Q: i understand why reset preferreds have generally taken a beating for the last year or so but I don't understand why those with generous reset rates such as Efn.pr. at 4.71 points above the bank rate also get dragged down. I would have thought this would have lessened the blow somewhat. Can you educate me on this?
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Investment Q&A
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Q: I have preferred shares in my porfolio :ENBRIDGE INC 4% SER-3 PFD (ENB.PR.Y-C) ,BROOKFIELD ASST4.2%-34 PF (BAM.PF.B-C) and RYL BK CDA NVCC 4%-AZ PFD (RY.PR.Z-C). These were bought before I took care myself of my portfolio. All of them are down 40 to 50%.
I am tempted to sell all those preferred and replace them with CPD to get the capital loss for 2016 and keep getting some income.
I do not know much on the mechanics of preferred. Is this a good idea? Should I buy back the same titles after the 30 days required to avoid a superficial loss are expired?
Thank you.
Serge Lacroix
I am tempted to sell all those preferred and replace them with CPD to get the capital loss for 2016 and keep getting some income.
I do not know much on the mechanics of preferred. Is this a good idea? Should I buy back the same titles after the 30 days required to avoid a superficial loss are expired?
Thank you.
Serge Lacroix
Q: What do you think is the potential downside risk with cpd....where is the bottom.please give some hard numbers.
And is the potential upside higher then the downside?
And is the potential upside higher then the downside?
Q: My question relates to the effect of lower interest rates. There seems to be a considerable discussion to the issue of negative interest rates. In a scenario that the BOC decided to lower interest rates to 0 (let alone negative) what would be the effect on CBO. Currently the NAV of CBO is 19.12 and the yield is 3% ish. If the BOC reduces rates to 0, what in your estimation does NAV become and what does the yield become. I don't need a long explanation but rather the 2 numbers. Great service and keep up the good work.
Q: Hi Peter & team. The company suspended the dividend on the common shares. These preferred CF.PR.A are to reset in September 2016. The formula for the reset rate is 321bp + GoC 5year-bond. Assuming the latter at 0.40% (is this a reasonable figure?), the yield at reset, based on the current share price, will be just over 10% (am I right?). I am wondering whether this represents good value and an opportunity for income. How would you assess the risk that the dividend be also suspended on the preferred? What are the general rules in that regard? Thanks for your excellent service.
Q: Good Evening
I am looking to add a rate reset preferred to my income holdings. Would you recommend the above Empire Life issue or the recent Manulife offering?
I recently purchased the new Pembina in the after market.
Thanks team
I am looking to add a rate reset preferred to my income holdings. Would you recommend the above Empire Life issue or the recent Manulife offering?
I recently purchased the new Pembina in the after market.
Thanks team
Q: Hi 5i: Along with many others I have significant paper losses on CPD. I would hold for the good divided if I could be reasonably sure I wouldn't suffer another large hit if the BoC were to lower rates again, or go negative on us. Some time ago I sold about a half and reinvested the proceeds. I'm considering dumping the rest to limit the remaining potential damage. What do you think?
Q: Hello Peter,
Per today's the Globe and Mail, one third of the global government bond market is now trading at subzero rates. Under this negative rates environment, what kind of impact will it impose to prefer shares in general? Does it make sense for companies issued prefer shares to call them back, then reissue them at much lower rates. If the prefer share's rate resets in next couple of months, will the new rate be set to much lower rate than before (other than lower prime rate)? Thanks.
Lin
Per today's the Globe and Mail, one third of the global government bond market is now trading at subzero rates. Under this negative rates environment, what kind of impact will it impose to prefer shares in general? Does it make sense for companies issued prefer shares to call them back, then reissue them at much lower rates. If the prefer share's rate resets in next couple of months, will the new rate be set to much lower rate than before (other than lower prime rate)? Thanks.
Lin
Q: Hi Peter & Team,
The AQN.PR.A prefer is it a perpetual prefer or Reset prefer? If it is perpetual based on 4.5%/$25.00 issue price. That looks very good buy at today's price $13.50 ?
I have 600 @22.89 should I add more or cut my loss?
Thank you and learned a lot and appreciate from 5i .
The AQN.PR.A prefer is it a perpetual prefer or Reset prefer? If it is perpetual based on 4.5%/$25.00 issue price. That looks very good buy at today's price $13.50 ?
I have 600 @22.89 should I add more or cut my loss?
Thank you and learned a lot and appreciate from 5i .
Q: hi; when these reset june 1 2017 could they exchange them for new as they are trading at a low price.others have done this hair cut. if left the same they would yield over 6% + 5 year rate u.s. thanks for the great service--brian
Q: Hello! Having some VSB and CBO already (short-term bonds), I would also like to consider some modest exposure to high quality/longer term government bonds, 5-10yrs, and fairly liquid. Would like your recommendation in that space.
Appreciate your service always, member's input as well.
Thank you!
Appreciate your service always, member's input as well.
Thank you!
Q: Good morning,
With interest rates currently at very low levels with no sign of going up in a significant manner anytime soon, does a preferred share type ETF or actively managed fund holding mostly reset type preferred have a place in most portfolios. If so, what are your thoughts on PIC.PR.D at this time and can you recommend something else that would be more preferable in this asset class? Thank you
With interest rates currently at very low levels with no sign of going up in a significant manner anytime soon, does a preferred share type ETF or actively managed fund holding mostly reset type preferred have a place in most portfolios. If so, what are your thoughts on PIC.PR.D at this time and can you recommend something else that would be more preferable in this asset class? Thank you
Q: I have been reading some of your readers comments about the installment receipt being offered by AQN. It looked almost too good to be true so I read the press release. The following sentence is from the Press Release: "On the day following the Final Installment Date, the interest rate payable on the Debentures will fall to an annual rate of 0%. "
Thus, isn't this simply a purchase of common shares rather than a real convertible debenture. During the period until the acquisition closes it is a convertible but as soon as the deal closes the holder will get 0% interest and thus would most likely convert into common so that he/she could get the dividend stream....am I missing something?
Thus, isn't this simply a purchase of common shares rather than a real convertible debenture. During the period until the acquisition closes it is a convertible but as soon as the deal closes the holder will get 0% interest and thus would most likely convert into common so that he/she could get the dividend stream....am I missing something?
Q: What are the reset terms? Thanks
Q: I'm thinking of buying a position in ENB.PR.B. What's your thought on these for a long term hold? What's rate expected to be when they reset? Thanks.
Q: while the split might be beneficial for common shareholders can you comment on it's effects on the PFD's , please and thank you....the details might not be available yet but i would think one company would provide more strength to the balance sheet than two smaller ones...many thanks , in advance , for your thoughts on the matter....cheers
Q: A follow up from the previous question. I notice that SPFF has fallen dramatically over the last year - markedly more than apparently similar CEF's such as FFC-N and PDT-N. I suppose this may reflect a riskier portfolio, but the current yields are essentially the same. Any thoughts? Thanks
Q: What are your thoughts on this preferred share offering from Brookfield? It resets in June of 2016 and has a yield of 5.2%. What is the downside risk here?
Q: The common stock has gone up slightly over the past 12 months whereas the pref. has gone from near par to ~$16. I am thinking of taking a position in the pref. (already have some of the common). Can't seem to find much info. - is it a perpetual? Am I missing something? Thanks.
Q: I am baffled why this preferred is such a dog. I also own a preferred ETF (CPD) in my RRSP that is tanking.
Can you shed some light on why these are doing so badly? As well, how does the future regarding these holdings look to you?
Can you shed some light on why these are doing so badly? As well, how does the future regarding these holdings look to you?