In an encouraging sign, an increasing amount of loans from banks are being converted into term junk debt:
High-yield, high-risk bond sales almost tripled to $2.38 billion this week, the most in seven months, as borrowers took advantage of a rally in corporate debt to increase cash reserves and pay down credit lines.
…
Borrowers concerned that a weakening economy and deteriorating earnings may shut off their access to the debt markets are taking advantage of the lowest yields since October relative to Treasuries to issue debt. Companies see an opportunity to raise cash and repay credit lines, said Pete Brady, managing director of high-yield bond trading at Broadpoint Capital Inc.
…
Junk-rated companies paid as little as 15.98 percentage points more than Treasuries on debt this week, down from a peak of 21.82 percentage points on Dec. 15, and the lowest since Oct. 30, according to Merrill’s U.S. High Yield Master II index. Overall yields narrowed two basis points to 18.03 percentage points from 18.05 on Feb. 6.
| HIMIPref™ Preferred Indices These values reflect the December 2008 revision of the HIMIPref™ Indices Values are provisional and are finalized monthly |
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| Index | Mean Current Yield (at bid) |
Median YTW |
Median Average Trading Value |
Median Mod Dur (YTW) |
Issues | Day’s Perf. | Index Value |
| Ratchet | 5.28 % | 3.73 % | 23,521 | 17.90 | 2 | -0.1019 % | 859.9 |
| FixedFloater | 7.25 % | 6.80 % | 70,221 | 14.14 | 7 | 0.5525 % | 1,384.3 |
| Floater | 5.17 % | 4.24 % | 29,095 | 16.92 | 4 | 0.5945 % | 1,015.7 |
| OpRet | 5.23 % | 4.70 % | 138,962 | 3.99 | 15 | 0.0000 % | 2,054.3 |
| SplitShare | 6.28 % | 9.46 % | 67,136 | 4.05 | 15 | -0.6916 % | 1,776.0 |
| Interest-Bearing | 7.02 % | 8.71 % | 33,024 | 0.84 | 2 | 1.0423 % | 2,015.1 |
| Perpetual-Premium | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.0687 % | 1,562.5 |
| Perpetual-Discount | 6.89 % | 7.01 % | 195,634 | 12.53 | 71 | -0.0687 % | 1,439.1 |
| FixedReset | 6.05 % | 5.70 % | 621,623 | 13.99 | 27 | 0.3989 % | 1,820.6 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| LFE.PR.A | SplitShare | -3.11 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2012-12-01 Maturity Price : 10.00 Evaluated at bid price : 8.72 Bid-YTW : 9.46 % |
| LBS.PR.A | SplitShare | -3.05 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2013-11-29 Maturity Price : 10.00 Evaluated at bid price : 7.95 Bid-YTW : 11.07 % |
| FBS.PR.B | SplitShare | -2.96 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2011-12-15 Maturity Price : 10.00 Evaluated at bid price : 7.20 Bid-YTW : 18.33 % |
| ELF.PR.F | Perpetual-Discount | -2.01 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2039-02-13 Maturity Price : 15.10 Evaluated at bid price : 15.10 Bid-YTW : 8.94 % |
| SBN.PR.A | SplitShare | -1.93 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2014-12-01 Maturity Price : 10.00 Evaluated at bid price : 9.15 Bid-YTW : 7.10 % |
| POW.PR.C | Perpetual-Discount | -1.66 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2039-02-13 Maturity Price : 20.16 Evaluated at bid price : 20.16 Bid-YTW : 7.31 % |
| POW.PR.A | Perpetual-Discount | -1.43 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2039-02-13 Maturity Price : 20.05 Evaluated at bid price : 20.05 Bid-YTW : 7.09 % |
| SLF.PR.E | Perpetual-Discount | -1.29 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2039-02-13 Maturity Price : 15.25 Evaluated at bid price : 15.25 Bid-YTW : 7.52 % |
| SLF.PR.C | Perpetual-Discount | -1.23 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2039-02-13 Maturity Price : 15.30 Evaluated at bid price : 15.30 Bid-YTW : 7.41 % |
