Somewhat to my surprise, the E-L Financial new issue was able to show some strength on its opening day, closing at 25.15-22 on volume of 135,325 shares.
| Curve Price Analysis of ELF.PR.G | ||
| Component | Taxable Curve | Non-taxable Curve |
| Base-Rate | 23.87 | 23.71 |
| Short-Term | 0.10 | 0.92 |
| Long-Term | 0.54 | 0.02 |
| Credit Spread (2) | -0.52 | -0.68 |
| Credit Spread (Low) | -0.52 | -0.68 |
| Error | 0.06 | 0.08 |
| Intrinsic Price | 23.53 | 23.37 |
| Liquidity | 1.51 | 1.50 |
| Total Curve Price | 25.04 | 24.87 |
This one looks fully priced – and that’s fully priced at best, because there’s a big chunk of liquidity value in the analysis. I suspect that as liquidity goes away, the market value of the shares will decrease, as the market comes to realize that a Pfd-2(low) [DBRS] issue should not be trading a mere 7bp yield higher than, for example, POW.PR.D.
This issue has been added to the HIMIPref™ database with a security code of A43087, replacing the Pre-Issue code of P25002. It has also been added to the PerpetualPremium Index.
[…] PrefBlog Canadian Preferred Shares – Data and Discussion « ELF.PR.G Holds its Own! […]
[…] Recent new issue that continues to amaze me with a closing quotation of $25.60-65, pre-tax bid-YTW of 4.53% based on a call 2015-11-16 at $25.00. DBRS rates this as Pfd-2(low), so you sure aren’t getting much yield increment for the credit spread! […]