ASC.PR.A Squeaks Out Default Avoidance

June 1st, 2011

Manulife Investments / Manulife Financial has issued a press release:

AIC Global Financial Split Corp. (TSX: ASC/ASC.PR.A) (the “Corporation”) today announced that the Corporation completed the redemption of all of its outstanding Preferred Shares and Class A Shares and terminated on May 31, 2011 (the “Termination Date”), as contemplated by the constating documents of the Corporation. In connection therewith, the Corporation redeemed each Class A Share for $.0643 per share. Preferred Shares were redeemed for $10.00 per share plus any accrued dividends. The redemption proceeds will be paid by the Corporation on or about June 6, 2011 through CDS Clearing and Depository Services Inc.

ASC.PR.A was last mentioned on PrefBlog in the post ASC.PR.A Holders to Get Partial Dividend on Redemption. Preferred shareholders were victorious in the shareholder vote, despite a recommendation by the directors of the firm:

  • Paul Lorentz
  • Sheila Hart
  • Jennifer Mercanti
  • Warren Law

that they should vote in favour of the plan. Hey guys – just a little friendly advice: if I should ever advertise an opening for an entry credit analysis position, don’t spend a lot of money express-posting your resume, OK?

ASC.PR.A was tracked by HIMIPref™ prior to its maturity.

YLO: There is NO NEWS

June 1st, 2011

Yellow Media has announced:

is issuing this press release regarding certain market speculation at the request of the Investment Industry Regulatory Organization of Canada, on behalf of the Toronto Stock Exchange.

Yellow Media Inc. is today providing an update on the status of its definitive agreement to sell Trader Corporation to funds advised by Apax Partners announced on March 25, 2011. While it is Yellow Media Inc.’s policy not to comment on market rumours or speculation, the company is today confirming that the transaction is proceeding as planned and in accordance with the terms of the definitive agreement entered into between Yellow Media Inc. and Apax Partners. The transaction is subject to regulatory approvals and other customary conditions.

Under the terms of the definitive agreement, Yellow Media Inc. has agreed to sell Trader Corporation to funds advised by Apax Partners for a purchase price consideration of $745 million in cash, subject to working capital and other adjustments. The proceeds from the sale will be largely used to reduce indebtedness and for general corporate purposes. For more information about this transaction, refer to the press release issued on March 25, 2011 at: http://www.ypg.com/en/newsroom/488-yellow-media-inc-announces-the-divestiture-of-trader-corporation.

The company reaffirms its cash dividend of $0.65 annually per common share. The company has a stated dividend payout policy representing between 60% and 70% of Adjusted Earnings per share. The dividend policy is reviewed periodically by the Board of Directors of Yellow Media Inc. taking into account a number of factors including, among others, the current and prospective performance of the business.

YLO has four issues of preferred shares outstanding: YLO.PR.A, YLO.PR.B (Operating Retractible) and YLO.PR.C & YLO.PR.D (FixedReset). All are tracked by HIMIPref™ and all are assigned to the Scraps index on credit concerns.

The recent precipituous decline in these issues has been highly entertaining and was reported on PrefBlog on May 25, May 26, May 27, May 30 and May 31.

SJR.PR.A

May 31st, 2011

SJR.PR.A, the 4.50%+200 FixedReset announced May 18 settled today, trading 603,924 shares in a range of 25.00-19 before closing at 25.10-13, 20×22.

Vital statistics are:

SJR.PR.A FixedReset YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2041-05-31
Maturity Price : 25.05
Evaluated at bid price : 25.10
Bid-YTW : 4.29 %

SJR.PR.A is tracked by HIMIPref™, but is assigned to the Scraps index on credit concerns.

May 31, 2011

May 31st, 2011

There was a yellow cat bounce today.

YLO Issues, 2011-5-31
Ticker Quote
5/30
Quote
5/31
Bid YTW
5/31
YTW
Scenario
5/31
Performance
5/31
(bid/bid)
YLO.PR.A 22.80-90 23.10-23 10.09% Soft Maturity
2012-12-30
-1.46%
YLO.PR.B 15.64-80 16.57-59 13.62% Soft Maturity
2017-06-29
+5.95%
YLO.PR.C 16.57-70 16.89-01 9.88% Limit Maturity +1.93%
YLO.PR.D 17.85-00 17.59-70 9.67% Limit Maturity -1.46%

It was a relatively quite day on the Canadian preferred share market, with PerpetualDiscounts up 6bp, FixedResets basically flat and DeemedRetractibles gaining 4bp. Volatility was muted, with only two issues on the Performance Highlights table. FixedResets thoroughly dominated the Volume Highlights table, possibly due to the settlement today of SJR.PR.A; although it looks like HSBC (who?) got some work acting for a big client reducing preferred share exposure in a big way.

