numbered the floating. in the pair. Yes these are paired for conversion, “The conversion right entitles holders to elect periodically which of the two series they wish to hold and does not entitle holders to receive a different class or type of securities.”
Even if rates revert to ZERO over time, the current prices are reflecting quite a decent return, esp on the buy the floating issue now and wait to convert to FRR on the dates stated in the prospectus. If rates stay up, then all the better. Don’t miss the conversion window in the future.
Please DYODD and you may be very surprised at how much these are ignored.
A bit of a puzzle for those with access to CAD accounts.
Enbridge Provides Notice of Series N Preferred Shares Conversion Right and Announces Reset Dividend Rates
CALGARY, AB, Nov. 1, 2023 /CNW/ – Enbridge Inc. (TSX: ENB) (NYSE: ENB) (Enbridge or the Company) announced today that it does not intend to exercise its right to redeem its currently outstanding Cumulative Redeemable Preference Shares, Series N (Series N Shares) (TSX: ENB.PR.N) on December 1, 2023. As a result, subject to certain conditions, the holders of the Series N Shares have the right to convert all or part of their Series N Shares on a one-for-one basis into Cumulative Redeemable Preference Shares, Series O of Enbridge (Series O Shares) on December 1, 2023. Holders who do not exercise their right to convert their Series N Shares into Series O Shares will retain their Series N Shares.
The foregoing conversion right is subject to the conditions that: (i) if Enbridge determines that there would be less than 1,000,000 Series N Shares outstanding after December 1, 2023, then all remaining Series N Shares will automatically be converted into Series O Shares on a one-for-one basis on December 1, 2023; and (ii) alternatively, if Enbridge determines that there would be less than 1,000,000 Series O Shares outstanding after December 1, 2023, no Series N Shares will be converted into Series O Shares. There are currently 18,000,000 Series N Shares outstanding.
With respect to any Series N Shares that remain outstanding after December 1, 2023, holders thereof will be entitled to receive quarterly fixed cumulative preferential cash dividends, as and when declared by the Board of Directors of Enbridge. The new annual dividend rate applicable to the Series N Shares for the five-year period commencing on December 1, 2023 to, but excluding, December 1, 2028 will be 6.696 percent, being equal to the five-year Government of Canada bond yield of 4.046 percent determined as of today plus 2.65 percent in accordance with the terms of the Series N Shares.
With respect to any Series O Shares that may be issued on December 1, 2023, holders thereof will be entitled to receive quarterly floating rate cumulative preferential cash dividends, as and when declared by the Board of Directors of Enbridge. The dividend rate applicable to the Series O Shares for the three-month floating rate period commencing on December 1, 2023 to, but excluding, March 1, 2024 will be 1.94183 percent, based on the annual rate on three month Government of Canada treasury bills for the most recent treasury bills auction of 5.16 percent plus 2.65 percent in accordance with the terms of the Series O Shares (the Floating Quarterly Dividend Rate). The Floating Quarterly Dividend Rate will be reset every quarter.
Beneficial holders of Series N Shares who wish to exercise their right of conversion during the conversion period, which runs from November 1, 2023 until 5:00 p.m. (EST) on November 16, 2023, should communicate as soon as possible with their broker or other intermediary for more information. It is recommended that this be done well in advance of the deadline in order to provide the broker or other intermediary time to complete the necessary steps. Any notices received after this deadline will not be valid.
2WR I don’t own this, but right now I am satisfied with locking in 5yr resets.
Gives us plenty of time to see what happens with rates in the future.
Do not convert, the minimum will prob not be met anyway. FRRs have done their job by adjusting for inflation = 31% increase in this case. Even at today’s price !!!!!! 9+%.
See link in this tweet for candian Preferreds sorted by category.
https://x.com/konekoresearch/status/1716608987972448727?s=46&t=3Y9i1Va5ZzPQa4_CnI-nfg
Thank you Maine,
How do I get updates on this list?
