TC Energy Explains Dividend Options for Preferred Shares
Overview of TC Energy's Dividend Announcement
TC Energy Corporation has shared important updates regarding its Cumulative Redeemable First Preferred Shares, specifically Series 9 and Series 10. As part of its commitment to transparency and shareholder engagement, the company announced it will not redeem its Series 9 Shares on the previously scheduled date. This decision allows shareholders to consider their options carefully moving forward.
Series 9 and Series 10 Shares: What Are the Options?
Holder of the Series 9 Shares are presented with two primary options. They may:
- Maintain their Series 9 Shares and continue receiving a stable quarterly fixed-rate dividend.
- Convert their Series 9 Shares into Series 10 Shares for a floating rate quarterly dividend.
Fixed and Floating Dividend Rates
The fixed dividend rate for Series 9 Shares is set at 5.080% for a five-year period starting from the end of October. This is available until October 30, 2029, ensuring stability for shareholders opting for this route.
On the other hand, if shareholders opt to convert their shares to Series 10 and receive a floating dividend rate, the initial rate is pegged at 6.329% for the first quarter following the conversion. This floating rate will be adjusted quarterly, which can be attractive for investors seeking to maximize their returns over time.
Important Conversion Instructions for Shareholders
It is crucial for beneficial owners of Series 9 Shares to act quickly if they choose to convert. They should reach out to their broker or nominee by the deadline, which is set for mid-October. Participation by this date is vital to ensure the conversion process is completed successfully.
Conditions Surrounding Conversion
There are specific conditions linked to the conversion of shares. If post-conversion, there would be fewer than one million Series 9 Shares outstanding, all remaining will be transformed into Series 10 Shares on a one-for-one basis. Conversely, if Series 10 Shares fall below this threshold, no conversions into Series 10 will occur. These decisions will be communicated by TC Energy no later than a predetermined date.
Future Conversion Opportunities
Shareholders of both Series 9 and Series 10 Shares will have additional opportunities to convert their shares every five years after the initial conversion. This feature provides flexibility and allows investors to adapt their holdings based on changing market or personal circumstances.
About TC Energy
As a leading energy company, TC Energy is dedicated to moving, generating, and storing energy across North America. With a workforce of over 7,000, the company tackles complex energy challenges innovatively. Whether it's supplying natural gas to global markets or investing in cleaner energy initiatives, TC Energy strives to create value while ensuring sustainable returns for its investors.
Shares of TC Energy are publicly listed on both TSX and NYSE under the ticker symbol TRP, illustrating their strong presence in the energy sector. For the latest updates and detailed information about their operations, interested parties can visit the official TC Energy website.
Frequently Asked Questions
What is the fixed dividend rate for Series 9 Shares?
The fixed dividend rate for Series 9 Shares is established at 5.080% for five years starting from October 30, 2024.
How can shareholders convert their Series 9 Shares to Series 10 Shares?
Shareholders must notify their brokers by the conversion deadline, which is 5 p.m. EDT on October 15, 2024.
What happens if fewer than one million Series 9 Shares remain after conversion?
If there are fewer than one million Series 9 Shares outstanding, all will convert to Series 10 Shares automatically on October 30, 2024.
Can I convert my shares again in the future?
Yes, shareholders will have opportunities to convert their shares every five years after the initial conversion.
How does TC Energy contribute to energy sustainability?
TC Energy innovates in natural gas delivery and works to reduce emissions from its operations, promoting a sustainable energy future for all.
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