HIMIPref™ Preferred Indices
These values reflect the December 2008 revision of the HIMIPref™ Indices

Values are provisional and are finalized monthly
Index Mean
Current
Yield
(at bid)
Median
YTW
Median
Average
Trading
Value
Median
Mod Dur
(YTW)
Issues Day’s Perf. Index Value
Ratchet 0.00 % 0.00 % 0 0.00 0 -0.1631 % 2,458.9
FixedFloater 0.00 % 0.00 % 0 0.00 0 -0.1631 % 3,698.1
Floater 2.45 % 2.24 % 42,832 21.63 4 -0.1631 % 2,654.9
OpRet 4.87 % 3.54 % 66,952 0.97 9 -0.0815 % 2,421.3
SplitShare 5.23 % -0.60 % 61,773 0.54 6 0.0644 % 2,506.9
Interest-Bearing 0.00 % 0.00 % 0 0.00 0 -0.0815 % 2,214.1
Perpetual-Premium 5.66 % 5.01 % 163,642 1.43 12 -0.0016 % 2,074.9
Perpetual-Discount 5.45 % 5.52 % 124,707 14.53 18 0.0608 % 2,179.0
FixedReset 5.15 % 3.23 % 194,864 2.85 57 -0.0017 % 2,309.9
Deemed-Retractible 5.08 % 4.91 % 299,630 8.17 47 0.0441 % 2,150.6
Performance Highlights
Issue Index Change Notes
POW.PR.D Perpetual-Discount -1.38 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2041-05-31
Maturity Price : 23.35
Evaluated at bid price : 23.61
Bid-YTW : 5.36 %
BAM.PR.M Perpetual-Discount 1.29 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2041-05-31
Maturity Price : 21.65
Evaluated at bid price : 22.00
Bid-YTW : 5.47 %
Volume Highlights
Issue Index Shares
Traded
Notes
HSE.PR.A FixedReset 191,865 RBC bought blocks of 25,000 and 127,700 from anonymous, both at 25.60.
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2041-05-31
Maturity Price : 25.47
Evaluated at bid price : 25.52
Bid-YTW : 4.06 %
SLF.PR.G FixedReset 144,488 HSBC (who?) shold four blocks: three, of 49,200 shares, 25,000 and 45,900 to RBC at 25.25; and one of 10,000 to TD at the same price.
YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2022-01-31
Maturity Price : 25.00
Evaluated at bid price : 25.25
Bid-YTW : 3.78 %
TD.PR.Y FixedReset 143,292 TD sold four blocks of 10,000 each to TD at 26.25; then another 30,000 to RBC at the same price. TD crossed 29,400 at the same price; RBC crossed 30,000 at the same price again.
YTW SCENARIO
Maturity Type : Call
Maturity Date : 2013-11-30
Maturity Price : 25.00
Evaluated at bid price : 26.25
Bid-YTW : 3.20 %
BNS.PR.Q FixedReset 84,032 TD bought 35,000 from anonymous at 26.15; then bought blocks of 15,000 and 25,000 from HSBC at the same price.
YTW SCENARIO
Maturity Type : Call
Maturity Date : 2013-11-24
Maturity Price : 25.00
Evaluated at bid price : 26.11
Bid-YTW : 3.23 %
RY.PR.W Perpetual-Discount 75,670 RBC bought blocks of 11,700 shares, 10,300 and 12,000, all at 24.80.
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2041-05-31
Maturity Price : 24.47
Evaluated at bid price : 24.78
Bid-YTW : 4.96 %
TD.PR.G FixedReset 65,983 TD bought blocks of 39,800 and 14,100 from HSBC at 27.35.
YTW SCENARIO
Maturity Type : Call
Maturity Date : 2014-05-30
Maturity Price : 25.00
Evaluated at bid price : 27.41
Bid-YTW : 3.09 %
There were 44 other index-included issues trading in excess of 10,000 shares.
Wide Spread Highlights
Issue Index Quote Data and Yield Notes
FTS.PR.G FixedReset Quote: 25.90 – 27.00
Spot Rate : 1.1000
Average : 0.7567

YTW SCENARIO
Maturity Type : Call
Maturity Date : 2013-10-01
Maturity Price : 25.00
Evaluated at bid price : 25.90
Bid-YTW : 3.55 %

CIU.PR.C FixedReset Quote: 25.20 – 25.75
Spot Rate : 0.5500
Average : 0.3225

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2041-05-31
Maturity Price : 25.15
Evaluated at bid price : 25.20
Bid-YTW : 3.61 %

IAG.PR.C FixedReset Quote: 26.71 – 27.24
Spot Rate : 0.5300
Average : 0.4162

YTW SCENARIO
Maturity Type : Call
Maturity Date : 2014-01-30
Maturity Price : 25.00
Evaluated at bid price : 26.71
Bid-YTW : 3.32 %

GWO.PR.J FixedReset Quote: 26.60 – 27.00
Spot Rate : 0.4000
Average : 0.2878

YTW SCENARIO
Maturity Type : Call
Maturity Date : 2014-01-30
Maturity Price : 25.00
Evaluated at bid price : 26.60
Bid-YTW : 3.30 %

SLF.PR.F FixedReset Quote: 27.01 – 27.34
Spot Rate : 0.3300
Average : 0.2355

YTW SCENARIO
Maturity Type : Call
Maturity Date : 2014-07-30
Maturity Price : 25.00
Evaluated at bid price : 27.01
Bid-YTW : 3.17 %

BMO.PR.H Deemed-Retractible Quote: 25.43 – 25.73
Spot Rate : 0.3000
Average : 0.2103

YTW SCENARIO
Maturity Type : Call
Maturity Date : 2013-03-27
Maturity Price : 25.00
Evaluated at bid price : 25.43
Bid-YTW : 4.37 %

May 30, 2011

May 30th, 2011

Greece is sliding closer to bankruptcy:

The European Union may withhold the next amount of credit to Greece after a report by an international panel of inspectors concluded that the debt-laden country has missed all the fiscal targets agreed in its rescue plan, Der Spiegel said, without saying how it obtained the information.