Hey Charles.
Unfortunately, I think that was a one time freebie link.
I’ll let you know if I find a way to get updates.
It’s a great list Maine to work off. Lot of insurance companies.
ENB.PR.N will reset rate tomorrow…still at CAD18.19, looking at 9.2% . Why hold the common? They just added a few million utility customers and are vertically integrated to supply them. A nice, boring yawn play.
Joel, I like your approach here, but are you sure about the reset date? Prospectus says “The dividend rate in respect of the Series N Shares will reset on December 1, 2018 and every five years thereafter.”
The effective date is 12/1 but it’s determined a month in advance
Many thanks for the clarification. I am fairly new to Canadian prefereds with a recently started position in ENB.PR.V …
What have people been nibbling on?
I have been buying Emera C, EMA.PR.C
It is a $1.61 annual dividend until its next reset on august 2028.
It resets at the Canadian 5 year + 2.65%.
At the current price of $18.7 Canadian, it yields 8.6%, and that doesn’t factor in the accrued divvy. Ex div is Oct 31st.
Just to clarify, it has 4 quarterly dividends that add up to a total annual dividend of $1.61.
😉
Maine,
Very nice suggestion and I’ve begun a small position.
I think BIPI is worth a look.
I have a GTC order to add to my position. It’s a perpetual for BIP that pays 8.25% QDI.
Greg,
Well, the sellers won’t stop.
That’s ok.
I’ll take their offerings 🙂
Maine, I rentered Canadian Utilities Series DD at $11.69 USD today. Right at 7% plus going exD in a couple days. This is a fixed rate issuance though.
With sudden drop in price of EBBGF, it could be an attractive time to buy. However, does anyone know why the sudden drop? It could be because the preferred recently reset and people project much higher interest rates over the next few years, but the drop seems overdone.
Eugene, These large movements may cause your stomach to drop, buy if you have confidence in the company it might be an opportunity to add to your position or go overweight to hold some for flipping.
Eugene, Picked some up yesterday at 18.67 for almost a 9% yield. Today FTRSF is on sale at 13.24, gonna try to scoop some of that up. With a 5 year fixed rate that works out to about 8.4%
Does EBBNF have a provision for payment deferrals? I can’t find prospectus and I want to compare to recently issued ENB preferred (8.5% and 8.25%) that are traded as bonds.
https://www.enbridge.com/-/media/Enb/Documents/Investor-Relations/2012/2012_ENB_ProspectusPrefSeriesL_Eng.pdf?rev=042bbd6a3a174b7fbca06329c5d3ac0c&hash=250C5573F926D5B0DED6C47550226EA2
TSE:BN.pf.k (Brookfield)
Picked up a full boat for me anyways of this issue. Monthly payer, Floats @ PRIME Rate (7.2%), Large discount $14.76 ($22 redemption). DBRS Rating P-2L.
Other than disenfranchised Brookfield take out / over victims is their something wrong with this issue?
BN may be doing OK, but you might want to take a look at this analysis of BIP:
https://dfresearch.substack.com/api/v1/file/66530f7b-22e2-40df-bf90-d20701e3dbcc.pdf
The Enbridge 5 Year resets are on sale today.
I’ve been adding to my current position in Enbridge Series 1 Preferred shares (EBBGF on the OTC and ENB.PR.V on the TMX) at a price of $19.71 and a yield of 8.5%. This one is priced in US currency and is a perpetual that just reset for five years.
it is either perpetual or 5 y. reset. Perpetuals NEVER “reset”
Art,
The Canadian issues from ENB are based on the 5 Yr treasury and reset every five years. They do not have a maturity date established (so I see them as a perpetual).
ENB has three of these 5 year resets that are in US currency and EBBGF in particular is worth a look.
