Preferred Share Report 2026: The Buyback Wave Reshaping the Market

Preferred Share Report 2026: What's Been Bought Back So Far

The Canadian preferred share market is undergoing a significant structural shift in 2026. Issuers across banks, energy, and financial services have been aggressively redeeming preferred shares — shrinking the universe of available issues and returning billions to holders.

If you're searching for a preferred share report for 2026, here's a comprehensive look at what's been bought back, who's doing it, and what it means for your portfolio.

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Major Redemptions in 2026 (Year-to-Date)

Royal Bank of Canada (RBC) — January 24, 2026

RBC kicked off the year by redeeming its Non-Cumulative 5-Year Fixed Rate Reset First Preferred Shares, Series BR on January 24, 2026. With 1,250,000 shares outstanding at a redemption price of $1,000.00 per share, this single redemption returned approximately $1.25 billion to preferred share holders. RBC simultaneously redeemed its NVCC AT1 Limited Recourse Capital Notes, Series 2.

This is part of a continuing pattern for Canada's largest bank, which has steadily reduced its preferred share capital over the past several years as it optimizes its TLAC-compliant capital structure.

Cenovus Energy — March 31, 2026

Cenovus Energy (TSX: CVE) redeemed both its Series 1 (CVE.PR.A) and Series 2 (CVE.PR.B) preferred shares on March 31, 2026, at $25.00 per share. The total redemption returned approximately $300 million to holders. Final dividends were $0.16106 per Series 1 share (2.577% fixed rate) and $0.24337 per Series 2 share (3.948% floating rate).

This redemption marks Cenovus exiting the preferred share market entirely, continuing a trend of energy companies prioritizing debt reduction and capital discipline over maintaining preferred share capital.

First National Financial — March 31, 2026

First National Financial Corporation (TSX: FN) redeemed all outstanding Class A Preference Shares, Series 1 (FN.PR.A) and Series 2 (FN.PR.B) on March 31, 2026, at $25.00 per share. Final quarterly dividends were $0.180938 per Series 1 share and $0.264329 per Series 2 share. Both series were subsequently delisted from the TSX.

CIBC — Series 43

CIBC redeemed its Non-Cumulative Rate Reset Class A Preferred Shares, Series 43 (NVCC) at $25.00 per share, with a final quarterly dividend of $0.196438 per share. This continues CIBC's pattern of redeeming older NVCC preferreds that no longer efficiently contribute to its TLAC requirements.

Broader Bank Redemption Trend

The Big Six banks have been the most active redeemers in the preferred share market. In addition to RBC's and CIBC's 2026 actions, the following bank series have been redeemed across the recent redemption cycle:

| Sector | Issuer | Redeemed Series |
|--------|--------|----------------|
| Banks | Royal Bank | RY.PR.F, RY.PR.H, RY.PR.J, RY.PR.M, Series BR |
| | TD Bank | TD.PR.W, TD.PR.Y, TD.PR.Z, TD.PF.C, TD.PF.D, TD.PF.E |
| | CIBC | CM.PR.P, CM.PR.Q, CM.PR.T, CM.PR.V |
| | BMO | BMO.PR.K, BMO.PR.N, BMO.PR.Q |
| | Scotiabank | BNS.PR.K, BNS.PR.M, BNS.PR.W |
| Insurance | Great-West Life | GWO.PR.E |
| | Fairfax | FFH.PR.G |
| Energy | Cenovus | CVE.PR.A, CVE.PR.B |
| | TC Energy | TRP.PR.G, TRP.PR.I |
| | Brookfield Infrastructure | BIP.PR.B |
| Utilities | Emera | EMA.PR.B |
| Financial Services | First National | FN.PR.A, FN.PR.B |

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How Much Capital Has Been Returned?

Estimating across all confirmed 2026 redemptions and the trailing redemption wave:

RBC Series BR alone: ~$1.25 billion

Cenovus Series 1 & 2: ~$300 million

First National Series 1 & 2: ~$150 million (estimated)

CIBC Series 43: ~$200 million (estimated)

Other bank and corporate redemptions: Several hundred million additional

The total value of preferred shares redeemed in 2026 to date comfortably exceeds $2 billion, with more redemptions expected as additional rate reset dates arrive in the second half of the year.

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Why Is This Happening? Three Key Drivers

1. TLAC and Regulatory Capital Optimization

Canadian banks are subject to Total Loss-Absorbing Capacity (TLAC) requirements under OSFI guidelines. Older NVCC preferred shares issued before the regulatory framework was finalized don't always count efficiently toward TLAC, giving banks a strong incentive to redeem and either reissue with updated terms or simply reduce their preferred share capital base.

2. Interest Rate Environment

With the Bank of Canada's policy rate at 2.25% (as of July 2026) and 5-year Government of Canada bond yields around 3.11%, many rate reset preferreds would reset to significantly higher dividend rates. Rather than pay those higher rates, issuers are choosing to redeem at par ($25) and refinance through cheaper alternatives.

3. Capital Discipline (Non-Bank Issuers)

Energy companies like Cenovus are using cash on hand to eliminate preferred share obligations entirely. With strong commodity prices and a focus on debt reduction, these companies no longer need the expensive capital that preferred shares represent.

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What This Means for the Market

The Universe Is Shrinking

We currently track approximately 250 active preferred share issues — down from a peak of over 290. Over 40 issues are now inactive due to redemptions, representing a roughly 14% contraction in the available universe.

Less Supply, Potentially Stronger Prices

Fewer outstanding preferred shares means less liquidity in the secondary market. However, it also means that demand is chasing a smaller pool of issues, which can provide price support for remaining quality preferreds — especially those from P-1 rated banks and utilities.

Reset Risk Is Redemption Risk

If you hold a preferred share approaching its reset date, there is a meaningful probability the issuer will redeem rather than pay the new higher rate. Don't assume you'll hold indefinitely. Check the reset date and call provisions for every position.

New Issues Are the Counterbalance

While redemptions shrink the market, new issuances partially replenish it. Institutional NVCC preferreds from banks, new split share corporation offerings, and occasional corporate issues help maintain a baseline of investable supply. However, new issue volume has not kept pace with redemptions.

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Outlook for the Rest of 2026

With the Bank of Canada holding rates steady at 2.25% as of its July 15, 2026 decision, the rate reset dynamics that drive redemptions remain intact. Several additional bank and insurance preferreds have reset dates arriving in Q3 and Q4 2026 — each one a potential redemption candidate.

Key things to watch:

Additional Big Six bank NVCC preferreds reaching reset dates

Manulife's Series 3/4 conversion (effective June 19, 2026)

Any new split corp or bank issuances that offset the redemption drain

Whether non-bank issuers (energy, pipelines, utilities) continue exiting

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Summary: 2026 Preferred Share Buyback Scorecard

| Metric | Value |
|--------|-------|
| Total estimated capital returned (2026 YTD) | $2+ billion |
| Largest single redemption | RBC Series BR (~$1.25B) |
| Active issues tracked | ~250 |
| Inactive (redeemed) issues | 40+ |
| Bank redemption series (all-time recent) | 15+ |
| Market contraction from peak | ~14% |

The Canadian preferred share market in 2026 is a story of supply compression. Banks are optimizing capital structures, energy companies are deleveraging, and rate reset mechanics are giving issuers every reason to call. For income-focused investors, the remaining issues offer quality and yield — but the pool is getting smaller every quarter.

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This article is for informational purposes only and does not constitute investment advice. All data is based on publicly available company announcements and market data as of July 2026. Please consult a qualified financial advisor before making any investment decisions. Past performance is not indicative of future results.