Research : Preferred Pairs

Preferred shares are often issued with terms that are virtually identical with another issue from the same issuer; in some other cases, the terms of two series may be different, but the series may be convertible into each other at specified times. Investors should look for this kind of pairing, because the market sometimes does not price these issues as similarly as one might expect.

Look for the research link!

Regular readers will know that I am currently enraged by the persistent difference in price between BAM.PR.M and BAM.PR.N!

Update, 2015-5-12: Note that I have also provided a link to the calculator.

12 Responses to “Research : Preferred Pairs”

  1. […] PrefBlog Canadian Preferred Shares – Data and Discussion « Research : Preferred Pairs […]

  2. […] National Bank crossed 20,000 at 21.00, then another 5,000 at the same price … didn’t I already say that? No, I’ve checked it twice, and the only difference between these trades and the RY.PR.E ones above is a minute or two on the time stamp. Well, why, not? They’re a weak pair. Now with a pre-tax bid-YTW of 5.41% based on a bid of 20.99 and a limitMaturity. […]

  3. […] These two issues constitute a “weak pair”, as defined in my article about Preferred Pairs. They’re “ratchet rate” floaters, currently paying 100% of prime on their par value of $25.00 – which comes to $1.3125 at today’s prime of 5.25%. In other words, an interest rate of over 11% on investment … although, mind you, you can only call it 11% if you actually get paid the money. DBRS rates the Nortel Preferreds at Pfd-5(low), which is their lowest ranking short of default, and Nortel’s senior unsecured debt at B(low), which isn’t exactly investment grade either. […]

  4. […] Too many cooks spoil the broth! We are now in the fairly unusual situation in which one member of a Preferred Pair is in the PerpetualDiscount index, and the other is a PerpetualPremium! […]

  5. […] “Weak Pair” with TCA.PR.X, below. Now with a pre-tax bid-YTW of 5.78% based on a bid of 48.20 and a limitMaturity. […]

  6. […] February edition will contain an appendix discussing the concept of Strong Pairs, their strange and unjustifiable treatment by the marketplace and how investors may exploit the […]

  7. […] issue forms a Strong Pair with BAM.PR.G; an analytical framework for Strong Pairs was discussed in the February PrefLetter. […]

  8. […] forms a Strong Pair with BCE.PR.H. BCE has announced previously that the date for providing notice of conversion is […]

  9. […] May edition will contain an appendix dealing with Strong Pairs and the historical efficiency of the market as the date for interconversion between elements of the […]

  10. […] The May edition contains an appendix discussing historical interconversions of Strong Pairs. […]

  11. […] These issues constitute a Strong Pair. […]

  12. […] the FloatingReset part of the TD.PR.S / TD.PR.T Strong Pair, commenced trading today and closed at a very impressive 25.47-55, 33×2, after trading 9,400 […]

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