DBRS has confirmed TCL.PR.D at Pfd-3, Trend Negative:
The confirmation considers the declines in organic revenue and operating income over the past year, while acknowledging improvement in key credit metrics as a result of debt reduction. The trends remain Negative (as of April 20, 2012), based on DBRS’s view that weakening demand, combined with overcapacity, will continue to place pressure on the Company’s revenues, margins and cash flow generation going forward. The ratings continue to be supported by Transcontinental’s leading market position, economies of scale, and healthy free cash flow generation, while also reflecting its deteriorating earnings profile, which is being structurally affected by a consumer shift toward digital forms of media.
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In terms of financial profile, Transcontinental has remained prudent, preserving credit metrics by using much of its free cash flow over the past two years to repay debt. DBRS notes that our concern regarding Transcontinental’s credit risk profile is not based primarily on the Company’s debt level, but rather on its future income and cash-generating prospects. If the Company’s plans and performance lead to signs of stabilization in organic revenue and operating income over the near to medium term, the ratings outlook could stabilize. However, a continued and meaningful decline in organic revenue and operating income and/or in key credit metrics over this period could result in a downgrade.
It was a mixed day for the Canadian preferred share market, with PerpetualPremiums off 7bp, FixedResets down 8bp and DeemedRetractibles gaining 5bp. Volatility was low. Volume was on the high side of average.
| 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 | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.3236 % | 2,590.8 |
| FixedFloater | 4.14 % | 3.46 % | 25,938 | 18.39 | 1 | 1.3687 % | 3,930.6 |
| Floater | 2.57 % | 2.89 % | 73,970 | 19.96 | 5 | 0.3236 % | 2,797.3 |
| OpRet | 4.76 % | 0.29 % | 41,142 | 0.30 | 5 | 0.0537 % | 2,611.4 |
| SplitShare | 4.54 % | 4.21 % | 36,294 | 4.25 | 2 | 0.0395 % | 2,932.0 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.0537 % | 2,387.9 |
| Perpetual-Premium | 5.24 % | -2.33 % | 84,071 | 0.11 | 29 | -0.0658 % | 2,358.0 |
| Perpetual-Discount | 4.85 % | 4.90 % | 135,729 | 15.61 | 4 | -0.0203 % | 2,647.9 |
| FixedReset | 4.90 % | 2.76 % | 267,238 | 3.52 | 78 | -0.0774 % | 2,495.6 |
| Deemed-Retractible | 4.86 % | 2.17 % | 147,647 | 0.27 | 45 | 0.0464 % | 2,439.2 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| GWO.PR.F | Deemed-Retractible | -1.12 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2013-03-16 Maturity Price : 25.00 Evaluated at bid price : 25.71 Bid-YTW : -18.52 % |
| BAM.PR.G | FixedFloater | 1.37 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2043-02-14 Maturity Price : 23.21 Evaluated at bid price : 22.96 Bid-YTW : 3.46 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| PWF.PR.M | FixedReset | 250,600 | RBC crossed 245,400 at 25.87. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-01-31 Maturity Price : 25.00 Evaluated at bid price : 25.83 Bid-YTW : 2.74 % |
| BAM.PR.B | Floater | 79,758 | Desjardins crossed 69,600 at 18.45. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2043-02-14 Maturity Price : 18.27 Evaluated at bid price : 18.27 Bid-YTW : 2.89 % |
| BMO.PR.H | Deemed-Retractible | 62,800 | Called for redemption. YTW SCENARIO Maturity Type : Call Maturity Date : 2013-03-27 Maturity Price : 25.00 Evaluated at bid price : 24.99 Bid-YTW : 4.27 % |
| BMO.PR.O | FixedReset | 49,344 | Desjardins crossed 42,100 at 26.55. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-05-25 Maturity Price : 25.00 Evaluated at bid price : 26.46 Bid-YTW : 1.71 % |
| TD.PR.S | FixedReset | 48,900 | Scotia crossed 30,000 at 25.08; TD crossed 10,000 at 25.09. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 25.07 Bid-YTW : 3.12 % |
| GWO.PR.G | Deemed-Retractible | 46,165 | National bought 35,900 from Nesbitt at 25.37. YTW SCENARIO Maturity Type : Call Maturity Date : 2013-12-31 Maturity Price : 25.00 Evaluated at bid price : 25.37 Bid-YTW : 4.24 % |
| There were 36 other index-included issues trading in excess of 10,000 shares. | |||
| Wide Spread Highlights | ||
| Issue | Index | Quote Data and Yield Notes |
| BAM.PR.C | Floater | Quote: 18.15 – 19.00 Spot Rate : 0.8500 Average : 0.4885 YTW SCENARIO |
| PWF.PR.A | Floater | Quote: 23.41 – 23.85 Spot Rate : 0.4400 Average : 0.3333 YTW SCENARIO |
| BAM.PR.R | FixedReset | Quote: 26.43 – 26.67 Spot Rate : 0.2400 Average : 0.1598 YTW SCENARIO |
| BAM.PR.J | OpRet | Quote: 27.20 – 27.47 Spot Rate : 0.2700 Average : 0.1920 YTW SCENARIO |
| PWF.PR.F | Perpetual-Premium | Quote: 25.40 – 25.64 Spot Rate : 0.2400 Average : 0.1661 YTW SCENARIO |
| FTS.PR.H | FixedReset | Quote: 25.64 – 26.15 Spot Rate : 0.5100 Average : 0.4387 YTW SCENARIO |