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.
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.
Tim Kiladze