Portuguese 10-year bonds fell the most in a week, sending the yield spread with German bunds, Europe’s benchmark government security, 18 basis points higher to 678 basis points, the most since Bloomberg began gathering the data in 1997. Italian 10-year yields rose six basis points to 4.81 percent after the government sold 8.3 billion euros ($12 billion) debt. Spain is due to sell debt on June 2.

and Moody’s put Japan on Review-Negative.

Yellow bellies continued to panic.

YLO Issues, 2011-5-30
Ticker Quote
5/27
Quote
5/30
Bid YTW
5/30
YTW
Scenario
5/30
Performance
5/30
(bid/bid)
YLO.PR.A 23.10-20 22.80-90 10.97% Soft Maturity
2012-12-30
-1.30%
YLO.PR.B 16.40-82 15.64-80 14.86% Soft Maturity
2017-06-29
-4.63%
YLO.PR.C 17.67-33 16.57-70 10.08% Limit Maturity -6.23%
YLO.PR.D 18.32-40 17.85-00 9.52% Limit Maturity -2.57%

It was a mixed day on the Canadian preferred share market, with PerpetualDiscounts gaining 17bp, FixedResets basically flat, and DeemedRetractibles down 4bp. Volatility was minimal, with only one entry in the Performance Highlights table. Volume was OK, a little on the low side, as befits a day when the US market was closed.

HIMIPref™ Preferred Indices
These values reflect the December 2008 revision of the HIMIPref™ Indices

Values are provisional and are finalized monthly
Index Mean
Current
Yield
(at bid)
Median
YTW
Median
Average
Trading
Value
Median
Mod Dur
(YTW)
Issues Day’s Perf. Index Value
Ratchet 0.00 % 0.00 % 0 0.00 0 -0.0349 % 2,462.9
FixedFloater 0.00 % 0.00 % 0 0.00 0 -0.0349 % 3,704.1
Floater 2.45 % 2.24 % 43,170 21.63 4 -0.0349 % 2,659.3
OpRet 4.87 % 2.67 % 63,149 0.41 9 0.0772 % 2,423.3
SplitShare 5.23 % -0.60 % 60,309 0.54 6 -0.2393 % 2,505.3
Interest-Bearing 0.00 % 0.00 % 0 0.00 0 0.0772 % 2,215.9
Perpetual-Premium 5.66 % 4.81 % 165,879 1.43 12 0.0872 % 2,074.9
Perpetual-Discount 5.45 % 5.54 % 125,579 14.46 18 0.1709 % 2,177.7
FixedReset 5.15 % 3.18 % 196,125 2.85 57 0.0046 % 2,310.0
Deemed-Retractible 5.07 % 4.92 % 302,894 8.14 47 -0.0378 % 2,149.7
Performance Highlights
Issue Index Change Notes
SLF.PR.F FixedReset 1.23 % YTW SCENARIO
Maturity Type : Call
Maturity Date : 2014-07-30
Maturity Price : 25.00
Evaluated at bid price : 27.19
Bid-YTW : 2.94 %
Volume Highlights
Issue Index Shares
Traded
Notes
CM.PR.G Perpetual-Premium 100,850 Seeking NVCC status.
YTW SCENARIO
Maturity Type : Call
Maturity Date : 2014-05-31
Maturity Price : 25.00
Evaluated at bid price : 25.20
Bid-YTW : 5.30 %
CIU.PR.A Perpetual-Discount 100,000 RBC crossed blocks of 30,000 and 70,000, both at 22.51.
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2041-05-30
Maturity Price : 22.35
Evaluated at bid price : 22.50
Bid-YTW : 5.13 %
CM.PR.H Deemed-Retractible 84,032 Called for redemption.
YTW SCENARIO
Maturity Type : Call
Maturity Date : 2011-06-29
Maturity Price : 25.75
Evaluated at bid price : 25.90
Bid-YTW : 2.23 %
RY.PR.W Perpetual-Discount 61,841 RBC bought 11,300 from TD at 24.89.
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2041-05-30
Maturity Price : 24.44
Evaluated at bid price : 24.75
Bid-YTW : 4.97 %
RY.PR.X FixedReset 45,940 TD crossed 40,000 at 27.45.
YTW SCENARIO
Maturity Type : Call
Maturity Date : 2014-09-23
Maturity Price : 25.00
Evaluated at bid price : 27.40
Bid-YTW : 3.26 %
TD.PR.K FixedReset 36,977 TD crossed 30,000 at 27.60.
YTW SCENARIO
Maturity Type : Call
Maturity Date : 2014-08-30
Maturity Price : 25.00
Evaluated at bid price : 27.58
Bid-YTW : 3.08 %
There were 29 other index-included issues trading in excess of 10,000 shares.
Wide Spread Highlights
Issue Index Quote Data and Yield Notes
TCA.PR.X Perpetual-Premium Quote: 50.32 – 50.74
Spot Rate : 0.4200
Average : 0.2623

