The latest news in Big Brother Regulation is LIBOR reform:
The Treasury said in London today that it will enshrine in law the way Libor is set, create a criminal offense for those who misreport it and give regulators the power to oversee the setting of the rate and other financial-industry benchmarks.
…
The FSA will encourage more banks to submit quotes as part of the revamp, Wheatley, an FSA managing director, said last month, and could force uncooperative banks to submit quotes with its new powers.
Sounds great, eh? Criminalize mistakes – and, presumably, make the survival of the bank dependent upon every single employee being completely pure at all times – and then, because only a lunatic would get involved in business on such terms, make it mandatory. Oh, it will take a lot of well paid regulators to enforce this one!
The government is egged on by eggheads:
First, by forcing banks to commit to their quotes—actually trade at them when given the opportunity—banks need only make an honest market determination. They only need their army of lawyers when, for some reason on a given day, they decide they want to make a trade outside of the range they’ve quoted. This is a parsimonious method for ensuring accurate and reliable quotes.
Clearly, the authors have never actually traded anything. Quotes for bonds, to take just one example, can change dramatically in the course of a single telephone call. If such a rule is put in place, spreads will be as wide as allowed by law.
DBRS confirmed BPO Properties (proud issuer of BPP.PR.G, BPP.PR.J and BPP.PR.M):
DBRS has today confirmed the Issuer Rating of Brookfield Canada Office Properties (BCOP) at BBB with a Stable trend and has also confirmed the Issuer Rating and Cumulative Redeemable Preferred Shares rating of BPO Properties Ltd. (BPO Properties) at BBB and Pfd-3, respectively, with Stable trends.
The confirmations follow the change in Brookfield Office Properties Inc.’s (BOP) trends to Negative from Stable. Although BCOP and BPO Properties benefit from their close association with BOP, particularly from property and asset management agreements, the ratings are not directly linked at this level. DBRS believes that the current ratings of BCOP and BPO Properties continue to reflect the solid operating performance of the Canadian office portfolio and steady financial credit metrics. That said, DBRS would become concerned if BOP’s credit risk profile continued to deteriorate beyond the ratings of BCOP and BPO Properties.
It was a mixed day for the Canadian preferred share market, with PerpetualPremiums up 5bp, FixedResets down 5bp and DeemedRetractibles flat. Volatility was very low. Volume was average.
| 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 | -0.0378 % | 2,460.2 |
| FixedFloater | 4.24 % | 3.56 % | 33,174 | 18.24 | 1 | 0.0892 % | 3,799.1 |
| Floater | 2.98 % | 3.01 % | 66,592 | 19.71 | 3 | -0.0378 % | 2,656.4 |
| OpRet | 4.62 % | 3.11 % | 61,484 | 0.66 | 4 | -0.0095 % | 2,568.8 |
| SplitShare | 5.39 % | 4.78 % | 71,820 | 4.50 | 3 | 0.2364 % | 2,847.0 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.0095 % | 2,348.9 |
| Perpetual-Premium | 5.29 % | 1.95 % | 85,620 | 0.35 | 27 | 0.0468 % | 2,304.0 |
| Perpetual-Discount | 5.01 % | 4.90 % | 45,793 | 15.47 | 4 | 0.0410 % | 2,581.9 |
| FixedReset | 4.97 % | 3.00 % | 184,863 | 3.83 | 73 | -0.0519 % | 2,440.8 |
| Deemed-Retractible | 4.94 % | 3.58 % | 129,196 | 1.16 | 47 | -0.0033 % | 2,380.6 |
| 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 : 26.96 Bid-YTW : -1.76 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| FTS.PR.H | FixedReset | 425,994 | Added to TXPR. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2042-10-18 Maturity Price : 23.61 Evaluated at bid price : 25.50 Bid-YTW : 2.77 % |
| RY.PR.D | Deemed-Retractible | 126,215 | Deleted from TXPR. YTW SCENARIO Maturity Type : Call Maturity Date : 2016-02-24 Maturity Price : 25.00 Evaluated at bid price : 25.81 Bid-YTW : 3.70 % |
| RY.PR.G | Deemed-Retractible | 106,641 | Deleted from TXPR. YTW SCENARIO Maturity Type : Call Maturity Date : 2016-05-24 Maturity Price : 25.00 Evaluated at bid price : 25.84 Bid-YTW : 3.71 % |
| GWO.PR.G | Deemed-Retractible | 103,750 | Deleted from TXPR. YTW SCENARIO Maturity Type : Call Maturity Date : 2013-12-31 Maturity Price : 25.00 Evaluated at bid price : 25.30 Bid-YTW : 4.42 % |
| FTS.PR.E | OpRet | 85,600 | National crossed 75,000 at 27.00. YTW SCENARIO Maturity Type : Call Maturity Date : 2013-06-01 Maturity Price : 25.75 Evaluated at bid price : 26.96 Bid-YTW : -1.76 % |
| BNS.PR.O | Deemed-Retractible | 76,500 | Deleted from TXPR. YTW SCENARIO Maturity Type : Call Maturity Date : 2013-04-26 Maturity Price : 26.00 Evaluated at bid price : 26.70 Bid-YTW : -0.20 % |
| There were 29 other index-included issues trading in excess of 10,000 shares. | |||
| Wide Spread Highlights | ||
| Issue | Index | Quote Data and Yield Notes |
| MFC.PR.A | OpRet | Quote: 25.72 – 26.00 Spot Rate : 0.2800 Average : 0.1707 YTW SCENARIO |
| RY.PR.A | Deemed-Retractible | Quote: 25.90 – 26.13 Spot Rate : 0.2300 Average : 0.1494 YTW SCENARIO |
| GWO.PR.J | FixedReset | Quote: 25.91 – 26.15 Spot Rate : 0.2400 Average : 0.1613 YTW SCENARIO |
| IAG.PR.E | Deemed-Retractible | Quote: 26.77 – 26.94 Spot Rate : 0.1700 Average : 0.1034 YTW SCENARIO |
| MFC.PR.I | FixedReset | Quote: 25.51 – 25.73 Spot Rate : 0.2200 Average : 0.1640 YTW SCENARIO |
| SLF.PR.C | Deemed-Retractible | Quote: 23.45 – 23.61 Spot Rate : 0.1600 Average : 0.1043 YTW SCENARIO |