The Great Regulatory Job Creation Scheme is gathering steam:
U.S. regulators are set to choose the first non-bank companies likely to be branded potential risks to the financial system, according to two people with knowledge of the plans.
The Financial Stability Oversight Council intends to request confidential data from as many as five U.S. firms at a meeting this month, said the people, who declined to be identified because the plans aren’t public. The request is a step toward deciding whether the companies should be subject to Federal Reserve supervision, including stress tests, higher capital levels and tougher liquidity requirements.
So the Fed will have to hire more regulators to administer the expanded mandate and then more regulators to replace the old regulators who have been hired by the affected companies at fat salaries. It’s win-win!
Wow! The US Mortgage almost-agencies have a radical new business model!
Edward J. DeMarco, the overseer of taxpayer-supported Fannie Mae (FNMA) and Freddie Mac, said the firms need to increase the fees they charge to guarantee mortgages in states where it’s costlier for them to deal with bad debt.
Can you imagine? Charging for services based on expected costs? I think Mr. DeMarco should get the Nobel Prize in Economics.
It was another day of little movement for the Canadian preferred share market, with PerpetualPremiums down 3bp, FixedResets gaining 4bp and DeemedRetractibles off 2bp. Volatility was minimal. Volume was average – which is a huge improvement from recent levels, probably helped along by the BAM.PF.B new issue.
PerpetualDiscounts (all three of them!) now yield 4.92%, equivalent to 6.40% interest at the standard equivalency factor of 1.3x. Update Long Corporates now yield about 4.4%, so the pre-tax interest-equivalent spread (in this context, the “Seniority Spread”) is now about 200bp, sharply tighter than the 215bp reported September 5.
| 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 | 0.1992 % | 2,411.4 |
| FixedFloater | 4.52 % | 3.87 % | 35,092 | 17.52 | 1 | 0.0000 % | 3,522.5 |
| Floater | 3.04 % | 3.05 % | 56,384 | 19.61 | 3 | 0.1992 % | 2,603.6 |
| OpRet | 4.68 % | 3.35 % | 62,268 | 1.49 | 4 | -0.2771 % | 2,541.3 |
| SplitShare | 5.48 % | 4.98 % | 72,650 | 4.60 | 3 | 0.0400 % | 2,800.7 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.2771 % | 2,323.8 |
| Perpetual-Premium | 5.29 % | 3.10 % | 85,844 | 0.34 | 28 | -0.0340 % | 2,278.7 |
| Perpetual-Discount | 4.95 % | 4.92 % | 95,267 | 15.65 | 3 | 0.0879 % | 2,549.1 |
| FixedReset | 4.99 % | 3.07 % | 175,756 | 4.07 | 71 | 0.0411 % | 2,422.9 |
| Deemed-Retractible | 4.95 % | 3.54 % | 120,696 | 1.85 | 46 | -0.0152 % | 2,365.3 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| FTS.PR.E | OpRet | -1.05 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2013-06-01 Maturity Price : 25.75 Evaluated at bid price : 26.36 Bid-YTW : 1.66 % |
| HSB.PR.D | Deemed-Retractible | 1.22 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2012-12-31 Maturity Price : 25.50 Evaluated at bid price : 25.63 Bid-YTW : 2.42 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| BAM.PF.B | FixedReset | 332,922 | New issue settled today. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2042-09-12 Maturity Price : 23.08 Evaluated at bid price : 24.96 Bid-YTW : 3.95 % |
| BNS.PR.Y | FixedReset | 158,162 | Nesbitt crossed 136,600 at 25.20. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 25.19 Bid-YTW : 2.78 % |
| MFC.PR.B | Deemed-Retractible | 74,298 | Nesbitt crossed 50,000 at 23.90. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 23.82 Bid-YTW : 5.31 % |
| HSB.PR.D | Deemed-Retractible | 66,701 | RBC crossed 59,700 at 25.65. YTW SCENARIO Maturity Type : Call Maturity Date : 2012-12-31 Maturity Price : 25.50 Evaluated at bid price : 25.63 Bid-YTW : 2.42 % |
| GWO.PR.J | FixedReset | 60,719 | RBC crossed 59,700 at 26.12. YTW SCENARIO Maturity Type : Call Maturity Date : 2013-12-31 Maturity Price : 25.00 Evaluated at bid price : 26.10 Bid-YTW : 2.34 % |
| BNS.PR.K | Deemed-Retractible | 51,853 | RBC crossed 50,000 at 25.70. YTW SCENARIO Maturity Type : Call Maturity Date : 2013-04-28 Maturity Price : 25.25 Evaluated at bid price : 25.67 Bid-YTW : 3.01 % |
| There were 34 other index-included issues trading in excess of 10,000 shares. | |||
| Wide Spread Highlights | ||
| Issue | Index | Quote Data and Yield Notes |
| FTS.PR.E | OpRet | Quote: 26.36 – 26.80 Spot Rate : 0.4400 Average : 0.3055 YTW SCENARIO |
| PWF.PR.O | Perpetual-Premium | Quote: 26.52 – 26.84 Spot Rate : 0.3200 Average : 0.1912 YTW SCENARIO |
| GWO.PR.M | Deemed-Retractible | Quote: 26.26 – 26.60 Spot Rate : 0.3400 Average : 0.2216 YTW SCENARIO |
| PWF.PR.K | Perpetual-Premium | Quote: 25.25 – 25.62 Spot Rate : 0.3700 Average : 0.2587 YTW SCENARIO |
| MFC.PR.D | FixedReset | Quote: 26.41 – 26.63 Spot Rate : 0.2200 Average : 0.1324 YTW SCENARIO |
| SLF.PR.E | Deemed-Retractible | Quote: 23.26 – 23.45 Spot Rate : 0.1900 Average : 0.1137 YTW SCENARIO |
[…] spread (in this context, the “Seniority Spread”) is now about 200bp, unchanged from the September 12 […]