Preferred shares | Page 9 | Investing | Discussion forum

Rhino said
EQUITABLE GROUP INC.
EQB.PR.C trading under $24.00 per share
5.97% RATE-RESET
NEXT CALL 9/30/2024 @ $25.00 OR CANADA 5 YR + 478

-------------------------------------------------------------------

EQB Inc., formerly Equitable Group Inc., is a Canada-based company, which operates through its wholly owned subsidiary Equitable Bank. Equitable Bank provides diversified personal and commercial banking through its EQ Bank platform, eqbank.ca. It offers a diverse suite of residential lending, commercial lending, and savings solutions, including high-interest savings products and guaranteed investment certificates (GICs). It specializes in two sectors of lending services, single family residential, and commercial. It offers short-term and long-term GICs, one-year cashable GICs (redeemable after 30 days), and high interest savings accounts, which are available through authorized investment dealers, and deposit brokers across Canada. For home purchases, renewals, and refinancing, it offers a range of alternative residential mortgage products, including fixed-rate mortgages, adjustable-rate mortgages, and a Home Equity Line of Credit (HELOC). It also offers prime mortgage solutions.  

While there is no guarantee EQB will redeem these preferred shares at their par value, I do agree that, barring a sudden reversal in the interest rate and bond yield direction between now and closer to their reset date, the rate reset preferred share issuances stand solid likelihood for redemption, likely replaced by perpetual preferred share issuances (which have been rare the past ten years when interest rates have been historically low). So, given the current 5 year GoC bond yield, as at September 16, 2022, was 3.41%, I would say it's probably much more likely EQB redeems this issuance, as opposed to seeing the rates reset to 8.19% (3.41%+4.78%)., possibly/likely in tandem with an issuance of perpetual preferred shares.

Cheers,
Doug

Rhino said

Agreed! Best deal for 2 years. Picked up more shares today @ $23.00 with a current DIVIDEND yield of 6.48% (which is an interest equivalent of 9.04% for tax purposes). If redeemed in two years, then an additional bonus of a $2.00 capital gain ($25.00 - $23.00 = $2.00).  

Here we are two years later. Been an excellent holding! Shares currently @ $25.27

Shortly we'll see what their intention will be: Reset or Redemption

EQB preferred share redemption

On September 30, 2024, EQB will redeem all of the 2,911,800 outstanding shares of its Non-Cumulative 5-Year Rate Reset Preferred Shares, Series 3 (the "Series 3 Preferred Shares"). The redemption price per share for the Series 3 Preferred Shares will be $25.00 for each Series 3 Preferred Share of the Company.
The Series 3 Preferred Shares are currently listed for trading on the Toronto Stock Exchange under the symbol EQB.PR.C and will be de-listed from the TSX, as at the close of trading on September 30, 2024. Beneficial holders of Series 3 Preferred Shares should contact the financial institution, broker or other intermediary through which they hold these shares to confirm how they will receive their redemption proceeds.