DYODD
Greg, I had an open bid hit yesterday and picked up 250 shares from 19.31 to 19.40 range. I believe there is still a future for oil and ENB seems to be moving more and more into the utility sector.
moved my GTC down and picked up another 250 shares of EBBNF at 17.75 Fri.
Charles
Excellent.
I also added to my Enbridge preferred this week. EBBGF @ $19.43
and a yield of 8.63%
One up on that, 19.31 to 19 .40 going to have to grit my teeth on both of these as I think they are going lower over investors fears of the deal with Dominion.
Sometimes you have to hold your nose and dive into the pool.
I am confident things will go well with the Dominion acquisition as they are very successful with a similar business in Ontario. They paid a fair price for an excellent business.
Greg, who’s afraid of the boogeyman? I tee’d up a bunch of low ball GTC bids today. Everything from some going x-dividend this coming Friday all the way out to Nov.
If they don’t hit 3 days before x-dividend I’ll review to see how strong the demand is for that stock. Some I will probably cancel the order especially if they don’t hit. If the stock is in a downtrend it could drop farther after x-dividend date. If I feel good about the stock I’ll watch the trend and see if it forms a bottom and put in another GTC before the next dividend date.
What’s the relationship between EBBx preferred issues and the preferred issues listed at
https://www.enbridge.com/investment-center/stock-and-dividend-information/preferred-hybrid-shares?
For example, is EBBGF an OTC equivalent of some ENB.PR.x traded on TSX?
You probably mean EBGEF, right? The ENB site lists only the symbols as they trade on Toronto Stock Exchange… So what they show as SERIES 5 and ENB.PF.V. The symbol is the identical vehicle as EBGEF as described on quantumonline for example….. Paying attention to the tsx price is a good idea even if you don’t have access to it because it’s the more actively traded issue.
Looking at Bur’s Chart which is showing dividend’s only I see the Preferred G had one payment in the chart at .43 since the G just rolled over to a new rate for the next 5yrs I am going to say that is the EBBGF
I have started to change my strategy. Rates can stay lower for a lot longer then anyone would expect them to as we have seen the last 20 yrs, but higher rates don’t last for longer like lower rates do. At least to my thinking.
Playing the long game, I am looking at floating to fixed that are locked into a higher rate for longer and fixed to floating with higher reset rates like HTLFP
The risk I run there is these will probably be the first ones the issuing company will call
Hello Bur
I focus on the three Enbridge preferreds that are priced and pay in US currency. They are perpetual and the dividend resets every five years.
OTC TMX Terms Reset date
EBGEF ENB.PF.V US 5 YR +2.82% 3/1/24
EBBGF ENB.PR.V US 5 YR+3.14% 3/1/25
EBBNF ENB.PF.U US 5 YR+3.15% 3/2/24
I have positions in the EBBGF and EBBNF currently and I strongly suggest logging into the TMX site as they have current trade prices. I purchase them in the OTC and pay ~7 to TD Ameritrade (Schwab) for the transaction.
These are great investments as you have investment grade debt paying ~8% QDI interest. Note, the income is Canadian and there is a witholding of 15% in taxable accounts.
Greg – I think your reset dates are wrong on EBBGF and EBBNF EBBNF = 9/1/27 and currently is 5.8579% and EBBGF = 6/1/28 with current coupon 6.7037%. EBGEF’s current coupon = 5.3753%.
My point was: the terminology was wrong and irreconcilable. “perpetual” (in context of pref. stock) is a Term of Art; namely, it has a specific meaning- those are shares which pay a set dividend rate in perpetuity (the issuer can redeem for $25 with a [usually] 90 day notice). In contrast to “Perpetual” there are “Reset” Pref. Stock, mostly for 5 y. term based on 5y. Gov. Bond (there are also 3m. Floating, etc). :))) Here is the list of current CAD perpetuals https://canadianpreferredshares.ca/rank-perpetual-preferred-shares-by-yield/
I dont believe your assessment is correct.
