PrefBlog

I wouldn’t normally post about a credit rating confirmation, but for BPO I’ll make an exception!
DBRS has announced that it:

confirmed its Issuer Rating and Senior Unsecured Debt credit rating on Brookfield Property Partners L.P. (BPP) at BBB (low). Morningstar DBRS also confirmed its credit ratings on Brookfield Property Finance ULC’s Senior Unsecured Notes and Brookfield Office Properties Inc.’s Senior Unsecured Notes at BBB (low), as well as Brookfield Office Properties Inc.’s Subordinated Notes at BB and Cumulative Redeemable Preferred Shares, Class AAA at Pfd-3 (low). All trends are Stable. The credit ratings are based on the credit risk profile of the consolidated entity, including BPP and its subsidiaries (collectively, BPY).

KEY CREDIT RATING CONSIDERATIONS
These credit rating actions consider the progress BPY continues to make in executing its strategy of reducing its balance sheet exposure to real estate, along with an anticipated commensurate reduction in financial leverage, while maintaining exposure to very high-quality core office and retail assets. BPY’s exposure to its LP Investments segment is declining as the opportunistic funds mature and execute realizations, thereby providing a source of funds. BPY’s operating environment has supported robust transaction activity, including office leasing, and new office leases are creating a near-term drag on net operating income (NOI) growth until cash rents commence.

The Stable trends consider Morningstar DBRS’ expectations for (1) improved same-property NOI growth rates in the near to medium term as new office leases yield cash rents; (2) continued support from BPY’s parent, Brookfield Corporation (BN; rated “A,” Stable by Morningstar DBRS), in the near term, by way of equity funding for upcoming debt maturities; and (3) BPY to continue executing its strategy of recycling capital into trophy office and retail assets while reducing leverage over time, resulting in an improved financial risk assessment (FRA) profile, as described below.

Morningstar DBRS applied a positive three-notch adjustment to BPY’s FRA in consideration of its enhanced financial flexibility resulting from (1) a global portfolio consisting of a high proportion of core trophy office and retail assets, (2) a relatively strong liquidity position (including consideration for explicit parental support) relative to a modest amount of Senior Unsecured Debt outstanding, and (3) a predominately nonrecourse secured debt stack with significant equity cushion providing coverage of its Senior Unsecured Debt. This FRA adjustment is newly applied following the publication of Morningstar DBRS’ updated “Global Methodology for Rating Entities in the Real Estate Industry,” whereby some adjustments are now considered as part of the Comprehensive FRA (CFRA). This adjustment also serves to balance the constraint on the Intrinsic Assessment Range when the Comprehensive Business Risk Assessment is much stronger than the CFRA, as in the case for BPY.

CREDIT RATING DRIVERS
Morningstar DBRS would consider a negative credit rating action if Morningstar DBRS were to change its views on the level and strength of implicit support provided by BN, should BPY’s total debt-to-EBITDA deteriorate to more than 16.0 times (x), or if BPY’s EBITDA interest coverage were to deteriorate from current levels (0.92x for the last 12 months (LTM) ended December 31, 2025), on a sustained basis, all else equal. On the other hand, Morningstar DBRS would consider a positive credit rating action should Morningstar DBRS’ outlook for BPY’s total debt-to-EBITDA improve to 13.0x or better, all else equal.

FINANCIAL OUTLOOK
Morningstar DBRS maintains its FRA of BPY. In the near to medium term, Morningstar DBRS expects that BPY will continue to demonstrate an improving trend in its total debt-to-EBITDA metric toward the 15x range (from 15.8x at the LTM ended December 31, 2025), and that BPY’s EBITDA interest coverage metric will continue an improving trend above the 1.00x range. These improving metrics will be largely driven by continued capital recycling activity, associated debt reduction, support from BN in the interim, positive same-property NOI growth, and the benefit of lower interest rates.

CREDIT RATING RATIONALE
The credit ratings continue to be supported by (1) Morningstar DBRS’ view of implicit support from BN, as detailed above; (2) BPY’s market position as a pre-eminent global real estate company; (3) BPY’s high-quality assets, particularly its Office and Retail segments, with long-term leases to large, recognizable investment-grade-rated tenants; and (4) superior diversification, in particular by property, tenant, and geography. The credit ratings continue to be constrained by BPY’s weak FRA as reflected by both its highly leveraged balance sheet; a riskier retail leasing profile in terms of lease maturities and counterparty risk relative to BPY’s Office segment; and a higher-risk opportunistic LP Investments segment composed primarily of office, mixed-use, logistics, and multifamily assets, as well as alternatives.

ENVIRONMENTAL, SOCIAL, AND GOVERNANCE CONSIDERATIONS
There were no Environmental/Social/Governance factors that had a significant or relevant effect on the credit analysis.

