Assiduous Reader prefhound points out that I didn’t reproduce his chart when appending his comment to the January 4 post. Well, it’s reproduced now!
A grizzled and cynical old lawyer once told me that the first thing you learn in law school is that a contract is holy. The first thing you learn as a practicing lawyer is that a contract is where you start. And, it appears, Citigroup is as duplicious as any of them:
Last June, Citi was supposed to pay five former senior executives millions in severance payouts, but what the bank decided to do, instead, was not make those payment. The ex-employees were owed about $100 million (half of which had been paid out) but not wanting to be compared to AIG which, at the time, was in the midst of receiving death threats over bonuses, Citi chose to inform the group that it shouldn’t count on the remainder of the cash.
Deferred compensation at banks will give a massive competitive advantage to hedge funds and shadow banks.
Another zippetty-doo-dah-day for Canadian Preferreds, with PerpetualDiscounts up 33bp and FixedResets up 1bp. Volume was good.
| 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 | 1.3607 % | 1,707.1 |
| FixedFloater | 5.64 % | 3.79 % | 37,030 | 19.03 | 1 | 2.8252 % | 2,763.6 |
| Floater | 2.30 % | 2.65 % | 110,566 | 20.65 | 3 | 1.3607 % | 2,132.6 |
| OpRet | 4.82 % | -10.81 % | 113,548 | 0.09 | 13 | 0.1970 % | 2,332.2 |
| SplitShare | 6.38 % | -7.13 % | 174,480 | 0.08 | 2 | 0.1542 % | 2,106.5 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.1970 % | 2,132.6 |
| Perpetual-Premium | 5.76 % | 5.56 % | 147,097 | 2.28 | 12 | 0.2737 % | 1,904.4 |
| Perpetual-Discount | 5.75 % | 5.78 % | 184,027 | 14.24 | 63 | 0.3341 % | 1,827.0 |
| FixedReset | 5.40 % | 3.53 % | 321,830 | 3.87 | 41 | 0.0133 % | 2,182.2 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| CIU.PR.B | FixedReset | -1.96 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2014-07-01 Maturity Price : 25.00 Evaluated at bid price : 28.07 Bid-YTW : 3.92 % |
| PWF.PR.L | Perpetual-Discount | -1.09 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2040-01-07 Maturity Price : 21.44 Evaluated at bid price : 21.76 Bid-YTW : 5.86 % |
| BAM.PR.K | Floater | 1.03 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2040-01-07 Maturity Price : 14.75 Evaluated at bid price : 14.75 Bid-YTW : 2.68 % |
| POW.PR.D | Perpetual-Discount | 1.17 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2040-01-07 Maturity Price : 21.60 Evaluated at bid price : 21.60 Bid-YTW : 5.82 % |
| MFC.PR.C | Perpetual-Discount | 1.19 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2040-01-07 Maturity Price : 19.53 Evaluated at bid price : 19.53 Bid-YTW : 5.82 % |
| RY.PR.C | Perpetual-Discount | 1.20 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2040-01-07 Maturity Price : 21.07 Evaluated at bid price : 21.07 Bid-YTW : 5.54 % |
| W.PR.J | Perpetual-Discount | 1.23 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2040-01-07 Maturity Price : 23.68 Evaluated at bid price : 23.95 Bid-YTW : 5.87 % |
| BMO.PR.M | FixedReset | 1.24 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2013-09-24 Maturity Price : 25.00 Evaluated at bid price : 26.91 Bid-YTW : 2.95 % |
| MFC.PR.A | OpRet | 1.55 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2010-07-19 Maturity Price : 26.25 Evaluated at bid price : 26.87 Bid-YTW : -0.17 % |
| BAM.PR.G | FixedFloater | 2.83 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2040-01-07 Maturity Price : 25.00 Evaluated at bid price : 19.29 Bid-YTW : 3.79 % |
| BAM.PR.B | Floater | 2.97 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2040-01-07 Maturity Price : 14.90 Evaluated at bid price : 14.90 Bid-YTW : 2.65 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| TD.PR.S | FixedReset | 116,476 | Nesbitt crossed 100,000 at 26.05. YTW SCENARIO Maturity Type : Call Maturity Date : 2013-08-30 Maturity Price : 25.00 Evaluated at bid price : 26.00 Bid-YTW : 3.69 % |
| IGM.PR.B | Perpetual-Discount | 102,415 | Nesbitt crossed 42,400 at 24.57, then another 30,000 at 24.58. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2040-01-07 Maturity Price : 24.40 Evaluated at bid price : 24.61 Bid-YTW : 6.06 % |
| CM.PR.A | OpRet | 99,557 | Nesbitt crossed 92,100 at 26.60. There was also a sizeable cross yesterday. If these trades are being generated by my recent post on this issue, I want a commission! YTW SCENARIO Maturity Type : Call Maturity Date : 2010-02-06 Maturity Price : 25.25 Evaluated at bid price : 26.51 Bid-YTW : -50.66 % |
| TRP.PR.A | FixedReset | 84,118 | Nesbitt crossed 65,000 at 25.83. YTW SCENARIO Maturity Type : Call Maturity Date : 2015-01-30 Maturity Price : 25.00 Evaluated at bid price : 25.83 Bid-YTW : 3.91 % |
| RY.PR.P | FixedReset | 57,009 | TD crossed 34,600 at 28.00. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-03-26 Maturity Price : 25.00 Evaluated at bid price : 28.00 Bid-YTW : 3.42 % |
| BMO.PR.J | Perpetual-Discount | 38,600 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2040-01-07 Maturity Price : 21.01 Evaluated at bid price : 21.01 Bid-YTW : 5.43 % |
| There were 35 other index-included issues trading in excess of 10,000 shares. | |||
[…] employee, trust that is all too often unjustified as exemplified by the Citigroup case discussed January 7 and, here in Canada, by the case of David Berry. The major effect of bonus deferral, I believe, […]