BCE Conversion Notice & Preferred Share Market Update
BCE Preferred Share Conversion Notice
BCE Inc. has announced conversion rights for holders of Series AM Preferred Shares (BCE.PR.M). Shareholders have until March 16, 2026 to elect conversion to floating-rate Series AN shares (BCE.PR.N).
Key Details:
- Conversion deadline: March 16, 2026 at 5:00 PM ET
- Fixed rate for Series AM starting March 31, 2026: 4.837% (Government of Canada 5-year yield + 2.09%)
- Floating rate for Series AN: T-Bill rate + 2.09% (currently ~4.28%)
- Minimum 1,000,000 shares must remain outstanding for each series
The decision between fixed and floating depends on your interest rate outlook. With the Bank of Canada signaling potential rate cuts, the floating rate option may offer better returns if rates decline.
TransAlta Conversion Rights
TransAlta Corporation has announced it will not redeem its Series A (TA.PR.D) or Series B (TA.PR.E) preferred shares on March 31, 2026. Holders of Series A shares may convert to Series B floating-rate shares on a one-for-one basis.
Bell Canada Hybrid Notes
Bell Canada issued $1.5 billion in hybrid notes with spreads of 2.39-2.44% over Government of Canada yields. This demonstrates corporations can still raise capital at relatively attractive rates compared to preferred share dividend spreads of 2.0-2.5%.
Current Market Yields
Preferred share yields remain attractive for income investors:
- Perpetual-Discount: 5.70% median yield (7.41% interest-equivalent)
- FixedReset Discount: 5.77% median yield
- Insurance Straight: 5.56% median yield
- FixedReset Insurance Non: 5.23% median yield
The spread between perpetual-discount preferreds and long corporate bonds has narrowed to approximately 260 basis points.
US Labor Market Impact
The US economy shed 92,000 jobs in February, pushing unemployment to 4.4%. This weaker-than-expected data increases the probability of Federal Reserve rate cuts, which would benefit floating-rate preferred shares and rate-reset issues approaching reset dates.
What to Watch
- BCE conversion deadline: March 16, 2026
- Bank of Canada policy meeting: March 17-18, 2026
- TransAlta conversion date: March 31, 2026
- Government of Canada bond yields for reset calculations
Data is for informational purposes only. Not investment advice. Consult a qualified financial advisor before making investment decisions.