| MFC.PR.C | Perpetual-Discount | -1.20 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2039-02-13 Maturity Price : 16.50 Evaluated at bid price : 16.50 Bid-YTW : 6.96 % |
| WFS.PR.A | SplitShare | -1.18 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2011-06-30 Maturity Price : 10.00 Evaluated at bid price : 8.35 Bid-YTW : 14.09 % |
| MFC.PR.B | Perpetual-Discount | -1.14 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2039-02-13 Maturity Price : 17.30 Evaluated at bid price : 17.30 Bid-YTW : 6.86 % |
| DF.PR.A | SplitShare | -1.08 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2014-12-01 Maturity Price : 10.00 Evaluated at bid price : 9.17 Bid-YTW : 7.11 % |
| PWF.PR.F | Perpetual-Discount | -1.05 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2039-02-13 Maturity Price : 18.81 Evaluated at bid price : 18.81 Bid-YTW : 7.06 % |
| BNS.PR.P | FixedReset | 1.04 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2039-02-13 Maturity Price : 22.32 Evaluated at bid price : 22.40 Bid-YTW : 4.73 % |
| TRI.PR.B | Floater | 1.19 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2039-02-13 Maturity Price : 12.75 Evaluated at bid price : 12.75 Bid-YTW : 4.16 % |
| RY.PR.I | FixedReset | 1.29 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2039-02-13 Maturity Price : 22.66 Evaluated at bid price : 22.70 Bid-YTW : 4.59 % |
| NA.PR.P | FixedReset | 1.59 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2014-03-17 Maturity Price : 25.00 Evaluated at bid price : 25.60 Bid-YTW : 6.15 % |
| RY.PR.L | FixedReset | 1.91 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2039-02-13 Maturity Price : 23.91 Evaluated at bid price : 23.95 Bid-YTW : 5.10 % |
| BNA.PR.C | SplitShare | 2.06 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2019-01-10 Maturity Price : 25.00 Evaluated at bid price : 12.41 Bid-YTW : 14.21 % |
| BNA.PR.B | SplitShare | 2.08 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2016-03-25 Maturity Price : 25.00 Evaluated at bid price : 21.55 Bid-YTW : 7.73 % |
| BCE.PR.Z | FixedFloater | 2.75 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2039-02-13 Maturity Price : 25.00 Evaluated at bid price : 15.68 Bid-YTW : 6.80 % |
| FIG.PR.A | Interest-Bearing | 2.97 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2014-12-31 Maturity Price : 10.00 Evaluated at bid price : 7.62 Bid-YTW : 12.34 % |
| BAM.PR.B | Floater | 3.15 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2039-02-13 Maturity Price : 7.85 Evaluated at bid price : 7.85 Bid-YTW : 6.80 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| DF.PR.A | SplitShare | 98,000 | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2014-12-01 Maturity Price : 10.00 Evaluated at bid price : 9.17 Bid-YTW : 7.11 % |
| BNS.PR.X | FixedReset | 67,295 | YTW SCENARIO Maturity Type : Call Maturity Date : 2014-05-25 Maturity Price : 25.00 Evaluated at bid price : 25.25 Bid-YTW : 6.13 % |
| RY.PR.R | FixedReset | 66,557 | YTW SCENARIO Maturity Type : Call Maturity Date : 2014-03-26 Maturity Price : 25.00 Evaluated at bid price : 25.31 Bid-YTW : 6.07 % |
| MFC.PR.B | Perpetual-Discount | 56,972 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2039-02-13 Maturity Price : 17.30 Evaluated at bid price : 17.30 Bid-YTW : 6.86 % |
| WFS.PR.A | SplitShare | 56,000 | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2011-06-30 Maturity Price : 10.00 Evaluated at bid price : 8.35 Bid-YTW : 14.09 % |
| CM.PR.R | OpRet | 51,000 | YTW SCENARIO Maturity Type : Call Maturity Date : 2009-05-30 Maturity Price : 25.60 Evaluated at bid price : 25.77 Bid-YTW : 3.34 % |
| There were 24 other index-included issues trading in excess of 10,000 shares. | |||