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2041-05-30
Maturity Price : 47.07
Evaluated at bid price : 50.32
Bid-YTW : 5.55 %

IAG.PR.C FixedReset Quote: 26.82 – 27.25
Spot Rate : 0.4300
Average : 0.2915

YTW SCENARIO
Maturity Type : Call
Maturity Date : 2014-01-30
Maturity Price : 25.00
Evaluated at bid price : 26.82
Bid-YTW : 3.15 %

BNS.PR.O Deemed-Retractible Quote: 25.95 – 26.34
Spot Rate : 0.3900
Average : 0.2594

YTW SCENARIO
Maturity Type : Call
Maturity Date : 2017-05-26
Maturity Price : 25.00
Evaluated at bid price : 25.95
Bid-YTW : 4.99 %

POW.PR.B Perpetual-Discount Quote: 24.43 – 24.78
Spot Rate : 0.3500
Average : 0.2285

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2041-05-30
Maturity Price : 24.17
Evaluated at bid price : 24.43
Bid-YTW : 5.54 %

TRI.PR.B Floater Quote: 23.26 – 23.75
Spot Rate : 0.4900
Average : 0.3860

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2041-05-30
Maturity Price : 22.99
Evaluated at bid price : 23.26
Bid-YTW : 2.24 %

GWO.PR.M Deemed-Retractible Quote: 25.60 – 25.85
Spot Rate : 0.2500
Average : 0.1547

YTW SCENARIO
Maturity Type : Call
Maturity Date : 2019-04-30
Maturity Price : 25.00
Evaluated at bid price : 25.60
Bid-YTW : 5.61 %

May 27, 2011

May 27th, 2011

US housing sales are slow:

The number of Americans signing contracts to buy previously owned homes plunged more than forecast in April, a sign the industry that triggered the recession continues to struggle.

The index of pending home resales declined 12 percent after a revised 3.5 percent increase the prior month, the National Association of Realtors said today in Washington. The median forecast in a Bloomberg News survey called for a 1 percent decline.

The prospect that foreclosures will continue to drive down property values may keep buyers on the sidelines awaiting further price declines. Unemployment at 9 percent and stricter credit requirements are further signs that a housing recovery may take years to unfold.

And things are unfolding elsewhere, too:

Dexia SA (DEXB), the bank that took the most Federal Reserve discount-window help in October 2008, said it will take a charge of 3.6 billion euros ($5.1 billion) for the anticipated sale of mostly U.S. residential mortgage-backed securities and long-term bond disposals.

By writing down the U.S. asset-backed securities to their market value, Dexia said it will be in a position to waive the Belgian and French state guarantees covering losses on those assets and renegotiate the terms and consequences arising from the state support.

Note that they’re going to “take a charge” rather than cover the loss with reserves. That gives you a nice warm feeling about European bank balance sheets, doesn’t it?

Long-term readers of PrefBlog will recognize one of my hobby-horses: genetic modification of cellular organisms to take carbon dioxide out of the air (good) and convert it to fuel (better). So I was pleased to see news of the Solazyme IPO:

Solazyme Inc., the developer of oil products from genetically modified algae, jumped as much as 22 percent in its first day of trading.

The shares rose $3.15, or 18 percent, to $21.15 at 1:18 p.m. in Nasdaq Stock Market trading. Earlier it reached $22, a 22 percent gain from its initial price of $18 a share. The South San Francisco, California-based company sold 10.975 million shares, raising $197.55 million, according to a regulatory filing.

The demand validates the technology used to convert organic material into biofuels and specialty chemicals, according to Pavel Molchanov, an analyst for Raymond James & Associates Inc. It remains to be seen whether Solazyme, or rivals that are developing similar products such as Gevo Inc., and Amyris Inc. (AMRS), can do so cost-effectively.

“The science in their process works,” Molchanov said today in a telephone interview. “So as we think about the risk factors that investors in these companies have to confront, it’s not a science risk. It’s how successfully can they scale up to be a large production business.”

The logic of the third paragraph there rivals that seen during the Tech Boom, but never mind (the demand validates the science? Let’s take a vote on gravity!). Note that I have no idea of whether the science works, whether the engineering for scale-up is promising, or whether the shares are good value at the price … I’m just happy to see that a technology I’ve wondered about for thirty years is coming to market.

What the world needs is a new phrase, something along the lines of “as vindictive as an American”. When one of them takes a stand against retroactive rules, it’s considered news:

I join the Chairman in thanking the Division of Corporation Finance and the other divisions and offices that have contributed to the proposal under consideration today.

