Investment Q&A

Q: Hi Peter and Team:
I hold 7% of my overall total portfolio in individual Preferred shares. 82% of that 7% is minimum rate resets. I am looking to make that 100% to ensure that I know the minimum dividend rate going forward upon reset. You have recommended PPL.PF.A in another question recently.
Couple questions:
1. Do you see anything wrong with this strategy overall?
2. Minimum rate resets tend to be in the oil and gas storage or utility. PPL, TRP, CPX, CU. My largest holding is PPL. They are rated P2 to P3L (if this means anything by the rating agencies). This means that I am basically ignoring the financial sector with regards to Preferred shares. Do you see any undue risk associated with the above mentioned companies and being weighted towards one industry classification within the context of preferred shares?
Thank you for your continued advice and knowledge.

Q: Hi, 5I
1.Could you confirm that preffered are considered like stocks for tax purposes and can be used as is for taxlosses.
2.Could you give your opinion on Pimco flagship monthly income mutual fund.
Take as many points as deemed necessary
THanks
CDJ

Q: DC is buying back this pref share along with others. The Company has had poor performance to put it mildly. What reasons could it have to use its cash in this manner?
Thanks, Hugh

Q: I am curious about Capstone Infrastructure CSE-A on the TSX, or as CSE-PA.TO on Yahoo. It has a 6.31% yield yet there are no questions on this company and I have never seen it mentioned. Please give us some background and information on the company's financial stability, security of dividend, debt levels, and payout ratio, etc. Would you consider it investable and are there other utilities with near comparable yields that you might prefer
Thank you............ Paul K

Q: What is the difference between these « Senior Preferred shares » and regular BIP preferred shares? Any safer? Any restrictions? Thanks

Q: Good morning 5i Team, I’m looking for a few suggestion/recommendations for convertible bonds/debentures that you like. The sector does not matter as I’m well diversified. A few with good income but also with the possibility of converting at some point would be a bonus. Thanks again for the great survive you provide.

Q: My daughter’s well balanced acct holds 2.3% ECN plus 1% ECN.PR.A. I’m considering going to 2 % with ECN.PR.A.
Any view on survive-ability of ECN in a recession?

Q: Would you buy bce.pr,a for safe income ?Phil

Q: I have been looking at some rate reset preferred shares with a floor rate that are trading at a discount and have a relatively short time to their 5-year maturity (a couple examples being ALA.PR.I or ECN.PR.A). What price moves would you expect as maturity nears, if rates are trending down, or are lower than today? How likely are these companies to renew for 5 years at the floor v simply redeeming them and re-issuing a new preferred with a lower rate? Are you aware of any rate resets with a floor that have reached their 5 years, and what did the company do (ideally any PF-3 rated preferreds).
Thanks

Q: Hi 5i team, I am trying to understand the difference between some of the different series of preferred shares of Pembina Pipeline. For example ppl.pr.a with current price of $15.60 yields 7.86 percent while ppl.pr.k has a price of $25.47 and yields 5.64 percent. Can you explain the difference between these two series and offer your opinion as to which is better to buy. Thanks.

Q: Would you have an explanation on why this security has performed so poorly? I would expect with its 6.5% minimum guarantee on its dividend that the preferred shares would be trading close to face value ($25.00).

Q: Hello Team
At this time would it be a good time to start a position in preferred shares. What would be your top 5 choices for preferred??

Q: Regarding your earlier response concerning rate reset preferred shares with a minimum reset of 5% (ALA.PR.I, BPO.PR.C, BPO.PR.E, ENB.PF.I, PPL.PR.K, BIP.PR.B), what is the tax implications of the Brookfield ones noted above? Is it foreign income? Are they treated as eligible dividends? Any withholding tax from a U.S. partnership that cannot be recovered would impact the advertised yields. Thanks!

Q: in a rate reducing world now where do you see this going? thanks jim

Q: I am a senior and am an income investor. I am interested in purchasing some minimum rate reset pref. Shares in quality companies. Your thoughts on this strategy as I am looking for a steady income stream. Would you recommend 3 or 4 with a minimum reset rate of at least 5% dividend rate that would qualify for the Canadian dividend tax credit as they would be purchased in a non registered account. I am also considering a purchase of ING-N shares in US funds in an RSP account. Your thoughts on the quality of this investment and the safety of the dividend and if there is any withholding tax,as this is a dividend play the fact that stock price can vary somewhat is not as relevant however capital preservation is always a consideration. In all of the above I would only start with buying a half position. Thank you, Brian

Q: What would you expect will be the key drivers of CPD's price in the marketplace? Eg would it likely follow equities down/up (because of reliance on credit of issuers) or moreso bonds ("safe" haven for yield when equities are volatile)? How do interest rates impact it? What would it do in a recession? I'm not looking for a prediction of the future, but a simplified model on how to think about this kind of security. Thanks.

Q: I hold some Just Energy Convertible Debentures (JE.DB.C) as part of my fixed income allocation. With the recent setback they have fallen from about $95 to $80. If the company restructures I assume they will go to zero, but if the company survives or gets bought out they should return close to par. What would you recommend at this point and are there any signals to look for that would scream get out now no matter what the loss?

Q: Should there be concerns that JE will not be able to meet its financial obligations on this convertible debtenture?

Q: XMF.PR.B is a preferred split share fund from Quadravest. It invests solely in shares of Manulife . The fund sells at about $5.10 and pays a 7.3% dividend monthly. My understanding is that it has never missed paying the dividend in over 10 years. The fund guarantees to buy back your share at $5.00 on the anniversary date, which is December 1st 2024. It would appear to have bond like characteristics with a high payout. Your input would be appreciated.

Q: Hello. I have a large portion of my fixed asset side invested in Pref Shares of solid Canadian companies and this asset class has been suffering. I just received a solicitation from BPRF, which aims to invest in high quality US Prefs and claims the US returns are much better than Canada. The fund looks tiny and expensive and the yield is well below the 5% promise. Neverthelesss, should I be looking to move from Canadian prefs into US holdings and if so, how best to achieve that? Thanks