Canadian Prefs

[wisowis]

Just to follow-up on my previous post about the Artis prefs, the option to convert to an open-end trust was approved at the latest shareholder meeting. And in the Q1 earnings call, Samir brings up the redemption of the prefs:

 

Quote

Jenny Ma

Speaking of capital allocation, just wondering what your thoughts were on the preferred piece of the capital stack. I know you've been sort of buying back a little bit at a time. Are there any limitations with regards to what you do with that piece? And how do you think about it over the longer term?

 

Samir Manji

Jenny, the 3 classes of prefs that we have, as you know, have varying maturity dates going into 2022 and 2023, insofar as a reset dates that provide Artis on those reset dates with the option if we so choose to redeem and extinguish the respective class of prefs. And so at this point, we have been active, as you've noted, in a modest -- in a very modest way with respect to the prefs. And with respect to any longer-term decisions or medium-term decisions for 2022 and 2023, we have not made any final determinations, but we will explore and evaluate that as we keep going. I would also say in the spirit of transparency that those that understand some of the technical details with respect to one of the areas we have raised and have sought unitholder approval for at the upcoming annual general and special meeting on May '21, is to provide the Board with the flexibility as time passes to move from a closed-end structure to an open-ended structure. And that exercise, if it was something that unitholders approve and the Board then has that flexibility around if the Board was to exercise that conversion, likely with it would come the redemption certainly of some of the -- 2, if not all 3, of the classes of press [sic] that we have outstanding at those reset dates in 2022 and 2023.

 

[bizaro86]

Great call on the Artis prefs!