Back to all posts
Analysis••By Frankie

Preferred Share Weekly: Emera Resets at 6.35%, BCE at 5.30%, Brompton Splits, and BC Gets Downgraded

Five Stories Moving the Preferred Share Market This Week

It's been an active week for Canadian preferred shares. Multiple rate resets, a stock split, a provincial credit downgrade, and a credit rating confirmation — all in the past seven days. Here's what you need to know.

---

1. Emera Series J Resets at 6.345% — And They're Not Redeeming

Emera Incorporated (EMA.PR.J) announced on April 15 that its Cumulative Minimum Rate Reset First Preferred Shares, Series J will reset to an annual dividend rate of 6.345%.

This is a strong reset for holders. But more importantly, Emera confirmed it will not exercise its right to redeem the shares. The company is extending, which means shareholders will continue receiving dividends at the new, higher rate.

Current pricing: EMA.PR.J is trading at $26.40 — a premium to the $25.00 par value. The market is clearly pricing in the attractive new yield and Emera's commitment to keeping the issue outstanding.

Key takeaway: Utility preferreds with strong credit ratings (Emera is P-2 rated) are resetting at yields that make them competitive with riskier sectors. The 6.345% rate from a regulated utility is compelling for income investors.

---

2. BCE Series AG Resets to 5.30%

BCE Inc. announced on April 9 that its Series AG Preferred Shares (BCE.PR.G) will reset to an annual dividend rate of 5.30%, effective May 1, 2026.

BCE.PR.G is a rate reset preferred that recalculates its dividend every five years based on the 5-year Government of Canada bond yield plus a spread. With the 5-year yield around 3.05% at the time of calculation, the 5.30% reset reflects BCE's contractual spread.

Current pricing: BCE.PR.G is trading at $21.80, well below the $25.00 par value. The current yield sits at approximately 3.87%.

What's interesting: Despite the sub-par price, the new 5.30% rate means the yield on cost for new buyers will be significantly higher once the reset takes effect on May 1. At $21.80, the effective yield at the new rate would be approximately 6.07% ($1.325 annual dividend / $21.80 price). That's an attractive entry point for a P-2 rated telecom preferred.

BCE also confirmed that Series AG shares may be converted into Series AH floating rate shares at the holder's option.

---

3. Life & Banc Split Corp Announces Another Stock Split

Brompton Funds announced on April 10 that Life & Banc Split Corp (LBS) will complete a stock split of its Class A shares due to the fund's strong performance.

LBS.PR.A, the preferred share component, currently trades at $10.56 with a yield of 6.87%. The split only affects the Class A shares, but it signals that the fund's net asset value has been performing well — a positive indicator for preferred share holders who rely on the fund's coverage ratios.

Why this matters: Split corp preferred shares are only as safe as the underlying portfolio. When a split corp performs well enough to split its capital units, it means the downside protection for preferred shareholders is increasing. LBS.PR.A remains one of the higher-yielding split corp preferreds at 6.87%.

---

4. DBRS Downgrades Province of British Columbia to AA

On April 9, DBRS Morningstar downgraded the Province of British Columbia from AA(high) to AA. The agency also downgraded BC's Short-Term Debt rating.

Impact on preferred shares: A provincial downgrade doesn't directly affect corporate preferred share credit ratings, but it has indirect effects:

  • Higher borrowing costs for BC-based issuers. Companies headquartered in BC (BC Hydro, FortisBC, and others) may face a slightly higher cost environment.

  • Relative value shift. With BC bonds yielding more, income investors may shift some allocation from preferred shares back into provincial bonds, creating minor price pressure on prefs.

  • Spread widening. Corporate issuers in BC could see their credit spreads widen marginally.

    • For preferred share investors, this is a watch-but-don't-panic event. The major preferred share issuers (banks, insurers, utilities) have their own credit ratings and are not directly tied to the provincial rating.

    ---

    5. DBRS Confirms Brookfield Properties at Pfd-3(low)

    DBRS confirmed Brookfield Office Properties (BPO) at Pfd-3(low) on April 14. While a confirmation sounds neutral, the Pfd-3(low) rating is noteworthy — it's the bottom end of investment grade for preferred shares.

    Current BPO pricing:
    | Issue | Price | Yield |
    |-------|-------|-------|
    | BPO.PR.C | $25.06 | 6.10% |
    | BPO.PR.E | $23.30 | 5.90% |

    BPO.PR.C trades at a small premium to par; BPO.PR.E trades at a discount. The 6%+ yields reflect the elevated credit risk compared to P-1 rated bank preferreds.

    Key takeaway: BPO preferreds offer significantly higher yields than bank equivalents, but the Pfd-3(low) rating means investors are being compensated for real risk. The DBRS confirmation at least means the rating isn't deteriorating further — stable, but watch closely.

    ---

    Market Context:TXPR Hits 52-Week High

    The S&P/TSX Preferred Share Index (TXPR) closed Friday at 700.50, a new 52-week high, up 0.81% on the day. The CPD ETF closed at $13.91 and ZPR at $12.66 (also a 52-week high).

    Five-year Government of Canada bond yields have dropped to 3.05%, down from recent levels. Lower bond yields are pushing preferred share prices higher — the inverse relationship that income investors know well.

    With the Bank of Canada's next rate decision on April 29 (widely expected to hold at 2.25%), the preferred share market appears to be in a sweet spot: higher reset rates are boosting dividends while stable-to-lower bond yields are supporting prices.

    ---

    Data as of April 20, 2026. Pricing from TMX. This is not investment advice. Always consult a qualified financial advisor.