The CIU Inc. Fixed-Resets, 6.70%+481 announced last week had a superb opening day, trading 182,555 shares in a range of 25.25-85 before closing with a quote of 25.61-85, 5×15.
Its vital statistics may be summed up as:
Maturity Type : Call
Maturity Date : 2014-07-01
Maturity Price : 25.00
Evaluated at bid price : 25.61
Bid-YTW : 6.20 %
An encouraging sign! I can imagine the brokers are now beating the bushes desperately, looking for more potential issuers with a decent credit rating and the ability to offer cumulative dividends!
One interesting thing about this issue is that it still looks cheap against CIU.PR.A, which closed today at 17.55-90, 15×10, to yield a beggarly 6.64% at the bid, supported by the quite extraordinary premium the market is placing on cumulativity of dividends. This implies that the market is evaluating the value of reset feature at only 44bp … not too much!