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Daily Update••By Frankie

Canadian Preferred Shares Market Update - February 18, 2026

Market Overview



The Canadian preferred share market showed mixed signals today with bank reset preferreds leading gains while utility issues saw modest pressure.

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Key Highlights



Bank Preferreds Rally
  • Royal Bank (RY.PR.H) gained 0.8% as investors anticipate the upcoming August reset

  • National Bank (NA.PR.K) remained strong at 6.55% yield with its wide +3.40% spread

  • BMO Series Q (BMO.PR.Q) holding firm at 6.20% yield


    • Utility Sector
  • Fortis (FTS.PR.J) declined slightly to $23.35, offering a 5.35% yield

  • Canadian Utilities (CU.PR.H) gained 7.1% on strong volume

  • Emera preferreds remain premium-priced but stable


    • Split Share News
  • Brompton Split Banc Corp (SBC) announced a 20% stock split effective February 24

  • Class A distributions increasing to $0.12/month from $0.10

  • Preferred shares maintaining 54% downside protection


    • Credit Rating Watch
  • DBRS downgraded Canadian Large Cap Leaders Split Corp to Pfd-3 from Pfd-3 (high)

  • Dividend coverage ratio dropped to 0.8x - monitor closely


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    Top Yielding Issues Today



    1. MFC.PR.J - 7.00% yield (Manulife, reset 2026)
    2. FFH.PR.G - 8.00% yield (Fairfax, higher risk)
    3. ENB.PR.B - 6.18% yield (Enbridge, P-2 rated)
    4. NA.PR.K - 6.55% yield (National Bank, P-1 rated)
    5. SLF.PR.H - 6.50% yield (Sun Life, P-1 rated)

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    Market Outlook



    With the Bank of Canada signaling potential rate cuts in 2026, reset preferreds with wide spreads remain attractive. The +3.00%+ reset spreads currently available offer good protection against rising rates while providing income.

    Recommended Action: Consider accumulating bank reset preferreds with 2026-2027 reset dates while yields remain elevated.

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    Data as of market close February 18, 2026. Not investment advice.