Affected issues are BPO.PR.A, BPO.PR.C, BPO.PR.E,.BPO.PR.G, BPO.PR.I, BPO.PR.N, BPO.PR.P, BPO.PR.R, BPO.PR.T, BPO.PR.T, BPO.PR.W, BPO.PR.X and BPO.PR.Y.

Emera Incorporated has announced:

that it does not intend to exercise its right to redeem all or any part of the currently outstanding Cumulative Minimum Rate Reset First Preferred Shares, Series J of the Company (the “Series J Shares”) on May 15, 2026. There are currently 8,000,000 Series J Shares outstanding.

Subject to certain conditions set out in the prospectus supplement of the Company dated March 26, 2021, to the short form base shelf prospectus dated March 12, 2021, relating to the issuance of the Series J Shares (collectively, the “Prospectus”), the holders of the Series J Shares have the right, at their option, to convert all or any of their Series J Shares, on a one-for-one basis, into Cumulative Floating Rate First Preferred Shares, Series K of the Company (the “Series K Shares”) on May 15, 2026 (the “Conversion Date”). On such date, holders who do not exercise their right to convert their Series J Shares into Series K Shares will continue to hold their Series J Shares.

The foregoing conversion right is subject to the following:

if the Company determines that there would be less than 1,000,000 Series K Shares outstanding on the Conversion Date, then holders of Series J Shares will not be entitled to convert their shares into Series K Shares, and

alternatively, if the Company determines that there would remain outstanding less than 1,000,000 Series J Shares on the Conversion Date, then all remaining Series J Shares will automatically be converted into Series K Shares on a one-for-one basis on the Conversion Date.
In either case, Emera will give written notice to that effect to holders of Series J Shares at least seven days prior to the Conversion Date, subject to the terms set out in the Prospectus.

The dividend rate applicable for the Series J Shares for the five-year period commencing on May 15, 2026 and ending on (and inclusive of) May 14, 2031, and the dividend rate applicable to the Series K Shares for the three-month period commencing on May 15, 2026, and ending on (and inclusive of) August 14, 2026, will be determined on April 15, 2026 and notice of such dividend rates shall be provided to the holders of the Series J Shares on that day.

Holders of Series J Shares who wish to exercise their conversion right should communicate with their broker or other nominee to obtain instructions for exercising such right during the conversion period, which runs from April 15, 2026 until 5:00 p.m. (EDT) on April 30, 2026. Any notices received after this deadline will not be valid. As such, it is recommended that this be done well in advance of the deadline in order to provide their broker or other nominee with adequate time to complete the necessary steps.

Holders of Series J Shares who do not provide notice or communicate with their broker or other nominee by the deadline will retain their Series J Shares and receive the new annual fixed dividend rate applicable to the Series J Shares, subject to the conditions stated above. Holders of Series J Shares will have the opportunity to convert their shares again on May 15, 2031 and every five years thereafter as long as the shares remain outstanding. For more information on the terms of, and risks associated with, an investment in Series J Shares and Series K Shares, please see the Company’s Prospectus, which is available on SEDAR+ at www.sedarplus.ca.

EMA.PR.J is a FixedReset, 4.25%+328M425, announced 2021-3-24. They recently issued some USD junior subordinated notes, but the proceeds of this issue have not been used for redemption of these preferreds. EMA.PR.J is tracked by HIMIPref™ but relegated to the Scraps – FixedReset (Premium) index on credit concerns.

Brompton Funds has announced:

Life & Banc Split Corp. (the “Fund”) is pleased to announce its intention to complete a stock split of its class A shares (the “Share Split”) due to the Fund’s strong performance.
Class A shareholders of record at the close of business on April 17, 2026 will receive 15 additional class A shares for every 100 class A shares held, pursuant to the Share Split. The Share Split is subject to the approval of the Toronto Stock Exchange (the “TSX”).

Class A shareholders will continue to receive regular monthly cash distributions targeted to be $0.10 per class A share following the Share Split. As a result, the total dollar amount of distributions to be paid to class A shareholders is expected to increase by approximately 15%. The Fund provides a distribution reinvestment plan, on a commission-free basis for class A shareholders that wish to reinvest distributions and realize the benefits of compound growth.

Over the last 10 years, the class A shares have delivered a 21.9% per annum total return based on net asset value, outperforming the S&P/TSX Capped Financials Total Return Index by 7.9% per annum and the S&P/TSX Composite Total Return Index by 9.3% per annum.(1) Since inception, class A shareholders have received cash distributions of $21.55 per share.

