North American Financial 15 Split Corp T.FFN

Question on Div

[primo105]

The dividend on the prefs has historically gone up over time.  If interest rates do get cut in 2024, would this result in the prefs div being cut?

[AnEducator]

The fund reconsiders its dividend rate policy every September and adjusts it depending on market rates for similar preferred shares. There is no question in my mind that if the BOC cuts rates significantly by next September, Quadravest will declare reduced rates for 2025 for both FFN and FTN preferred shares.

[primo105]

Thanks for this.  Would you expect the trading value of FFN/FTN prefs to drop back to $9.50 range if that happens?

[NoShoesNoShirt]

quadravest will target $10 selling price, and adjust to div to achieve it.

[AnEducator]

FFN preferreds are unlikely to drop too much given next year's Special Retraction Right which allows shareholders to redeem their shares at NAV which will almost certainly be $10.00. Beyond the retraction deadline in November 2024, many factors will come into play, not just the dividend policy. The most important, in my opinion, would be the unit NAV since this determines the downside

[mouserman]

Nearly 4 $ of coverage for the preferreds at current UNIT NAV, not sure i would expect much selling in the FFN preferreds at these rates,outside of those people selling to buy FTN and others which pay higher. I note many other preferreds are getting nice jumps...