As required by Sec. 926 of the Dodd-Frank Act, we are proposing rules that would disqualify securities offerings involving certain “felons and other ‘bad actors’” from reliance on the safe harbor from Securities Act registration provided by Rule 506 of Regulation D.

Unfortunately, however, I am not able to support this proposing release, because the proposed rules would apply retroactively by disqualifying transaction participants from engaging in Rule 506 offerings for conduct occurring prior to enactment of the Dodd-Frank Act.

I want to emphasize at the outset that I do not disagree, as a policy matter, with disqualifying so-called “bad actors” from Rule 506 offerings.

Where, as here, the statute and jurisprudence do not, in my view, support retroactive application of these rules, it would be more appropriate to apply our rules prospectively, and/or seek from Congress a technical amendment to the statute to clarify that these provisions should be applied retroactively if that was indeed Congressional intent.

Rule 506 of Regulation D is, basically, the accredited investor exemption.

Yellow Fever continued to plague the market.

YLO Issues, 2011-5-27
Ticker Quote
5/26
Quote
5/27
Bid YTW
5/27
YTW
Scenario
5/27
Performance
5/27
(bid/bid)
YLO.PR.A 22.75-85 23.10-20 10.02% Soft Maturity
2012-12-30
+1.54%
YLO.PR.B 17.06-10 16.40-82 13.81% Soft Maturity
2017-06-29
-3.87%
YLO.PR.C 18.20-60 17.67-33 9.56% Limit Maturity -2.91%
YLO.PR.D 18.99-09 18.32-40 9.39% Limit Maturity -3.53%

All that aside, the Canadian preferred share market had a reasonably good day overall, with PerpetualDiscounts gaining 18bp, FixedResets up 4bp and DeemedRetractibles off 1bp. Volatility was muted. Good volume was dominated by CM issues.

HIMIPref™ Preferred Indices
These values reflect the December 2008 revision of the HIMIPref™ Indices

Values are provisional and are finalized monthly
Index Mean
Current
Yield
(at bid)
Median
YTW
Median
Average
Trading
Value
Median
Mod Dur
(YTW)
Issues Day’s Perf. Index Value
Ratchet 0.00 % 0.00 % 0 0.00 0 0.0466 % 2,463.7
FixedFloater 0.00 % 0.00 % 0 0.00 0 0.0466 % 3,705.4
Floater 2.45 % 2.25 % 43,834 21.63 4 0.0466 % 2,660.2
OpRet 4.87 % 3.50 % 64,156 0.98 9 0.1203 % 2,421.4
SplitShare 5.22 % -2.17 % 60,519 0.55 6 -0.1144 % 2,511.3
Interest-Bearing 0.00 % 0.00 % 0 0.00 0 0.1203 % 2,214.2
Perpetual-Premium 5.72 % 4.81 % 142,542 0.82 9 0.0505 % 2,073.1
Perpetual-Discount 5.47 % 5.55 % 132,712 14.49 15 0.1816 % 2,174.0
FixedReset 5.15 % 3.19 % 196,387 2.85 57 0.0369 % 2,309.9
Deemed-Retractible 5.12 % 4.87 % 330,095 7.98 53 -0.0130 % 2,150.5
Performance Highlights
Issue Index Change Notes
BNS.PR.O Deemed-Retractible -1.03 % YTW SCENARIO
Maturity Type : Call
Maturity Date : 2017-05-26
Maturity Price : 25.00
Evaluated at bid price : 26.02
Bid-YTW : 4.93 %
PWF.PR.E Perpetual-Discount 1.01 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2041-05-27
Maturity Price : 23.65
Evaluated at bid price : 25.00
Bid-YTW : 5.49 %
BAM.PR.R FixedReset 1.17 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2041-05-27
Maturity Price : 23.42
Evaluated at bid price : 25.91
Bid-YTW : 4.60 %
Volume Highlights
Issue Index Shares
Traded
Notes
CM.PR.E Deemed-Retractible 217,480 Seeking NVCC status.
YTW SCENARIO
Maturity Type : Call
Maturity Date : 2012-11-30
Maturity Price : 25.00
Evaluated at bid price : 25.40
Bid-YTW : 4.80 %
CM.PR.H Deemed-Retractible 135,283 Called for redemption.
YTW SCENARIO
Maturity Type : Call
Maturity Date : 2011-06-26
Maturity Price : 25.75
Evaluated at bid price : 25.90
Bid-YTW : 1.76 %
CM.PR.D Deemed-Retractible 124,704 Seeking NVCC status.
YTW SCENARIO
Maturity Type : Call
Maturity Date : 2011-06-26
Maturity Price : 25.25
Evaluated at bid price : 25.40
Bid-YTW : 3.59 %
CM.PR.I Deemed-Retractible 61,012 RBC crossed 11,000 at 25.15; Desjardins crossed 10,000 at 25.12.
YTW SCENARIO
Maturity Type : Call
Maturity Date : 2016-03-01
Maturity Price : 25.00
Evaluated at bid price : 25.11
Bid-YTW : 4.70 %
HSE.PR.A FixedReset 55,485 Desjardins crossed 25,000 at 25.60.
YTW SCENARIO
Maturity Type : Call
Maturity Date : 2021-04-30
Maturity Price : 25.00
Evaluated at bid price : 25.55
Bid-YTW : 4.13 %
RY.PR.W Deemed-Retractible 53,935 YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2022-01-31
Maturity Price : 25.00
Evaluated at bid price : 24.81
Bid-YTW : 5.03 %
There were 37 other index-included issues trading in excess of 10,000 shares.
Wide Spread Highlights
Issue Index Quote Data and Yield Notes
FTS.PR.H FixedReset Quote: 25.28 – 25.75
Spot Rate : 0.4700
Average : 0.2833