Following the completion of the Share Split, the preferred shares of the Fund are expected to have downside protection from a decline in the value of the Fund’s portfolio of approximately 53%.(2)

The class A shares are expected to commence trading on an ex-split basis at the opening of trading on April 17, 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 Fund invests on an approximately equally weighted basis in a portfolio consisting of common shares of the six largest Canadian banks and the four major publicly traded Canadian life insurance companies:

Bank of Montreal	Great-West Lifeco Inc.
National Bank of Canada	The Bank of Nova Scotia
Canadian Imperial Bank of Commerce	Royal Bank of Canada
iA Financial Corporation Inc.	The Toronto-Dominion Bank
Sun Life Financial Inc.	Manulife Financial Corporation

This follows the previous split last October; and I’ll simply update and repeat what I suggested at that time:

This harms the credit quality of the preferreds by increasing the cash drag (due to increased distributions to the Capital Units due to the split) and by decreasing the Asset Coverage ratio. However, with a Whole Unit NAVPU of 23.73 as of 2026-4-9, there is no immediate cause for alarm.

My guess is that they’re doing this to increase the leverage provided by owning the Capital Units, given my assumption that this is what these shareholders want.

Thanks to Assiduous Reader newbiepref for bringing this to my attention!

BCE Inc. has announced (although not yet on their website):

BCE Inc. will, on May 1, 2026, continue to have Cumulative Redeemable First Preferred Shares, Series AG (“Series AG Preferred Shares”) outstanding if, following the end of the conversion period on April 21, 2026, BCE Inc. determines that at least 2,000,000 Series AG Preferred Shares would remain outstanding. In such a case, as of May 1, 2026, the Series AG Preferred Shares will pay, on a quarterly basis, as and when declared by the Board of Directors of BCE Inc., a fixed cash dividend for the following five years that will be based on an annual fixed dividend rate equal to 5.30%.

Finding this notice took some doing! I don’t see anything on the BCE website, or on the Globe & Mail, but eventually found the Montreal Gazette notice. I couldn’t help but laugh at the addendum on the page:

Posted Online 17 hours ago Viewed 2 times

… so I’m half the readership for this notice!

BCE.PR.G reset to 3.37% in 2021. Notice of extension was provided in March, 2026.

BCE.PR.H is a “RatchetRate” preferred, paying a varying percentage of prime depending upon the trading price:

As of May 1, 2026, the Series AH Preferred Shares, should they remain outstanding, will continue to pay a monthly floating dividend based on a dividend rate that will fluctuate over time between 50% and 100% of the Prime rate (“Prime”) for each month computed in accordance with the articles of BCE Inc. Accordingly, from May 1, 2026, the holders of Series AH Preferred Shares will continue to be entitled to receive floating adjustable cash dividends, as and when declared by the Board of Directors of BCE Inc., to be paid on the twelfth day of the subsequent month. The dividend rate will be adjusted upwards or downwards on a monthly basis by an Adjustment Factor (as described below) whenever the Calculated Trading Price, being the market price of the Series AH Preferred Shares computed in accordance with the articles of BCE Inc., is $24.875 or less or $25.125 or more, respectively. The Adjustment Factor for a month will be based on the Calculated Trading Price of the Series AH Preferred Shares for the preceding month determined in accordance with the following table:

If the Calculated Trading Price for the preceding month is:	The Adjustment Factor as a percentage of Prime shall be:
$25.50 or more	– 4.00%
$25.375 and less than $25.50	– 3.00%
$25.25 and less than $25.375	– 2.00%
$25.125 and less than $25.25	– 1.00%
Greater than $24.875 and less than $25.125	nil
Greater than $24.75 to $24.875	+ 1.00%
Greater than $24.625 to $24.75	+ 2.00%
Greater than $24.50 to $24.625	+ 3.00%
$24.50 or less	+ 4.00%

The maximum Adjustment Factor for any month will be ±4.00% of the average Prime rate for the month.

Based on the foregoing, the annual floating dividend rate for any month shall be the rate of interest expressed as a percentage per annum equal to: (a) Prime for such month, multiplied by (b) the Designated Percentage for such month, with the Designated Percentage being the Adjustment Factor for such month plus the Designated Percentage for the preceding month. The annual floating dividend rate applicable for a month will in no event be less than 50% of Prime nor will it be greater than Prime.

The following formula illustrates the manner of computing the annual floating dividend rate applicable to the month of May 2026:

Annual floating dividend		Prime for		Designated Percentage
rate for May 2026	=	May 2026	X	for May 2026*
* The Designated Percentage for the month of May 2026 is the sum of: (a) the Adjustment Factor for the month of May 2026 based on the Calculated Trading Price for the month of April 2026; and (b) the Designated Percentage for the month of April 2026

The “Designated Percentage” has been 100% (the maximum) for a long, long time..