PrefBlog

Ah, the life of a quant! I have spent more time over the years trying to figure out what happened to such-and-such twenty years ago that caused such price fluctuations / ticker changes / mysterious disappearances …

So as part of a project to clean up my databases as part of the preparation for the re-emergence of prefinfo.com, I had to figure out what happened to MMF.PR.C in 2004. According to my databases, MMF.PR.C:
i) converted in its entirety to MIC.PR.A [Manufacturers Life Insurance Co(The)6.1% PR 6, not the currently trading MIC.PR.A] 2004-10-21.
ii) continued trading (and is priced in my databases) until 2004-11-26, despite its lack of existence according to the reorg file. It continued to exist according to the instruments file.
iii) was redeemed 2004-11-26 at 26.82

PrefBlog wasn’t around in 2004, so nothing was found when searching the ticker.

What actually happened according to a press release dated 2004-09-10 was:

Manulife will make a securities exchange offer to holders of the $100 million principal amount Second Preferred Shares, Series 3 of Maritime Life (TSX: MMF.PR.C). A new preferred share of Manulife with identical economic terms will be offered for each outstanding Series 3 Share. Subject to receipt of certain regulatory approvals, it is expected that the offer documentation will be mailed to holders of Series 3 Shares in late September, with the exchange of shares being completed in late October 2004.
…
In the event that not all the Series 3 shares are exchanged, the Board of Directors of Maritime Life has also approved a by-law providing for the consolidation of the Series 3 Shares on the basis of one consolidated Series 3 Share for each existing 1,000,000 Series 3 Shares. The by-law requires approval of both Maritime Life’s policyholders and preferred shareholders at Maritime Life’s special meeting in November and, if approved, will be implemented following the meeting. Series 3 shareholders who have previously exchanged their shares for Manulife preferred shares will not be affected by the consolidation. Manulife intends to vote all of the Series 3 Shares it acquires pursuant to the exchange offer in favour of the consolidation by-law.

So how do I treat this? Simulations may hold MMF.PR.C and need to be told what happens to it by way of reorg so they don’t blow up when the issue is no longer priced. Some simulations may have even bought MMF.PR.C after the 2024-10-21 Exchange Date (but, obviously, prior to the 2004-11-26 redemption date).

What I might do is:

• Put in a forced conversion to a new security (same ticker, but a change of terms, like a FixedReset resetting), effective 2004-9-10 (the date of the press release) that
  • has a put option effective 2004-10-20 at 26.82, and
  • is forcibly converted to MIC.PR.A effective 2004-10-21
• Accept the fact that the way things are currently programmed, future simulations will ignore the put and accept the forced conversion
• Accept the fact that the way things are currently programmed, the simulated portfolio will think it will get the 26.82 on the put date of 2004-10-20 when in fact excercising the option means it would get the redemption value on the redemption date of 2004-11-26

I really don’t want to do all the programming required to allow simulations to choose whether or not to accept the option; that will be complex and I don’t think it will lead to any improvement in meeting the purpose of simulations (refining valuation, risk and trading parameters). On the other hand, having some kind of option-decider routine might – possibly – lead to such an improvement if, for instance, the machine ‘sees’ it can buy a FloatingReset really cheap right now with the intent of converting it to the FixedReset in a year or two.

What I really need is an army of programmers, but first I’ve got to get the Assets Under Management up a little.

Why am I telling you all this? Because I don’t want to go through this entire process again in 2046, when the issue will arise again and I couldn’t figure out how to file this information on my computer so that I will find it easily at that time. Now it’s on the easily accessible PrefBlog, which will live forever, just like me!

Quadravest has announced:

Financial 15 Split Corp. (the “Company”) is pleased to announce it will undertake an offering of Preferred Shares (TSX: FTN.PR.A) of the Company. The offering will be led by National Bank Financial Inc.

The sales period of this overnight offering will end at 8:30 a.m. EST on June 17, 2026. The offering is expected to close on or about June 24, 2026 and is subject to certain closing conditions including approval by the TSX.

The Preferred Shares will be offered at a price of $10.78 per Preferred Share.

The closing price on the TSX of the Preferred Shares on June 15, 2026 was $10.84.

Since the inception of the Company, 270 consecutive dividends have been declared for the Preferred Shares. The aggregate dividends declared on the Preferred Shares total $13.26 per share. All distributions to date have been made in tax advantaged eligible Canadian dividends.

The net proceeds of the offering will be used by the Company to invest in an actively managed, high-quality portfolio primarily consisting of financial services companies made up of Canadian and U.S. issuers as follows:

Bank of Montreal	National Bank of Canada	Bank of America Corp
The Bank of Nova Scotia	Manulife Financial Corporation	Citigroup Inc.
Canadian Imperial Bank of Commerce	Sun Life Financial Services of Canada Inc.	Goldman Sachs Group Inc.
Royal Bank of Canada	Great-West Lifeco Inc.	JP Morgan Chase & Co.
The Toronto-Dominion		Bank Wells Fargo & Co.