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2041-05-27
Maturity Price : 25.23
Evaluated at bid price : 25.28
Bid-YTW : 3.85 %

RY.PR.G Deemed-Retractible Quote: 24.43 – 24.79
Spot Rate : 0.3600
Average : 0.2520

YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2022-01-31
Maturity Price : 25.00
Evaluated at bid price : 24.43
Bid-YTW : 4.80 %

POW.PR.D Perpetual-Discount Quote: 23.83 – 24.19
Spot Rate : 0.3600
Average : 0.2749

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2041-05-27
Maturity Price : 23.56
Evaluated at bid price : 23.83
Bid-YTW : 5.30 %

GWO.PR.F Deemed-Retractible Quote: 25.60 – 25.96
Spot Rate : 0.3600
Average : 0.2789

YTW SCENARIO
Maturity Type : Call
Maturity Date : 2011-10-30
Maturity Price : 25.25
Evaluated at bid price : 25.60
Bid-YTW : 4.73 %

SLF.PR.C Deemed-Retractible Quote: 22.35 – 22.58
Spot Rate : 0.2300
Average : 0.1605

YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2022-01-31
Maturity Price : 25.00
Evaluated at bid price : 22.35
Bid-YTW : 5.77 %

BNS.PR.O Deemed-Retractible Quote: 26.02 – 26.20
Spot Rate : 0.1800
Average : 0.1161

YTW SCENARIO
Maturity Type : Call
Maturity Date : 2017-05-26
Maturity Price : 25.00
Evaluated at bid price : 26.02
Bid-YTW : 4.93 %

DW.PR.A Upgraded to P-2(high)/BBB+ by S&P

May 27th, 2011

Standard & Poor’s has announced:

•We are raising the ratings on DundeeWealth Inc., including the long-term counterparty credit rating to ‘A’ from ‘BBB-‘, and removing the ratings
from CreditWatch positive where they had been placed following Scotiabank’s Nov. 22, 2010, acquisition announcement.

The upgrade reflects our view the company is “strategically important” to Scotiabank and its wealth management operations and thus benefits from the implied support from being associated with a higher rated entity; we applied three notches of support to the stand-alone rating for being strategically important.

The stable outlook reflects our expectation that DundeeWealth will maintain or improve its position in the Canadian wealth management sector.

This is a rather stunning 4-notch upgrade on the Preferred scale, to P-2(high) from P-3, and from BB to BBB+ on the global scale.

DBRS continues to rate the issue Pfd-3 (Review-Positive).

DW.PR.A was last mentioned on PrefBlog when the acquisition by Scotia was announced. DW.PR.A is tracked by HIMIPref™ but is relegated to the Scraps index on (rather dubious) credit concerns.

May 26, 2011

May 26th, 2011

Yellow got clobbered again!

YLO Issues, 2011-5-26
Ticker Quote
5/25
Quote
5/26
Bid YTW
5/26
YTW
Scenario
5/26
Performance
5/26
(bid/bid)
YLO.PR.A 23.84-95 22.75-85 11.04% Soft Maturity
2012-12-30
-4.57%
YLO.PR.B 17.85-99 17.06-10 12.96% Soft Maturity
2017-06-29
-4.42%
YLO.PR.C 18.88-00 18.20-60 9.27% Limit Maturity -3.60%
YLO.PR.D 19.17-34 18.99-09 9.04% Limit Maturity -0.94%

Apart from that, said Mrs. Lincoln, it was a very nice evening at the theatre! The Canadian preferred share market did quite well today, with PerpetualDiscounts gaining 15bp, FixedResets picking up 1bp and DeemedRetractibles winning 29bp. A good crop of winners is in the Performance Highlights table, led by CM.PR.H, which is being redeemed and followed by others that are not seeking NVCC status. Volume was good, and again CM issues were featured.

