Also keep in mind that these notes (analagous to the LRCNs being issued by banks to replace some of their preferred
 shares) are tax advantagous cuz the notes pay interest which is tax deductible for the company vs. preferred shares dividends which are paid from after tax cash inccome. ENB also just announced a similar initiative yesterday. Preferred shares are being redeemed at a tremendous rate - last year ca. $10B redeeemed vs. $2B new issuance (out of a total market value of about $60B for the entire preferred universe). Cheers!





Capharnaum wrote:
JayBanks wrote:

 

 

Can anyone explain this announcement clearer? Companies need to simplify the general news releases.

It sounds like they are talking about issuing bonds/debentures and using the money to cancel preferred shares...

Am I translating the hieroglyphs correctly or at least close or am I way off?



Basically, they issue debt which carries an interest rate close to the dividend and at some point split into a cheap credit note and a purchasable share at a set price from the issue. Ie: $1B in hybrid debt at 3-4% which in 2025 becomes a credit note at 1% payable in 2030 and is accompanied by a subscription receipt at $32 (in 2025).