The Company’s Preferred Share investment objectives are:

• i. effective December 1 ,2025, to provide holders of the Preferred Shares with fixed, cumulative monthly dividends at an annual rate of 7.25%, as determined annually by the Board of Directors, and subject to a minimum rate of 6.00% until
  2030; and

• ii. on or about the termination date, currently December 1, 2030 (subject to further 5 year extensions thereafter), to pay the holders of the Preferred Shares $10.00 per Preferred Share.

The NAVPU was 22.58 on June 15, compared with closing prices of 10.84 for the preferred and 11.04 for the Capital Units; total 21.88; a nice gain of $0.70 per unit sold for the fund’s existing holders; at least on the face of things. We don’t know what price the offsetting Capital Units were sold at; I’m guessing that was an ATM process.

Update, 2026-6-17: Assiduous Reader Niagara points out in the comments that FTN Capital Units split 110-new-for-100-old in May, which was not reported on PrefBlog. So I’ll report it here:

Financial 15 Split Corp. (the “Company”) is pleased to announce its intention to complete a share split of its Class A shares (the “Share Split”) due to the Company’s strong performance. The Class A shareholders of record at the close of business on May 19, 2026 will receive 10 additional Class A shares for every 100 Class A shares held, pursuant to the Share Split. The Share Split is subject to approval by the Toronto Stock Exchange (the “TSX”).

Class A shareholders will continue to receive regular monthly cash distributions targeted to be $0.12570 per Class A share following the Share Split, resulting in an increase in total distributions of approximately 10% through the issuance of additional shares. Since inception, Class A shareholders have received cash distributions of $28.57 per share.

The Class A shares are expected to commence trading on an ex-split basis at the opening of trading on May 19, 2026. No fractional Class A shares will be issued, and the number of Class A shares each holder shall receive will be rounded down to the nearest whole number. The Share Split is a non-taxable event.

The impact of the Share Split is expected to be reflected in the net asset value per unit as at May 29, 2026.

The Company invests in a high quality portfolio primarily consisting of financial services companies made up of Canadian and U.S. issuers as follows: Bank of Montreal, The Bank of Nova Scotia, Canadian Imperial Bank of Commerce, Royal Bank of Canada, Toronto-Dominion Bank, National Bank of Canada, Manulife Financial Corporation, Sun Life Financial, Great-West Lifeco, Bank of America, Citigroup Inc., Goldman Sachs Group, JP Morgan Chase & Co. and Wells Fargo & Co.

Manulife Financial Corporation has announced (on June 5):

that after having taken into account all election notices received by the June 4, 2026 deadline for conversion, 17,750 of its currently outstanding 6,537,903 Non-cumulative Rate Reset Class 1 Shares Series 3 (the “Series 3 Preferred Shares”) have been elected for conversion on June 19, 2026, on a one-for-one basis, into Non-cumulative Floating Rate Class 1 Shares Series 4 of Manulife (the “Series 4 Preferred Shares”), and 886,331 of its currently outstanding 1,462,097 Series 4 Preferred Shares have been elected for conversion on June 19, 2026, on a one-for-one basis, into Series 3 Preferred Shares.

Since there would be fewer than 1,000,000 Series 4 Preferred Shares outstanding after the conversion date (June 19, 2026), after taking into account all such election notices received by the June 4, 2026 deadline for conversion, (i) Manulife will automatically convert all remaining Series 4 Preferred Shares into Series 3 Preferred Shares, on a one-for-one basis, on the conversion date, and (ii) the holders of Series 3 Preferred Shares are not entitled to convert their Series 3 Preferred Shares into Series 4 Preferred Shares.

As a result, after giving effect to such conversion, on June 19, 2026, Manulife will have 8,000,000 Series 3 Preferred Shares issued and outstanding. The Series 3 Preferred Shares are listed on the Toronto Stock Exchange under the symbol MFC.PR.F.

As announced by Manulife on May 21, 2026, after June 19, 2026, holders of Series 3 Preferred Shares will be entitled to receive fixed rate non-cumulative preferential cash dividends on a quarterly basis, as and when declared by the Board of Directors of Manulife (the “Board”) and subject to the provisions of the Insurance Companies Act (Canada). The dividend rate for the five-year period commencing on June 20, 2026, and ending on June 19, 2031, will be 4.64000% per annum or $0.290000 per share per quarter, being equal to the sum of the five-year Government of Canada bond yield as at May 21, 2026, plus 1.41%, as determined in accordance with the terms of the Series 3 Preferred Shares.

MFC.PR.F was issued as a 4.20%+141 FixedReset that commenced trading 2011-3-11 after being announced 2011-3-7. Notice of extension was published in 2016 and the rate reset to 2.178%. I recommended that holders not convert to FloatingResets but there was a 21% conversion anyway. In 2021, the dividend rate on MFC.PR.F reset to 2.348% and there was a 3% net conversion to the FixedReset. Notice of extension was given in 2026 and the rate reset to 4.64%.

MFC.PR.P is a FloatingReset, Bills+141bp, which arose via a partial conversion from MFC.PR.F in 2016.