As I have mentioned, I fully expect CWB to redeem their CWB.PR.D shares on April 30. Those shares would otherwise reset at a huge spread of 5.04% above the 5 year Canada bond yield.
I had thought that the CWB.PR.B rate reset preferred shares would not likely be redeemed given their lower 2.66% spread. But I was taking another look at the fact that CWB issued a $250 million in subordianted debt paying 5.95% (a non-viability contingent capital debt) on January 15 “for general corporate purposes). The two preferred shares together can be redeemed for $250 million and that may be what they are planning. Bank capital rules are constantly changing and CWB has been using the new “Limited Recourse Capital Notes” as well as using more subordinated debt.
Overall it is still very uncertain but I am starting to think that the CWB.PR.B shares may well be redeemed at $25 on April 30. That would be a nice gain from the current $21.52 price. But it’s far from certain that they will be redeemed. If the 5 year Canada bond yield, currently at about 3.7% is down towards 3.0% on April 30, the bank may be less inclined to redeem these.