There’s a real dearth of news and informed commentary today!
The US had a bad jobs number today, but that’s about it.
Otherwise, the only thing I saw today of even passing interest was Springfield, Massachusetts, getting angry at Merrill because some sub-prime linked CDOs that they bought have gone down in price. According to Steven Syre of the Boston Globe:
City officials say Merrill Lynch, an active player in the municipal finance business, sold them securities that cities in Massachusetts aren’t legally allowed to own for reasons of safety and liquidity. What the broker actually disclosed about the nature of those investments at the time of the sale remains murky.
“We take very seriously the financial cost and the breach of public interest,” said Chris Gabrielli, the chairman of Springfield’s Finance Control Board and former gubernatorial candidate. “Our view is that Merrill Lynch has responsibility here and is accountable. We shouldn’t have to settle for less than getting the money back.”
A Merrill spokesman said Springfield officials had sought AAA-rated securities offering higher returns than they had been getting. “These investments met both those criteria, and each was reviewed, approved, and authorized by Springfield officials.”
Who knows? It is possible, I suppose, that Merrill misrepresented the investment. I consider it far more likely that a few snivel-servants with Springfield were just thrilled to pieces about being big-shot hard-nosed investment geniuses, until they got to the “taking responsibility” part. We’ll see!
An excruciatingly slow day on the preferred share market, but performance continued to be good.
| Note that these indices are experimental; the absolute and relative daily values are expected to change in the final version. In this version, index values are based at 1,000.0 on 2006-6-30 | |||||||
| Index | Mean Current Yield (at bid) | Mean YTW | Mean Average Trading Value | Mean Mod Dur (YTW) | Issues | Day’s Perf. | Index Value |
| Ratchet | 5.19% | 5.17% | 66,153 | 15.16 | 2 | -0.0201% | 1,073.5 |
| Fixed-Floater | 4.95% | 5.32% | 76,512 | 15.12 | 9 | -0.0615% | 1,028.5 |
| Floater | 5.29% | 5.32% | 92,573 | 15.06 | 3 | -0.3835% | 832.5 |
| Op. Retract | 4.83% | 3.20% | 80,887 | 3.48 | 15 | +0.1655% | 1,041.2 |
| Split-Share | 5.28% | 5.46% | 102,462 | 4.04 | 15 | +0.1144% | 1,036.6 |
| Interest Bearing | 6.33% | 6.58% | 60,575 | 3.66 | 4 | +0.3129% | 1,064.2 |
| Perpetual-Premium | 5.77% | 5.20% | 67,526 | 5.21 | 12 | -0.1591% | 1,019.3 |
| Perpetual-Discount | 5.47% | 5.50% | 361,163 | 14.67 | 54 | +0.1951% | 934.8 |
| Major Price Changes | |||
| Issue | Index | Change | Notes |
| FBS.PR.B | SplitShare | -2.9029% | Asset coverage of just under 1.7:1 according to TD Securities. Now with a pre-tax bid-YTW of 5.72% based on a bid of 9.70 and a hardMaturity 2011-12-15 at 10.00. |
| BCE.PR.G | FixFloat | -1.3750% | |
| BSD.PR.A | InterestBearing | +1.0929% | Asset coverage of just under 1.7:1 according to Brookfield Funds. Now with a pre-tax bid-YTW of 7.48% (mostly as interest) based on a bid of 9.25 and a hardMaturity 2015-3-31 at 10.00. |
| MFC.PR.C | PerpetualDiscount | +1.1850% | Now with a pre-tax bid-YTW of 5.11% based on a bid of 22.20 and a limitMaturity. |
| BCE.PR.Z | FixFloat | +1.2033% | |
| BNA.PR.B | SplitShare | +1.3787% | Asset coverage of 3.7+:1 as of November 30, according to the company. Now with a pre-tax bid-YTW of 6.96% based on a bid of 22.06 and a hardMaturity 2016-3-25 at 25.00. Compare with BNA.PR.A (6.15% to 2010-9-30) and BNA.PR.C (7.20% to 2019-1-10). |
| IGM.PR.A | OpRet | +1.8437% | Now with a pre-tax bid-YTW of 1.55% based on a bid of 27.62 and a call 2009-7-30 at 26.00. Realized yield will be 3.67% if it survives until its softMaturity 2013-6-29 at 25.00. |
| IAG.PR.A | PerpetualDiscount | +2.2149% | Now with a pre-tax bid-YTW of 5.32% based on a bid of 21.69 and a limitMaturity. |
| ELF.PR.F | PerpetualDiscount | +2.5000% | Now with a pre-tax bid-YTW of 6.25% based on a bid of 21.32 and a limitMaturity. |
| BNA.PR.C | SplitShare | +2.7504% | Asset coverage of 3.7+:1 as of November 30, according to the company. Now with a pre-tax bid-YTW of 7.20% based on a bid of 19.80 and a hardMaturity 2019-1-10 at 25.00. Compare with BNA.PR.A (6.15% to 2010-9-30) and BNA.PR.B (6.96% to 2016-9-30). |
| Volume Highlights | |||
| Issue | Index | Volume | Notes |
| BAM.PR.K | Floater | 19,950 | |
| BAM.PR.N | PerpetualDiscount | 19,500 | Now with a pre-tax bid-YTW of 6.44% based on a bid of 18.59 and a limitMaturity. |
| CM.PR.I | PerpetualDiscount | 13,646 | Now with a pre-tax bid-YTW of 5.64% based on a bid of 20.90 and a limitMaturity. |
| BAM.PR.M | PerpetualDiscount | 13,500 | Now with a pre-tax bid-YTW of 6.42% based on a bid of 18.67 and a limitMaturity. |
| RY.PR.D | PerpetualDiscount | 12,300 | Now with a pre-tax bid-YTW of 5.34% based on a bid of 21.38 and a limitMaturity. |
There were three other index-included $25.00-equivalent issues trading over 10,000 shares today.