CIT has released a review of its restructuring plan threatening carnage if it does not pass. The PDF of the SEC filing is copy-protected, of course, because it’s SECRET, but they estimate recovery on unsecured claims – such as senior bonds – of between 5.9% and 37.2%. Ouch!
Carl Icahn estimates minimum 80% recovery if the firm is put into run-off; perhaps 100%.
In news guaranteed to amaze and astound, American financial institutions with severely restricted retention plans are having retention problems:
At Bank of America, for instance, only 14 of the 25 highly paid executives remained by the time Feinberg announced his decision. Under his plan, compensation for the most highly paid employees at the bank would be a maximum of $9.9 million. The bank had sought permission to pay as much as $21 million, according to Treasury Department documents.
At American International Group, only 13 people of the top 25 were still on hand for Feinberg’s decision.
Isn’t that incredible? Who would ever have thought that employees had choices, or that there was any point to retention bonuses beyond the fun of doing evil?
The preferred share market had a respite from the steady drip of declines today, with PerpetualDiscounts gaining 6bp and FixedResets up 11bp. Volume was steady.
| 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 | 0.5190 % | 1,470.1 |
| FixedFloater | 6.27 % | 4.37 % | 44,792 | 18.37 | 1 | -1.0268 % | 2,485.7 |
| Floater | 2.65 % | 3.08 % | 107,565 | 19.52 | 3 | 0.5190 % | 1,836.6 |
| OpRet | 4.88 % | -10.45 % | 115,663 | 0.09 | 15 | 0.0897 % | 2,291.0 |
| SplitShare | 6.42 % | 6.49 % | 496,167 | 3.94 | 2 | 0.4003 % | 2,058.9 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.0897 % | 2,094.9 |
| Perpetual-Premium | 5.92 % | 5.95 % | 139,605 | 13.88 | 11 | -0.1176 % | 1,848.9 |
| Perpetual-Discount | 5.98 % | 6.05 % | 216,289 | 13.81 | 63 | 0.0550 % | 1,734.7 |
| FixedReset | 5.53 % | 4.25 % | 459,325 | 4.02 | 41 | 0.1104 % | 2,104.3 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| BAM.PR.M | Perpetual-Discount | -1.34 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2039-10-23 Maturity Price : 17.61 Evaluated at bid price : 17.61 Bid-YTW : 6.83 % |
| BAM.PR.G | FixedFloater | -1.03 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2039-10-23 Maturity Price : 25.00 Evaluated at bid price : 17.35 Bid-YTW : 4.37 % |
| BAM.PR.B | Floater | 1.03 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2039-10-23 Maturity Price : 12.80 Evaluated at bid price : 12.80 Bid-YTW : 3.09 % |
| SLF.PR.F | FixedReset | 1.11 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2014-07-30 Maturity Price : 25.00 Evaluated at bid price : 27.31 Bid-YTW : 4.00 % |
| ELF.PR.G | Perpetual-Discount | 1.16 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2039-10-23 Maturity Price : 17.40 Evaluated at bid price : 17.40 Bid-YTW : 6.89 % |
| BAM.PR.I | OpRet | 1.32 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2009-11-22 Maturity Price : 25.75 Evaluated at bid price : 26.10 Bid-YTW : -6.92 % |
| BAM.PR.K | Floater | 1.58 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2039-10-23 Maturity Price : 12.85 Evaluated at bid price : 12.85 Bid-YTW : 3.08 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| BMO.PR.O | FixedReset | 96,980 | RBC crossed 79,400 at 28.00. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-06-24 Maturity Price : 25.00 Evaluated at bid price : 27.97 Bid-YTW : 4.01 % |
| RY.PR.X | FixedReset | 71,395 | RBC bought 25,000 from Nesbitt at 27.05, then crossed 18,000 at the same price. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-09-23 Maturity Price : 25.00 Evaluated at bid price : 27.19 Bid-YTW : 4.21 % |
| BAM.PR.K | Floater | 66,750 | Nesbitt crossed three blocks, 24,700 shares, 21,600 and 13,800, all at 12.75. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2039-10-23 Maturity Price : 12.85 Evaluated at bid price : 12.85 Bid-YTW : 3.08 % |
| TD.PR.G | FixedReset | 64,055 | RBC bought 10,000 from Scotia at 27.10, then crossed 30,000 at 27.13. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-05-30 Maturity Price : 25.00 Evaluated at bid price : 27.15 Bid-YTW : 4.22 % |
| MFC.PR.B | Perpetual-Discount | 59,608 | Nesbitt crossed 24,600 at 19.35; RBC crossed 13,000 at the same price. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2039-10-23 Maturity Price : 19.30 Evaluated at bid price : 19.30 Bid-YTW : 6.11 % |
| RY.PR.T | FixedReset | 46,065 | National bought 14,600 from Scotia at 27.00, then crossed 16,500 at 27.04. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-09-23 Maturity Price : 25.00 Evaluated at bid price : 26.98 Bid-YTW : 4.38 % |
| There were 39 other index-included issues trading in excess of 10,000 shares. | |||
[…] in trouble. They’ve also responded to Carl Icahn’s overtures (reported on PrefBlog on October 23) in a surprisingly mild-mannered way … but to no avail. Icahn’s stepping up the […]