Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Report on Business

Streetwise

News and analysis on Bay Street and the world of finance
available exclusively to subscribers of Globe Unlimited

Entry archive:

Perpetual preferred shares come back in style Add to ...

Rate reset preferred shares have been in vogue for years, but it appears that the pendulum could be swinging back in favour of the ordinary, plain vanilla type.

On Monday, Power Financial Corp. announced a $150-million deal for perpetual preferred shares, and on Friday, Great-West Lifeco Inc. announced a deal for both the same size and the same type of security. Before Friday’s deal, the market hadn’t seen perpetuals since February, 2010 -- two full years ago.

More related to this story

Not only did these new deals sell, they blew out. Great-West’s deal was increased to $250-million, and Power Financial’s was raised to the same amount, just two hours after the deal was launched. Both offerings were co-led by BMO Nesbitt Burns, RBC Dominion Securities and Scotia Capital.

This isn’t to say that rate reset preferred shares have gone out of style. Enbridge announced a $300-million offering of these securities less than a month ago, and the deal was increased to a whopping $500-million. But it is interesting to note that some companies now prefer the fixed perpetual rates, rather than hope that rates don’t jump too high within five years. And investors clearly don't seem to mind.

Follow on Twitter: @timkiladze

 
  • PWF-T
  • GWO-T
  • ENB-T
Live Discussion of PWF on StockTwits
More Discussion on PWF-T
Live Discussion of GWO on StockTwits
More Discussion on GWO-T
Live Discussion of ENB on StockTwits
More Discussion on ENB-T

Topics:

In the know

Most popular video »

Highlights

More from The Globe and Mail

Most Popular Stories