Just within seconds of an admitted weak memory here are two I recall that directly refute that.
https://www.sec.gov/Archives/edgar/data/1323468/000104746918005363/a2236383z424b5.htm
https://www.sec.gov/Archives/edgar/data/1110805/000119312516771874/d292922d424b5.htm
In fact on CAD side one can see an example as the fixed “perpetuals” are actually addressed in title as “cumulative redeemable”.
https://www.canadianutilities.com/content/dam/web/canadian-utilities/investors/cu-inc-prospectus-cumulative-redeemable-preferred-shares-series-1.pdf
Here is another.
https://www.fortisinc.com/docs/default-source/finance-regulatory-reports/prospectuses/2006-09-20-prefseriesf_prospectus_english.pdf?sfvrsn=710a6a98_2
While looking on US side, one can see DUK-A titled as a “redeemable perpetual”
https://www.sec.gov/Archives/edgar/data/1326160/000104746919001620/a2238219z424b5.htm
While you will have to dig deeper than I can to ever find the perpetual word mentioned in fixed ETI-, however.
https://www.sec.gov/Archives/edgar/data/1427437/000006598419000277/d752489d424b21.htm
There is no uniform consistency to the use of the term. As a couple prospectus shown above indicate, perpetual can be redeemable. A floating can be perpetual yet redeemable. And a fixed can be redeemable without any mention of the word perpetual.
Also my experiences indicate redemption notices are typically 30-60 day windows, not 90. This applies to US and Canadian ones I have viewed anyways.
Now issues such as SOCGM, SOCGP, PCG-A etc. may be presented as perpetuals, since they are flat out noncallables. But I am not digging into something 70 years ago to find the prospectus of those issues.
Art, I tried to post a long detailed explanation showing how you are not correct. However it disappeared for some unexplained reason. Im too lazy to repeat it all so I will just give you two examples that clearly refute there being any sort of “correct” “terminologies”.
Here are two examples off the top of my heading that show redeemable fix to floats as being officially described as “perpetuals” per prospectus.
https://www.sec.gov/Archives/edgar/data/1323468/000104746918005363/a2236383z424b5.htm
https://www.sec.gov/Archives/edgar/data/1110805/000119312516771874/d292922d424b5.htm
DUK-A mentions “perpetual” in its fixed rate prospectus. But I failed to find the word mentioned at all in fixed rate ETI-, instead the just the word “redeemable”. Also several of the fixed rate Canadian preferreds I am familiar with don’t ever mention “perpetual”, just redeemable.
So the word “perpetual” isnt an official terminology word in terms of defining what type of issue it is. As the listed above examples show.
Here is a Canadian fixed issue. I fail to see the word perpetual anywhere. Just redemption and redeemable.
https://www.fortisinc.com/docs/default-source/finance-regulatory-reports/prospectuses/2006-09-20-prefseriesf_prospectus_english.pdf?sfvrsn=710a6a98_2
Sorry Grid – it went into ‘moderation’ for some reason–I just approved it.
Just to stir the pot a little:
Decades ago when I handled these kinds of docs (for US issues – I didn’t do Canucks), our standard was that “perpetual” meant that an issue didn’t have a fixed call date (as opposed to a “term” issue). An issue could be redeemable and still be perpetual (the issuer could redeem it, but didn’t have to). the term had nothing to do with payments.
However, that was just in our tiny corner where I had a pedantic boss.
Private, I believe that is the customary interpretation most share.
In simple terms Art, perpetual means no maturity date. It does not take on a different meaning if it is CAD, or a reset, or preferred, or a BB, or a …
do i even want to wade in here?…/s
perpetual/fixed/floating and reset all mean different things, and especially with the word perpetual, it can mean different things to different people, as other countries allow perpetual debt, but the US doesn’t, so there are a few securities issued by entities in other countries that are considered debt in that country but considered equity to a US investor
But the terms perpetual and reset/floating are used to describe different things.
