BCE.PR.I Resets to 5.10%: A Complete Guide to FixedReset Preferred Share Mechanics

BCE Announces 5.10% Reset Rate for Series AI Preferred Shares

BCE Inc. has announced that its Series AI Preferred Shares (BCE.PR.I) will reset to a fixed dividend rate of 5.10% effective August 4, 2026. The announcement came via a print advertisement in The Globe and Mail — a reminder that some of Canada's largest issuers still rely on century-old communication methods for material shareholder information.

The 5.10% rate will apply for the next five-year period, with quarterly dividend payments as declared by BCE's Board of Directors. Shareholders who do not elect conversion will continue holding fixed-rate Series AI shares at the new rate.

The Conversion Decision: Series AI vs Series AJ

Holders of BCE.PR.I have a critical decision to make before the conversion deadline. Key details:

• Conversion deadline: July 22, 2026 at 5:00 PM Eastern Time


• Conversion option: Exchange Series AI (fixed-rate) shares one-for-one into Series AJ (floating-rate) shares


• Fixed rate (BCE.PR.I): 5.10% annually, paid quarterly for the next five years


• Floating rate (BCE.PR.J): Based on the GoC 3-month T-bill rate plus a spread, adjusted quarterly


• Minimum outstanding: At least 1,000,000 shares must remain in each series for it to continue

If holders of fewer than 1,000,000 Series AI shares elect to convert to Series AJ, BCE will not proceed with the conversion of any Series AI shares. Conversely, if holders of fewer than 1,000,000 Series AI shares elect to remain in the fixed-rate shares, all converting shareholders will remain in Series AI.

Understanding the 5.10% Reset Rate

The reset rate of 5.10% is calculated as follows:

• Base rate: The Government of Canada 5-year bond yield as of July 7, 2026


• Spread: The spread over the GoC 5-year yield defined in the share's original prospectus


• Minimum floor: The rate cannot be less than 80% of the GoC 5-year yield (compounded semi-annually)

The 5.10% rate tells us that the GoC 5-year yield plus BCE's contractual spread equals this amount. With GoC 5-year yields in the range of 2.75-3.00% in mid-2026, BCE.PR.I's spread over the benchmark is approximately 210-235 basis points — a competitive level for a high-quality telecommunications issuer.

How FixedReset Preferred Shares Work

FixedReset preferreds are the dominant structure in the Canadian preferred share market. Here's a plain-language explanation of the mechanics:

• Initial fixed rate: Set at issuance for a 5-year period


• Reset date: Every 5 years, the dividend rate is recalculated based on the then-current Government of Canada 5-year yield plus a fixed spread


• Conversion right: At each reset, holders can convert to a floating-rate variant (typically tied to the 3-month T-bill rate)


• New fixed period: Holders who don't convert receive the new fixed rate for another 5 years


• Redemption right: The issuer typically has the right to redeem the shares at $25.00 par at the reset date

This structure gives investors a measure of inflation and interest rate protection — unlike perpetual preferreds, which pay the same dividend forever. If rates rise over five years, the reset captures that increase. The trade-off is that if rates fall, the new dividend rate also drops.

Fixed vs Floating: Making the Conversion Decision

For BCE.PR.I holders facing the July 22 conversion deadline, the choice between fixed and floating comes down to interest rate expectations:

Stay Fixed (Series AI at 5.10%) if you believe:

• Rates will remain stable or decline over the next five years


• You value predictable, known income for planning purposes


• The 5.10% rate meets your income needs regardless of rate movements

Convert to Floating (Series AJ) if you believe:

• The Bank of Canada will raise rates from the current 2.25% overnight target


• Inflation pressures will persist and push short-term rates higher


• You want to participate in any rate increases without waiting for the next 5-year reset

With the BoC holding at 2.25% and inflation cooling (US CPI fell to 3.5% in June), the case for staying fixed is currently stronger. A guaranteed 5.10% for five years is an attractive yield in a stable-rate environment, and the floating-rate alternative would need the GoC 3-month T-bill rate to rise meaningfully to outperform.

What BCE.PR.I's Reset Tells Us About the Market

The 5.10% reset rate provides useful market intelligence:

• Competitive yield: 5.10% compares favorably to GIC rates and government bonds of similar duration


• Credit quality signal: BCE's spread of ~210-235 bps over GoC 5-year reflects the market's assessment of telecommunications credit risk — relatively tight for an investment-grade issuer


• Rate expectations: The fact that this rate is attractive to investors suggests the market does not expect aggressive rate hikes in the near term


• Reset spread benchmark: Other FixedReset issues resetting around the same time will be compared against this 5.10% benchmark

BCE's Preferred Share Universe

BCE Inc. is one of the most prolific preferred share issuers in Canada, with 24 separate preferred share classes outstanding across various structures:

• FixedRate Reset issues (Series AA through AJ and beyond)


• Floating-rate counterparts paired with each FixedReset series


• Older perpetual issues that predate the FixedReset era

The BCE.PR.I / BCE.PR.J pair represents the FixedReset / FloatingRate duality. BCE.PR.I is classified as a FixedFloater (the fixed-rate leg of the pair), while BCE.PR.J functions as a RatchetRate preferred — a structure that adjusts based on a formula tied to short-term benchmark rates.

Key Takeaways for Preferred Share Investors

• BCE.PR.I resets to 5.10% on August 4, 2026 — an attractive yield in the current environment


• The conversion deadline is July 22, 2026 — holders must act before 5:00 PM ET


• With the BoC on hold at 2.25%, staying fixed at 5.10% is the more attractive option for most holders


• The reset spread of ~210-235 bps over GoC 5-year yields is competitive for a high-grade issuer


• FixedReset mechanics provide built-in rate protection that perpetual preferreds lack


• BCE's 24 preferred share classes make it one of the most diversified issuers in the Canadian market