Q: I hold ECN and ECN.PR.A in a registered account. After reading recent comments I am considering selling the preferred shares to buy more of the common. Would you endorse this move? I also have a small preferred position in a taxable account with a 55% gain. I expect you would advise holding in this case. Is that correct? Thanks as always for your exceptional service.

Q: Hi 5i,
Regarding the preferred shares of ECN and the proposed sale and $7.50 dividend. This might be to simplistic, but here goes. ECN is selling the First Service division for $2B US. Paying out approximately $1.5B with the $7.50 dividend. Leaves $500M US. The preferred shares outstanding are approximately 7.6 million units of A and C issues. Total redemption value at $25 would be $190M Cdn. Their 5 year anniversaries are coming up on December 31, 2021 and June 30, 2022. With coupon rates of 6.50% and 6.25% on the prefs, I would think there would be redemptions coming using the proceeds of the sale and do any refinancing with cheaper debt.
What are your thoughts on the above scenario?
Thanks for all your professional insight and advice.

Q: ECN.PR.A will reset Dec. 31/21 at 5.44% over the yield on 5 yr Goverment of Canada bonds , but not less than 6.5%.
On a total return I’m down 14.7% given the current price of $14.40. The current yield is 11.25%. It makes up 7% of my portfolio.
I’m considering averaging down to 10% of my portfolio.
My thinking is that with the very low interest rates it will make more sense for the preferred to be redeemed, since they will be able to raise funds at a lower rate in the market. My second thought is that looking forward to 2021 interest rates could be on the rise. Third the preferred is trading a huge discount .
Is there any overriding reason not to do this I.e. value of underlying shares ECN Common???