The intermediators are being disintermediated!
When PPR SA, the French owner of Gucci, sold a stake in its African distributor CFAO in August, it didn’t use an investment bank to handle the transaction.
Instead, the company turned to an in-house mergers and acquisitions team led by Charles de Fleurieu, 39, a former France Telecom SA M&A executive. “When we can, we do it on our own,” said group managing director Jean-Francois Palus, 51.
…
Almost a third of completed European and U.S. M&A transactions this year were done in-house, according to data provided by Freeman Consulting, a New York-based research firm. For the U.S., that represents the largest adviser-free proportion of deals since 2003; for Europe, it’s the most since 2004.
…
Big global investment banks have seen their revenue from advisory work fall 48 percent, to $6.48 billion, in the first nine months of 2012, compared with the same period in 2007, according to data compiled by Bloomberg.Distrust may be a factor as companies grow increasingly skeptical about banks, said John Longworth, director general of the British Chambers of Commerce, which in an October report found that half of U.K. companies are leery of doing business with financial institutions.
…Siemens, Germany’s most acquisitive company during the past decade, used its own M&A staff for an agreement in July 2011 to acquire NEM and Nem Energy Services, Dutch makers of gas and steam power-plant parts, for 170 million euros ($218 million).Banks might have earned almost 3 million euros in fees to advise Siemens on the deal, estimates Freeman based on transactions roughly that size. They may have missed out on as much as $55.5 million when BP, Europe’s second-largest oil company, used its 30-member in-house advisory team to sell Gulf of Mexico oil and gas properties to Plains Exploration & Production for $5.55 billion, announced in September.
DBRS confirmed BRN.PR.A at Pfd-2(low) – an issue which is not followed by HIMIPref™:
DBRS has today confirmed the rating of Pfd-2 (low) with a Stable trend for the Senior Preferred Shares of Brookfield Investments Corporation (Brookfield Investments or the Company).
…
As a result of higher market values and the aforementioned new investments, the Company’s exposure to real estate investments decreased to 69.6% (on a market value basis as at September 30, 2012) from 83.5% in Q1 2011. Specifically, Brookfield Office Properties Inc. represents 41% of the Company’s investment portfolio on a market value basis.
…
The rating also continues to be supported by the fact that: (1) Brookfield Investments’ senior debt does not exceed 10% of the market value of its portfolio, and (2) no dividends are paid to Brookfield Investments common shareholders, unless, after giving effect to such dividend, the asset coverage for the Brookfield Investments Senior Preferred Shares would be at least three times. Excess cash flows beyond the Senior Preferred Shares are available to Brookfield Investments as sole holder of the Junior Preferred Shares and as sole common shareholder. The Junior Preferred Shares rank subordinate to the Senior Preferred Shares with respect to the payment of dividends.The rating also reflects the following challenges: (a) The principal amount of the Senior Preferred Shares may be repaid by liquidating the assets upon retraction by the holder. Since 29.9% of investments are in shares that are not publicly listed, the illiquidity of such investments could have negative implications for the value realized by the preferred shareholders. (b) As there are no restrictions on the contents of the underlying portfolio, volatile market conditions could cause significant reductions in the net asset value of the Portfolio Shares (especially common shares).
DBRS confirmed TRP and TCA at Pfd-2(low):
DBRS has today confirmed the ratings of TransCanada PipeLines Limited (TCPL or the Company) as listed below. DBRS has also confirmed the rating of the Preferred Shares of TransCanada Corporation (TCC) at Pfd-2 (low). The rating of TCC, which owns 100% of TCPL and holds no other material assets, is based on the credit strength of TCPL.
…
The ratings and trends reflect the following DBRS expectations: (1) The decision with respect to the Company’s Canadian Mainline 2012 Tolls Application and Restructuring Proposal (the Restructuring Proposal) that is currently before the National Energy Board (NEB) will be such that the Company is allowed to continue to recover, and earn a reasonable rate of return on, all of the costs that were incurred in the construction of the Canadian Mainline. A decision is currently expected in late Q1 2013. (2) The Keystone XL Pipeline, approval of which has been repeatedly delayed, is approved by the United States Department of State in 2013 and construction is allowed to proceed, with an expected in-service date in late 2014 or early 2015. A decision is currently expected in Q1 2013. Should a negative decision result, DBRS expects TCC to mitigate the result with incremental projects of similar quality to support its overall business risk profile. (3) Despite an expected moderate weakening in 2013, TCPL maintains reasonably strong credit metrics in line with its targeted cash flow-to-debt ratio of at least 15% and cash flow-to-interest of at least three times (15.8% and 3.6 times on a DBRS-adjusted basis at September 30, 2012). DBRS expects increased diversification and reduced proportional exposure to the currently challenging natural gas pipeline segment, with major capital projects placed in service by 2015 as expected.
