Investment Q&A

Q: Received corporate action notice
Appreciate your advice
Conversion privilege as if dec31/18
I am presently down $5400 loss
1. To receive one cumulative floating rate préf share of series 4 CPX for each capital power Corp cumulative rate reset pref share series 3 converted If you recommend this option can u explain what it means going forward
2 those who do not convert need not submit — I assume this means it’s cashed in in dec31/18
Appreciate your advice

Q: I hold some 5 year rate reset preferred shares series A from Element Fleet Management (EFN.PR.A) which will reset to 6.933% on Dec 31, 2018. They also carry a conversion privilege to convert to series B floating rate preferreds (3 month T-Bill + 4.71%) which will be 6.444% for the first 3 month period in 2019. Given your outlook for interest rates going forward, would you advise converting? In addition I cannot find the ticker symbol to get a quote for the series B preferreds. Do you know the ticker symbol?

Q: I am a little curious about your answer to George regarding preferreds. Don't they move inversely to interest rates? So all else equal would you not expect a preferred share etf to fall in value as interest rates rise (just like bonds)? Not only that, would they not generally fall even further than bonds as preferreds never mature (preferreds therefor have a longer duration than bonds making them even more sensitive to interest rate changes). Thanks.

Q: hi, using above as an example, could you explain why this is trading at $20. the reset date is jan 1 2019. can this preferred share be called back?? is the market thinking rates are going to get lower again??? Brookfield Properties Preferred T

Q: When do the hydro one installment receipts stop paying interest?

What happens if the Avista deal does not go thru?

What are the time frames involved in the Avista deal?
Thanks.

Q: What to do with cpd and Ecn.pr.a .
I’ve held reset prefs before, saw it through through the downturn in interest rates and the upturn again, did well, because I had a long term objective.
I now no longer have this luxury. However I feel some comfort with the minimum rate reset preferred. Should I. I appreciate your unbiased recommendation on both securities.
Thank you.
P.s. will be asking for a complete portfolio evaluation in the new year. Paid of course.

Q: "The new annual dividend rate applicable to the Series N Shares for the five-year period commencing on December 1, 2018 to, but excluding, December 1, 2023 will be 5.086 percent, being equal to the five-year Government of Canada bond yield of 2.436 percent determined as of today plus 2.65 percent in accordance with the terms of the Series N Shares.” (Quote from November 1 PRNewswire)

In hindsite I am thinking that I should have just bought 2 good dividend paying stocks, such as T, TRP, PPL, and FTS. ENB would also be high on my list though I do have a full position. The others are about a half position.

1 - Does this make any sense? I am thinking that the dividends are close to the 5% of the Preferred O shares and the chances of recovering some of my loses are probably better. somehow I think the Series O Preferred's don’t stand much chance of getting back to $25.00 in the next 5 years.

2 - Correct me if I am wrong but Enbridge won’t likely call the shares in unless the rates drop quite bit?

3 - If you believe that my thinking makes sense would you rank the suggested stocks including ENB in order of preference. Feel free to add any other Dividend stock over my suggestions

4 - What scenario would make the value of Series N appreciate or go up in value?

Please take as many credits as necessary for my questions.

John

Q: I have a question regarding GSY asked by Stephen on Nov 28 about convertible debentures 5.75% at $ 43.99 a share until July 29,2022 could you explain to me how these work in regards to the following
- how often are you payed
-the tax implications
- how does the share price $ 43.99 come into play
- how is your principle tied up if you needed the money is there a penalty if you had to withdraw it,or if that is even possible
-can these be purchased at any bank online with your discount brokerage
-in your opinion how safe are these and any negatives about them
I realize this is a lot to ask and use as many credits as needed thanks a bunch

Q: Hi, my question is does i5Research have any insight as to why preferred shares have drastically declined in price during November and is there any hope that this trend will reverse. My already underwater collection of Enbridge and bank preferred shares have decreased 7% in value since the start of November. My collection of preferreds are rate reset, resetting in 2019 and where issued with a 3.8% to 4.4% yield. Thanks … Cal

Q: I am considering purchasing ECN preferred for the great yield. Can you explain the difference between ECN.PR.A and ECN.PR.C. I can see the yield from a stock quote but can't figure how the dividend is calculated or when the rate resets on either of these. Which of the two if any would you recommend?
Thanks

Q: I hold HPR and the Dynamic preferred yirld fund. In light of the recent correction in preferred share,, do you advise to hold, buy more or is it time to reduce the positions held.

Q: Altagas preferred shares have really been pummeled in reaction to company developments and the sell off in prefs generally. Do you think they offer reasonable value at these levels and do you believe the dividend is reasonably secure in view of the coming cut in the common dividend? Thanks.

Q: Hello,

Are these Debentures convertible? And if so, what are the terms?

Thanks,
Stephen

Q: Is it time yet to pick up more HPR for long term " fix-income" hold?
Thanks.
Desiree

Q: Hi Peter & Staff,
Would you recommend the above for a good income investment, or do you have some that you like better?

Q: Good morning, I have recently shifted from a third party manager and am reviewing the pref share positions I currently own. All are individual share positions. Am I better off going with CPD versus individual ownership to share risk and also to simplify my management overall. Thanks

Q: Is the decline in preferred shares overdone...how much further down could it go? and under what scenario? For a long term, safe(r), diversified investment, does it not seem like a good time to add to a position?

Q: Hello Team
Could you please give me you opinion on DC.PR.E should I keep holding or sell, it represents about 3% in my overall portfolio. And if I should sell, it seems to be thinly traded how do I get rid of it with out having to sell 50 or a 100 shares at a time. I am down about 35% on this security.

Q: In the preferred share space I own both cpd and Ecn.pr.a. I am down a fair amount on both. Does the market really affect prefs that much. I bought because of the reset feature . Assuming higher interest rates the reset rate would be higher. No indication yet of falling rates in which case I would sell CPD and take my losses. On the other hand minimum rate reset preferred guarantees a specific rate protection on falling interest rates while at the same time having a possible increase in the reset rate if interest rates rise. Looks to me the best of both worlds. My investment is for income. Final question , will price go back to par on reset date.
Can one expect the the closer to reset the closer the value will be to par.

Q: I own a Brookfield Renewable preferred (Series 11) that pays $1.25 (5%) thru to April 30, 2022. If not called, it will convert to the greater of GOCs+382bps, or 5%. Given my view of interest rates, I am comfortable with the position, because even if it is not called, I will be left with what I expect to be a good quality credit with a relatively attractive yield.

My concern is that it seems to have got caught up with the recent volatility, and is trading well below $25. Currently it is $23. I want to add more, but I wonder if I am missing anything here. I would still expect it to be called in 2022, as I just would not expect management to allow it to float at what I expect would be an above market interest rate. But I am already underwater significantly more that I would have ever expected on this, and I am leery of adding to the position.

Thoughts?