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 have drawn increased attention. The +3.00%+ reset spreads currently available provide a cushion against rising rates while producing income.

Data point: Bank reset preferreds with 2026-2027 reset dates currently show some of the widest spreads in the market while yields remain elevated.

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