HIMIPref™ Preferred Indices
These values reflect the December 2008 revision of the HIMIPref™ Indices

Values are provisional and are finalized monthly
Index Mean
Current
Yield
(at bid)
Median
YTW
Median
Average
Trading
Value
Median
Mod Dur
(YTW)
Issues Day’s Perf. Index Value
Ratchet 0.00 % 0.00 % 0 0.00 0 -0.0815 % 2,462.6
FixedFloater 0.00 % 0.00 % 0 0.00 0 -0.0815 % 3,703.7
Floater 2.45 % 2.24 % 44,485 21.64 4 -0.0815 % 2,658.9
OpRet 4.88 % 3.36 % 63,550 0.42 9 -0.1844 % 2,418.5
SplitShare 5.22 % -2.16 % 60,882 0.55 6 0.0000 % 2,514.2
Interest-Bearing 0.00 % 0.00 % 0 0.00 0 -0.1844 % 2,211.5
Perpetual-Premium 5.72 % 4.96 % 143,584 0.82 9 0.1694 % 2,072.1
Perpetual-Discount 5.48 % 5.56 % 127,396 14.47 15 0.1511 % 2,170.0
FixedReset 5.15 % 3.19 % 195,858 2.86 57 0.0159 % 2,309.0
Deemed-Retractible 5.12 % 4.91 % 328,759 8.08 53 0.2880 % 2,150.8
Performance Highlights
Issue Index Change Notes
ELF.PR.G Deemed-Retractible 1.01 % YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2022-01-31
Maturity Price : 25.00
Evaluated at bid price : 20.91
Bid-YTW : 7.07 %
BNS.PR.L Deemed-Retractible 1.02 % YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2022-01-31
Maturity Price : 25.00
Evaluated at bid price : 24.76
Bid-YTW : 4.68 %
RY.PR.A Deemed-Retractible 1.11 % YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2022-01-31
Maturity Price : 25.00
Evaluated at bid price : 24.61
Bid-YTW : 4.66 %
IGM.PR.B Perpetual-Premium 1.14 % YTW SCENARIO
Maturity Type : Call
Maturity Date : 2019-01-30
Maturity Price : 25.00
Evaluated at bid price : 25.76
Bid-YTW : 5.51 %
POW.PR.D Perpetual-Discount 1.53 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2041-05-26
Maturity Price : 23.58
Evaluated at bid price : 23.85
Bid-YTW : 5.30 %
CM.PR.J Deemed-Retractible 2.00 % YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2022-01-31
Maturity Price : 25.00
Evaluated at bid price : 24.97
Bid-YTW : 4.58 %
CM.PR.I Deemed-Retractible 2.06 % YTW SCENARIO
Maturity Type : Call
Maturity Date : 2016-03-01
Maturity Price : 25.00
Evaluated at bid price : 25.21
Bid-YTW : 4.61 %
CM.PR.H Deemed-Retractible 3.44 % Called for redemption.
YTW SCENARIO
Maturity Type : Call
Maturity Date : 2011-06-25
Maturity Price : 25.75
Evaluated at bid price : 25.86
Bid-YTW : 3.51 %
Volume Highlights
Issue Index Shares
Traded
Notes
MFC.PR.A OpRet 179,405 Desjardins crossed 150,400 at 25.50; then another 20,000 at 25.54.
YTW SCENARIO
Maturity Type : Soft Maturity
Maturity Date : 2015-12-18
Maturity Price : 25.00
Evaluated at bid price : 25.34
Bid-YTW : 3.73 %
CM.PR.H Deemed-Retractible 164,454 Called for redemption.
YTW SCENARIO
Maturity Type : Call
Maturity Date : 2011-06-25
Maturity Price : 25.75
Evaluated at bid price : 25.86
Bid-YTW : 3.51 %
CM.PR.G Deemed-Retractible 103,470 Seeking NVCC status.
YTW SCENARIO
Maturity Type : Call
Maturity Date : 2014-05-31
Maturity Price : 25.00
Evaluated at bid price : 25.23
Bid-YTW : 5.24 %
RY.PR.W Deemed-Retractible 87,953 TD bought 10,000 from anonymous at 24.87.
YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2022-01-31
Maturity Price : 25.00
Evaluated at bid price : 24.87
Bid-YTW : 4.99 %
HSE.PR.A FixedReset 86,924 Desjardins bought blocks of 25,000 and 15,000 from anonymous, both at 25.46; Desjardins crossed 25,000 at 25.57.
YTW SCENARIO
Maturity Type : Call
Maturity Date : 2021-04-30
Maturity Price : 25.00
Evaluated at bid price : 25.57
Bid-YTW : 4.12 %
CM.PR.I Deemed-Retractible 78,282 YTW SCENARIO
Maturity Type : Call
Maturity Date : 2016-03-01
Maturity Price : 25.00
Evaluated at bid price : 25.21
Bid-YTW : 4.61 %
There were 38 other index-included issues trading in excess of 10,000 shares.
Wide Spread Highlights
Issue Index Quote Data and Yield Notes
FTS.PR.G FixedReset Quote: 25.93 – 26.53
Spot Rate : 0.6000
Average : 0.3412

YTW SCENARIO
Maturity Type : Call
Maturity Date : 2013-10-01
Maturity Price : 25.00
Evaluated at bid price : 25.93
Bid-YTW : 3.49 %

IAG.PR.C FixedReset Quote: 26.87 – 27.25
Spot Rate : 0.3800
Average : 0.2706

YTW SCENARIO
Maturity Type : Call
Maturity Date : 2014-01-30
Maturity Price : 25.00
Evaluated at bid price : 26.87
Bid-YTW : 3.06 %

