TSX:HSE.PR.B - Post by User
Post by
RagingBull3on Mar 28, 2020 7:52pm
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Post# 30856721
These Preferreds are very special instrument !!!
These Preferreds are very special instrument !!!These maybe better than actual bonds!!! Bonds have a Maturity date, these shares don't. Getting paid 16% forever seems nice given outlook for interest rates in the foreseeable future is bleak. Only thing is that they can be redeemed at $25.
The more I think about them the more I realize how special they are.
They are a "share" but more like a "bond".
Dividend amounts are unrelated to company performance or earnings or cash flow. Dividends Amounts are based on a Fixed % plus a Floating% times $25. Nothing to do with performance of the company.
If the company issues more common shares, they don't dilute the Preferreds. In fact the opposite happens, the Preferreds become more "valuable" as the equity becomes more, yet no effect on the dividend payment.