Strains in Greek banking are becoming more obvious:
Credit Agricole SA, the foreign bank with the biggest risks in Greece, reached an accord with Greek authorities that will let its unit in the country access emergency funding should the need arise, two people with knowledge of the matter said.
Emporiki Bank, the Greek unit of Credit Agricole, will be able to tap so-called Emergency Liquidity Assistance from Greece’s central bank under certain conditions, the people said, declining to be identified because the matter is private. Access will probably be restricted to situations where deposits are declining, the people said. Greek banks without a foreign parent already use the facility.
…
Jean-Paul Chifflet, Credit Agricole’s chief executive officer, said on May 22 that his bank renewed a request for access to ELA funding with Bank of Greece’s governor. France’s third-largest bank “can’t increase significantly” exposures to Greece, Chifflet told investors last month at the company’s annual general meeting. Emporiki’s loans exceed deposits, requiring Credit Agricole to provide cross-border funding to help fill the gap.Credit Agricole reduced that funding to Athens-based Emporiki to 4.6 billion euros at the end of March from 5.5 billion euros in December, partly as deposits rose, the bank said May 11. Credit Agricole also tapped 1.6 billion euros of ECB funding for Emporiki at the end of March.
The problem in Europe is that highly indebted countries owe money in currency they can’t print, right? It’s a good thing we’re smarter than that in Canada:
- New Brunswick’s tax-supported debt as a percent of consolidated operating
revenues has risen rapidly in the past five years.- We are lowering our issuer credit and senior unsecured debt ratings on
the Province of New Brunswick to ‘A+’ from ‘AA-‘.- The stable outlook reflects our expectation that New Brunswick’s program
review initiative will be successful at achieving cost efficiencies and that the province will achieve fiscal balance in the next two fiscal
years as per its budget plan.…
The ratings on New Brunswick reflect Standard & Poor’s opinion of the
following credit strengths:
- The province’s relatively resilient economic performance since the global economic and financial crisis began in 2008 compared with peers’.
- The province’s sound liquidity support of more than C$700 million in cash and marketable securities available to address potential fiscal pressures. As well, the province has a pool of sinking funds, which
totaled over C$4.0 billion as at the end of fiscal 2012 that can be used for debt repayment if needed.Credit concerns include our view of the following:
- New Brunswick’s very high tax-supported debt burden (net of sinking funds), which rose further in fiscal 2012 to 149% of consolidated operating revenues or about 38% of GDP. We expect its tax-supported debt
burden to peak at 155% of operating revenues in 2014.- Challenges stemming from long-term demographic trends that are likely to
affect health care demand and revenue growth.
Fortunately, 38% of GDP is still a lot smaller than 120% of GDP.
There was a modest upward move in the Canadian preferred share market today, with PerpetualPremiums up 9bp, FixedResets gaining 2bp and DeemedRetractibles winning 10bp. Volatility was minimal. Volume was quite low.
| 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 | -0.2183 % | 2,304.9 |
| FixedFloater | 4.49 % | 3.86 % | 26,187 | 17.54 | 1 | -0.0945 % | 3,508.1 |
| Floater | 3.13 % | 3.17 % | 72,730 | 19.24 | 3 | -0.2183 % | 2,488.6 |
| OpRet | 4.79 % | 2.48 % | 36,066 | 1.02 | 5 | 0.3714 % | 2,507.2 |
| SplitShare | 5.28 % | -4.87 % | 47,517 | 0.52 | 4 | -0.2833 % | 2,710.2 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.3714 % | 2,292.6 |
| Perpetual-Premium | 5.45 % | 3.19 % | 76,004 | 0.63 | 26 | 0.0874 % | 2,229.2 |
| Perpetual-Discount | 5.03 % | 5.05 % | 123,185 | 15.28 | 7 | 0.0177 % | 2,447.9 |
| FixedReset | 5.05 % | 3.23 % | 190,551 | 7.82 | 71 | 0.0202 % | 2,388.6 |
| Deemed-Retractible | 5.03 % | 3.86 % | 146,980 | 2.90 | 45 | 0.0973 % | 2,298.9 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| FTS.PR.E | OpRet | 1.63 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2013-06-01 Maturity Price : 25.75 Evaluated at bid price : 26.74 Bid-YTW : 0.92 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| CM.PR.L | FixedReset | 246,838 | Scotia crossed 75,000 at 26.80; Nesbitt crossed blocks of 109,700 and 60,000 at 26.85. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-04-30 Maturity Price : 25.00 Evaluated at bid price : 26.85 Bid-YTW : 2.85 % |
| BMO.PR.O | FixedReset | 156,081 | Scotia crossed 149,300 at 26.75. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-05-25 Maturity Price : 25.00 Evaluated at bid price : 26.73 Bid-YTW : 2.98 % |
| TD.PR.C | FixedReset | 122,600 | Desjardins crossed 119,800 at 26.05. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-01-31 Maturity Price : 25.00 Evaluated at bid price : 26.01 Bid-YTW : 3.45 % |
| RY.PR.I | FixedReset | 88,450 | Desjardins crossed 70,000 at 25.55. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 25.55 Bid-YTW : 3.29 % |
| TD.PR.K | FixedReset | 61,580 | Nesbitt crossed 60,000 at 26.95. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-07-31 Maturity Price : 25.00 Evaluated at bid price : 26.92 Bid-YTW : 2.88 % |
| BNS.PR.X | FixedReset | 51,978 | RBC crossed 50,000 at 26.70. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-04-25 Maturity Price : 25.00 Evaluated at bid price : 26.66 Bid-YTW : 2.99 % |
| There were 18 other index-included issues trading in excess of 10,000 shares. | |||
| Wide Spread Highlights | ||
| Issue | Index | Quote Data and Yield Notes |
| BAM.PR.C | Floater | Quote: 16.75 – 18.00 Spot Rate : 1.2500 Average : 0.7115 YTW SCENARIO |
| TCA.PR.Y | Perpetual-Premium | Quote: 52.00 – 52.49 Spot Rate : 0.4900 Average : 0.2933 YTW SCENARIO |
| TCA.PR.X | Perpetual-Premium | Quote: 51.90 – 52.44 Spot Rate : 0.5400 Average : 0.4137 YTW SCENARIO |
| NA.PR.O | FixedReset | Quote: 26.90 – 27.25 Spot Rate : 0.3500 Average : 0.2455 YTW SCENARIO |
| BAM.PR.R | FixedReset | Quote: 26.22 – 26.60 Spot Rate : 0.3800 Average : 0.3065 YTW SCENARIO |
| GWO.PR.M | Deemed-Retractible | Quote: 26.24 – 26.47 Spot Rate : 0.2300 Average : 0.1591 YTW SCENARIO |