It was another day of gains for the Canadian preferred share market, with PerpetualPremiums and DeemedRetractibles both up 6bp, with FixedResets winning 15bp. Volatility was minimal, with two IAG issues bouncing back after going ex-dividend yesterday. Volume was 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 | 0.3479 % | 2,466.8 |
| FixedFloater | 4.19 % | 3.53 % | 28,637 | 18.25 | 1 | -0.2636 % | 3,844.9 |
| Floater | 2.80 % | 3.01 % | 57,770 | 19.65 | 4 | 0.3479 % | 2,663.4 |
| OpRet | 4.60 % | 1.24 % | 36,352 | 0.59 | 4 | -0.0095 % | 2,593.8 |
| SplitShare | 5.43 % | 4.78 % | 59,804 | 4.46 | 3 | 0.3579 % | 2,863.0 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.0095 % | 2,371.8 |
| Perpetual-Premium | 5.26 % | 2.19 % | 73,024 | 0.87 | 30 | 0.0556 % | 2,316.7 |
| Perpetual-Discount | 4.85 % | 4.89 % | 97,292 | 15.59 | 3 | 0.0953 % | 2,625.6 |
| FixedReset | 4.98 % | 3.00 % | 199,225 | 4.19 | 75 | 0.1514 % | 2,451.1 |
| Deemed-Retractible | 4.90 % | 3.07 % | 125,346 | 0.50 | 46 | 0.0642 % | 2,405.9 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| IAG.PR.A | Deemed-Retractible | 1.39 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.85 Bid-YTW : 4.64 % |
| IAG.PR.C | FixedReset | 1.56 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2013-12-31 Maturity Price : 25.00 Evaluated at bid price : 26.00 Bid-YTW : 1.94 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| GWO.PR.R | Deemed-Retractible | 107,505 | Scotia crossed 100,000 at 25.10. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 25.13 Bid-YTW : 4.83 % |
| SLF.PR.C | Deemed-Retractible | 103,675 | Desjardins crossed 100,000 at 24.35. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.31 Bid-YTW : 4.94 % |
| NA.PR.Q | FixedReset | 58,580 | Recent new issue. YTW SCENARIO Maturity Type : Call Maturity Date : 2017-11-15 Maturity Price : 25.00 Evaluated at bid price : 25.65 Bid-YTW : 3.28 % |
| CU.PR.C | FixedReset | 51,540 | National crossed 40,000 at 26.02. YTW SCENARIO Maturity Type : Call Maturity Date : 2017-06-01 Maturity Price : 25.00 Evaluated at bid price : 26.02 Bid-YTW : 3.02 % |
| FTS.PR.J | Perpetual-Premium | 48,045 | Recent new issue. YTW SCENARIO Maturity Type : Call Maturity Date : 2021-12-01 Maturity Price : 25.00 Evaluated at bid price : 25.25 Bid-YTW : 4.65 % |
| TD.PR.S | FixedReset | 47,010 | RBC bought 10,000 from Scotia at 24.90; National bought 16,700 from Nesbitt at 24.94. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.94 Bid-YTW : 3.12 % |
| There were 24 other index-included issues trading in excess of 10,000 shares. | |||
| Wide Spread Highlights | ||
| Issue | Index | Quote Data and Yield Notes |
| ELF.PR.G | Perpetual-Discount | Quote: 24.46 – 24.74 Spot Rate : 0.2800 Average : 0.1915 YTW SCENARIO |
| HSB.PR.D | Deemed-Retractible | Quote: 26.11 – 26.49 Spot Rate : 0.3800 Average : 0.2983 YTW SCENARIO |
| PWF.PR.H | Perpetual-Premium | Quote: 25.38 – 25.60 Spot Rate : 0.2200 Average : 0.1391 YTW SCENARIO |
| BAM.PR.M | Perpetual-Discount | Quote: 24.50 – 24.72 Spot Rate : 0.2200 Average : 0.1502 YTW SCENARIO |
| BNA.PR.D | SplitShare | Quote: 26.40 – 26.64 Spot Rate : 0.2400 Average : 0.1880 YTW SCENARIO |
| ELF.PR.H | Perpetual-Premium | Quote: 25.61 – 25.90 Spot Rate : 0.2900 Average : 0.2382 YTW SCENARIO |