One is the term, and one is the determination of the payment.
It definitely doesnt mean what Art thinks it does. Its not the word to fall on ones Pedantic sword over. You clearly can find the word perpetual in words with different payment methods (fixed, floating…DUK-A, GLP-A). There is no fomal preferred word salad ettique that “perpetual” resides under. As most fixed rate issues are distinctly describes as “redeemable” . Also FWIW, I would suggest Art is also incorrect on the 90 day redemption notice based on my readings anyways over the years. Most I see are pretty standard 30-60 days notice window. But another largely pedantic issue being most of us dont own any of our issues anyways and never recieve the direct notices to begin with.
I had to look up “Pedantic”
Its a cool word isnt it, Alpha. Now for the next month be pedantic non stop to your wife and see how far that gets ya!
Ha! We tend to get to the point, so I’d probably be able to pull it off for 90 seconds.
I was once on a time-sensitive project in our home office when she came by and started telling me a longish tale about something. I interrupted and asked her in guy-talk to bullet point the conversation. You know what happened next.
She’s since re-retold the story many times to friends and family with hands in the air and an incredulous expression. We laugh harder every time.
The male and female of the species. We both have our quirks. I have never figured out how a person can spend so much time on the phone and talk about trivial things for an hour.
Are Enbridge preferred dividends qualified? Quantum says no, but brokerages (I think) report as qualified. Thanks for comments
Eugene, My issue right now is with one of my brokers who keeps withholding Canadian taxes on my Enbridge holdings that are dollar denominated like the EBBGF not sure if I pick up my sword to joust with them that I can win the fight. This has been discussed here before although the broker I use hasn’t been one discussed.
Charles, the dollar denominated ones will still have the withholding. It is still a CAD issued preferred. Your only legitimate beef would be if it is being withheld in a tax free account.
Eugene, these issues are QDI.
On an unrelated note, do you know if AQNA is considered a foreign issuer for reporting purposes subject to withholding? They seem to report using foreign forms such as 6-k on EDGAR as if they’re considered foreign but I don’t see Fido charging any foreign stock commission on trades…… Also has there been any official word on what they’re doing regarding adoption of SOFR for floating beginning 10/17? I’m getting nowhere with IR…
Schwab did not withhold from my accounts back in 2020 when I last owned it.
AQNA is NYSE listed and debt, so no withholding and no foreign commission.
My thoughts mirror Steve and Justin’s. I loaded up on it around par a couple weeks before you bought. Another lazy way to collect above market yield with less capital risk near term…Along with little cap gain potential. But that’s fine by me. I’m still largely waiting to enter roached out perpetuals that still may need a bit more roaching….The only real risk here is your concern. I have heard no info about AQN declaring their official intent on its upcoming floating yield.
Just left a Lambeau Field tour up in Green Bay. Pretty cool experience. Though my main NFL concerns are the Patriots covering 6.5 season win total over and Saints 9.5.
Thank you. I bought AQNA under the assumption AQN would transition to the CME 3moSOFR + adjustment + the specified offset.
Thanks, everyone… I’ve been a little late to the party on this oen, but the only downside risk for this one from this level would seem to be if they say they are required to stay at 6.875%. If they were going to do that, you would think they would have already announced it…. So we either get a call announcement no later than Monday or AQNA will go to something in the range of 9.35% if it were to begin floating today.. Either one of those events should make this worth more. No call announcement and AQNA remains outstanding until at least 1/17/24.
Worst case it stayed fixed, it’s sister AQNB a bit further from floating would indicate little current price degradation if it stayed fixed. Plus other ute baby bond current long duration debt would indicate it still would have firm pricing.
From the AQNA prospectus:
“If the Issuer determines on the relevant LIBOR Determination Date that the LIBOR rate has been discontinued, then it will appoint a Calculation Agent and the Calculation Agent will use a substitute or successor base rate that it has determined in its sole discretion is most comparable to the LIBOR rate, provided that if the Calculation Agent determines there is an industry-accepted substitute or successor base rate, then the Calculation Agent shall use such substitute or successor base rate. ”
IMO, this means transition to SOFR should occur.
