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Canadian Banc Corp T.BK

Alternate Symbol(s):  CNDCF | T.BK.P.A

The Companys investment objectives are (i) to provide holders of Preferred Shares with cumulative preferential floating rate monthly cash dividends at a rate per annum equal to the Prime Rate plus 0.75%, with a minimum annual rate of 5.0% and a maximum annual rate of 7.0% (ii) to provide holders of Class A Shares with regular floating rate monthly cash distributions targeted to be at a rate per annum equal to the Prime Rate plus 2.0%, with a minimum targeted annual rate of 5.0% and a maximum targeted annual rate of 10.0% and (iii) to return the original issue price to holders of both Preferred Shares and Class A Shares at the time of the redemption of such shares on December 1, 2012.


TSX:BK - Post by User

Post by deisman03on Jul 13, 2023 11:29am
133 Views
Post# 35539382

RE Split

RE SplitThey keep more assets in the "preferred" section of the portfolio to ensure payouts. 

There is more risk in the Class A units. 

The payout on the preferreds is stable and as close to being guaranteed as it gets. 

The payout on Class A not so much

The payout on Class A units can be cut very quickly, without notice, by a decision of the BOD. It can also be raised in a similar manner. 

Of course, they will announce such decisions with a few months notice before implementing the decision. 

When this happens, the price of the units will either tank or soar, depending on the direction of the payout.

We may be very close to some sort of pay out change. 

I'm thinking their 15% rate is more than they can actually pay out in perpetuity. 

Yes, I know they have the provision to stop paying distributions when the price of the unit drops below a certain point. That doesn't mean they won't make changes if needed to keep the fund afloat. 
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