BAM.PR.O OpRet Quote: 26.06 – 26.39
Spot Rate : 0.3300
Average : 0.2266

YTW SCENARIO
Maturity Type : Option Certainty
Maturity Date : 2013-06-30
Maturity Price : 25.00
Evaluated at bid price : 26.06
Bid-YTW : 3.28 %

NA.PR.L Deemed-Retractible Quote: 24.87 – 25.18
Spot Rate : 0.3100
Average : 0.2119

YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2022-01-31
Maturity Price : 25.00
Evaluated at bid price : 24.87
Bid-YTW : 4.96 %

BNS.PR.T FixedReset Quote: 27.40 – 27.66
Spot Rate : 0.2600
Average : 0.1825

YTW SCENARIO
Maturity Type : Call
Maturity Date : 2014-05-25
Maturity Price : 25.00
Evaluated at bid price : 27.40
Bid-YTW : 3.08 %

BAM.PR.P FixedReset Quote: 27.52 – 27.74
Spot Rate : 0.2200
Average : 0.1582

YTW SCENARIO
Maturity Type : Call
Maturity Date : 2014-10-30
Maturity Price : 25.00
Evaluated at bid price : 27.52
Bid-YTW : 4.17 %

CM.PR.D, CM.PR.E, CM.PR.G: Seeking NVCC Status

May 26th, 2011

The Canadian Imperial Bank of Commerce has announced:

that it intends to seek to have its non-cumulative Class A preferred shares, Series 26, 27 and 29 (the Convertible Preferred Shares) treated as non-viability contingent capital (NVCC) for the purposes of determining regulatory capital under Basel III.

The Office of the Superintendent of Financial Institutions (OSFI) has indicated that it is not aware of a factual basis that would question the compliance of the Convertible Preferred Shares with the principles specified in OSFI’s draft advisory on NVCC published in February 2011 (the NVCC Advisory), provided that:

  • (i) CIBC irrevocably renounces its rights to convert the Convertible Preferred Shares into CIBC common shares by way of a deed poll except in circumstances that would be a “Trigger Event” as described in the NVCC Advisory; and
  • (ii) CIBC provides an undertaking to OSFI that CIBC will immediately exercise its rights to convert each of the Convertible Preferred Shares into CIBC common shares upon the occurrence of a Trigger Event.

OSFI has indicated that certain features of the Convertible Preferred Shares will not be acceptable terms and conditions for future instruments to be considered NVCC.

CIBC intends to seek formal confirmation from OSFI regarding the capital treatment of the Convertible Preferred Shares after OSFI finalizes the NVCC Advisory. These actions do not restrict CIBC’s existing redemption rights under the terms of the Convertible Preferred Shares.

By renouncing CIBC’s conversion rights except upon the occurrence of a Trigger Event, the Convertible Preferred Shares will continue to not be dilutive to earnings per share following the adoption of International Financial Reporting Standards (IFRS) commencing November 1, 2012 nor for the portion of the IFRS comparative year ending October 31, 2011 that is subsequent to the renunciation date.

“NVCC Status”, as defined in the OSFI draft advisory, was discussed on PrefBlog in the post OSFI Releases Contingent Capital Draft Advisory. This change, if enacted, will mean these issues will no longer be considered DeemedRetractibles and require a re-think of the issues considered to be members of this group.

This plan is made possible by prospectus language that states, in the case of CM.PR.D:

The Series 26 Shares will not be convertible at the option of CIBC prior to April 30, 2008. On or after this date, CIBC may, subject to the approval, if required, of the stock exchanges upon which any shares of CIBC are listed, convert all, or from time to time any part, of the outstanding Series 26 Shares to be converted into that number of freely-tradeable Common Shares determined (per Series 26 Share) by dividing the then applicable redemption price per Series 26 Share, together with declared and unpaid dividends to the date fixed for conversion, by the greater of $2.00 and 95% of the weighted average trading price of the Common Shares on the TSX for the 20 trading days ending on: (i) the fourth day prior to the date specified for conversion, or (ii) if such fourth day is not a trading day, the last trading day prior to such fourth day. Fractional Common Shares will not be issued on any conversion of Series 26 Shares but in lieu thereof CIBC will make cash payments.

Update, 2011-12-17: Other issues with similar prospectus provisions entitling them to make a similar application are ELF.PR.G, ELF.PR.F, RY.PR.W, TD.PR.M and TD.PR.N.

CM.PR.H Called For Redemption

May 26th, 2011

The Canadian Imperial Bank of Commerce has announced:

its intention to redeem all of its issued and outstanding Non-cumulative Class A Preferred Shares Series 30 for cash. The redemptions will occur on July 31, 2011. The redemption price is $25.75 per Series 30 share.

The $0.30 per share quarterly dividend announced on May 26, 2011 will be the final dividend on the Series 30 shares and will be paid on July 28, 2011 to shareholders of record on June 28, 2011, as previously announced.

Holders of the Series 30 shares should contact the financial institution, broker or other intermediary through which they hold the shares to confirm how they will receive their redemption proceeds.

Update, 2011-7-22: Removed from TXPR.