Yes, that was the assumption from purchase, but unfortunately not verification.
I own a full position on this assumption, but am not declaring victory. As there have been a few others people bought assumed they would float but didn’t.
If they get their renewable business sold, I suspecting this issue won’t be long for the world. As the intent to sell it was to deleverage. And a 9% note seems like a good place to start for them.
401k yes
Don’t forget about Enbridge smaller cousin from a different mother RMMBF (Pembina Pipeline).
To Sailing posted way down the line Re: FTRSF (pink US OTC)/ FTS.PR.G (TSX) and IBKR: (No Reply button available)
IBKR will allow you to trade directly on the TSX. You must:
– Deposit funds in your account denomination, typically USD.
– To buy on TSX, must exchange USD for CAD, so funds are available in CAD to settle on TSX. To do this set up the symbol in your Watchlist: USD.CAD. Click on it to get FOREX QUOTE onto trade ticket. The FIRST one is the one you are buying or selling…SO…Sell amount of USD on the trade ticket, expedite Forex trade and it will settle in one day to CAD.
– Now you can place TSX trade with settled CAD. so place order on trade ticket, just choose symbol FTS. PR.G, it will show a symbol TSX.
– If traded it will be held in CAD, pay divs in CAD, and build cash in CAD.
– There are a few maneuvers to learn here, so call up a rep and tell them what you want to do. 1) Forex exchange of currency, 2) find correct symbol by using look up tool, 3) Checking available CAD cash balance to place a trade on TSX.
I learned it and it’s actually easier on IBKR. The tools are very good, but gotta know where to go to find it. I use TWS Trader WorkStation.
What I have learned is do not place an order except after the open has gone by about 20 minutes since BidAsk is way wide on these issues. Look at last few days trading as a more reliable indicator, and place your order and just let it sit there, maybe for many days, esp after dividend dates.
I built out a very large position and keep all my Canadians in one IBKR account. The cash flow from these issues is just compounding and I am still finding opps in Canada with diversification and IG.
I buy USD and CAD bonds over there too. I REALLY like their bond platform and can place and leave an order just stand GTC.
PS: Trades average about $1.
If you are ever in StL I can show you directly! JA
Joel, thanks for all the info. I like the idea to set up a separate account for Canadian issues, so far I am watching a few USD based ones. For US preferreds, I use III, QOL, and yahoo finance daily to get all the information I need. But I haven’t found a great site for Canadian issues other than https://canadianpreferredshares.ca/, I’d like to learn more about Canadian preferreds so I can diversify from US issues. Comparing with volatile US market, Canadian market looks a lot more chill…
CDN denominated Enbridge preferreds:
Does anyone follow these as a group? What would you say the prevailing current yield on the group might be? What caught my eye was the Aug 2 press release https://www.enbridge.com/media-center/news/details?id=123776&lang=en regarding the reset rate on Ser H… Beginning Sept 1, 2023, it resets at 6.112% and its TSX close today was at $17.35 CDN [ENB.PR.H] which makes the current yield = 8.80%….. That seems terribly cheap for Enbridge’s quality, but is it representative of the other ENB CDN preferreds? I’ve only been following the 3 USD denominated ones and I thought they were cheap. However, if this is where CDN denominated ENB preferreds trade, then maybe I should start thinking Canadian, eh?
Also FWIW, it was interesting to see about 17% of shareholders elected to convert their H shares to I and go floating instead of reset. https://www.enbridge.com/media-center/news/details?id=123778&lang=en
Ser I will begin floating for its first quarter @ 7.19%.
Has anyone looked at these BPO cum prefs? I know all the pos and negs. Just a look? Anyone holding a sliver? Dhaaamm!