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The Globe and Mail

$1-billion of pref shares issued in last week

The yield story is back in play. Markets are choppy and income trusts have disappeared, so investors are turning to different securities for steady dividends.

For the most part, REITs have absorbed the brunt of this thirst for yield. The bigger ones are stable operations so investors flock to them. It's why RioCan REIT can finance three times in three months.

But preferred shares have also been hot, especially since the rate reset structure became popular with financial institutions during the financial crisis. Earlier this year, more firms started experimenting with them, and investors have gotten comfortable with the issues.

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The heavy demand for these securities was on display Tuesday when TransAlta Corp. issued a new $200-million preferred share issue, only to increase it to $275-million. The deal came a day after Bell Aliant Inc. issued its own $100-million offering.

Look back to last week, and you'll also see RioCan sold $100-million of preferred units and Enbridge came to market with a $300-million deal that was increased to $450-million. Such a large hike demonstrates just how much can be deployed when investors feel safe.

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