Skip to main content

The Globe and Mail

Preferred shares basking in the spotlight

TransAlta Corp. is in the market with a new issue of rate reset preferred shares Thursday, just a day after Capital Power Corp. offered $125-million of the same securities.

These companies follow in the footsteps of CU Inc., which raised $75-million a few weeks back, and Great-West Lifeco Inc., which raised $250-million the day before. BAM Split Corp. also recently came with a $110-million issue, and Brookfield had a few more back in October.

Why all this issuance now? Because there's investor demand. Lots of it. TransAlta's $200-million has already been upsized to $250-million in a matter of about two hours. This environment is very similar to when banks were issuing rate reset shares left, right and centre during the financial crisis -- and investors kept gobbling them up.

Story continues below advertisement

TransAlta's rate reset preferred shares pay 4.6 per cent, 203 basis points above 5-year Canada bonds. CIBC World Markets, RBC Capital Markets and Scotia Capital are co-lead managers.

Capital Power's deal was worth $125-million and also paid 4.6 per cent, 217 basis points above 5-year Canada bonds. TD Securities and RBC co-led the offering.

Report an error
About the Author
Reporter and Streetwise columnist

Tim Kiladze is a business reporter with The Globe and Mail. Before crossing over to journalism, he worked in equity capital markets at National Bank Financial and in fixed-income sales and trading at RBC Dominion Securities. Tim graduated from Columbia University's Graduate School of Journalism and also earned a Bachelor in Commerce in finance from McGill University. More

Comments are closed

We have closed comments on this story for legal reasons. For more information on our commenting policies and how our community-based moderation works, please read our Community Guidelines and our Terms and Conditions.

Combined Shape Created with Sketch.

Combined Shape Created with Sketch.

Thank you!

You are now subscribed to the newsletter at

You can unsubscribe from this newsletter or Globe promotions at any time by clicking the link at the bottom of the newsletter, or by emailing us at privacy@globeandmail.com.