This feature guarantees the holder of the issue, a minimum yield at the next reset. So far this is only available with the 5 Year Resets. The List of Minimum Rate Reset Preferred Shares presented here is up today. This list is updated each day. Consequently, new issues appear and redeemed issues are removed. That minimum rate for some fixed income investors is important, because as buyers they can count on a minimum dividend. They are guaranteed – when the reset period rolls around in five years, they will own a security that will pay them at least what they are currently being offered.
Why You Should Hold Minimum Rate Resets
- Guaranteed miminum dividend at the next reset, regardless the five-year Canada bond rate. You have no downside.
- If rates go up you still participate in the upside. Your new yield will be the five-year Canada bond rate plus the issue spread.
- When rates go down the share price remains close to the face value and in some cases it exceeds.
Possible Cons of Minimum Rate Resets
- As with all resets, the issuer can redeem them at the end of the 5year period. If rates are low, the issuer can just issue a new set at a substantially lower lower rate. In this case, it makes financial sense for the issuer to redeem them.
- The Minumum is insurance and as such, it’s a trade off between a higher base coupon and spread versus a lower coupon and spread with the guarantee.
List of Minimum Rate Reset Preferred Shares Today
If you are looking for a way to evaluate all Minimum Rate Reset go to Compare Minimum Rate Reset Preferred Shares. The metrics provided in the tool make it easier to narrow your selection.
Here is the list of all the Minimum Rate Reset Preferred Shares.
Canadian Preferred Shares – Mission
Our mission is to provide the average investor with the knowledge, up to date information, latest trends, data and tools to select the best preferreds to purchase or sell today.
Without tools like the ones we provide here, its simply not possible to make an educated decision, thus keeping most individual investors away. Our tools provide an overall view, of the preferreds market. With a few clicks you can easily locate today’s best preferreds within a sector/category or across the whole market.
Using our homepage as a starting point you can access all of our tools.