Royal Bank New Issue: 4.5% Perp

Royal Bank has announced a new issue of 4.5% Perpetuals – I am advised that the redemption schedule commences 2012-2-24 at $26.00, but have not yet confirmed this.

This would not appear, at first blush, to be a particularly attractive issue considering the most obvious comparables. Reasonable, but not particularly attractive:

Recent RY Perpetuals
Issue Dividend Rate Quote 11/30
RY.PR.A 4.45% 24.98-00
RY.PR.B 4.70% 25.90-22
RY.PR.C 4.60% 25.35-37

More later.

Later, more:

Royal Bank Perpetuals
Analysis Using AFTER-TAX Curve (except as noted)
Curve price Component RY.PR.A RY.PR.B RY.PR.C RY.PR.W RY.PR.?
Price due to base-rate 23.12 23.91 23.69 24.44 23.29
Price due to short-term 0.04 0.05 0.05 0.04 0.05
Price due to long-term 0.56 0.59 0.57 0.61 0.54
Price to to Cumulative Dividends 0.00 0.00 0.00 0.00 0.00
Price due to Liquidity 1.46 1.50 1.49 0.66 1.49?
Price due to error -0.03 -0.03 -0.03 -0.02 -0.00
CurvePrice 25.16 26.01 25.77 25.74 25.36
Annual Dividend 1.1125 1.1750 1.1500 1.2250 1.1250
2006-12-01 Quote 25.00-08 25.90-09 25.40-50 26.45-52 Issue: $25.00
After-tax Bid YTW 3.55% 3.37% 3.54% 3.19% 3.58%
Pre-Tax Bid YTW 4.47% 4.24% 4.46% 4.01% 4.50%

 

Tax has been included in the calculation of the elements of the above table in accordance with the Ontario Highest Marginal Rate.

This issue has been added to the HIMIPref™ database on a preIssue basis with the securityCode P75000.

3 Responses to “Royal Bank New Issue: 4.5% Perp”

  1. […] Now with a pre-tax bid-YTW of 4.50%, based on a limit maturity. In other words, these are trading near-as-dammit to even yield with the Royal new issue, which is expected to settle Dec. 13. […]

  2. […] The best an investor can reasonably hope for is a yield of 4.03% if it lasts until its $25.00 call; there are lots of issues with similar characterists that have such a yield without the risk of negative returns. The new RY.PR.D issue settles tomorrow and yields 4.50%. RY.PR.W has a yield to worst of 4.02%, with a similar call date, without the risk of an intervening call. The same can be said for POW.PR.D, pre-tax bid-YTW of 4.36% based on a call 2014-11-30, with no intervening call risk – and it’s a more active trader and the same name! […]

  3. […] The Royal Bank new issue got off to a solid start today, trading 249,115 shares and closing above the issue price at 25.10-11, 84×10. […]

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