November 8, 2019

Here’s some cheery news to start your weekend:

Consumer insolvencies jumped nearly 20 per cent in September from a year ago, according to federal data released Friday, suggesting financial strain is rising at the household level.

In total, there were close to 12,000 consumer insolvencies filed across the country in September, compared with about 10,000 a year earlier, the Office of the Superintendent of Bankruptcy said. Insolvencies are comprised of both bankruptcies and proposals – the latter being an offer to pay back a percentage of money owed, extend the payment timeline, or both.

Over the 12-month period ending in September, there were more than 133,000 consumer insolvencies filed, or 8.5 per cent greater than the previous 12-month period.

insolvencytrend_191108
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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 0.3957 % 1,995.9
FixedFloater 0.00 % 0.00 % 0 0.00 0 0.3957 % 3,662.5
Floater 6.05 % 6.19 % 45,200 13.57 4 0.3957 % 2,110.7
OpRet 0.00 % 0.00 % 0 0.00 0 -0.2245 % 3,389.8
SplitShare 4.65 % 4.64 % 51,476 3.88 7 -0.2245 % 4,048.2
Interest-Bearing 0.00 % 0.00 % 0 0.00 0 -0.2245 % 3,158.5
Perpetual-Premium 5.56 % -20.43 % 53,422 0.09 10 -0.0392 % 3,033.4
Perpetual-Discount 5.32 % 5.44 % 69,862 14.73 25 0.1406 % 3,244.6
FixedReset Disc 5.58 % 5.77 % 175,402 14.25 66 -0.0753 % 2,106.2
Deemed-Retractible 5.17 % 5.65 % 62,913 7.80 27 0.0156 % 3,191.6
FloatingReset 6.11 % 6.64 % 93,171 12.96 2 0.1097 % 2,502.9
FixedReset Prem 5.11 % 3.70 % 123,013 1.63 20 0.0039 % 2,623.0
FixedReset Bank Non 1.96 % 3.90 % 86,249 2.16 3 0.1379 % 2,699.4
FixedReset Ins Non 5.40 % 8.34 % 113,515 7.80 22 0.1284 % 2,145.8
Performance Highlights
Issue Index Change Notes
BAM.PR.X FixedReset Disc -1.82 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2049-11-08
Maturity Price : 13.50
Evaluated at bid price : 13.50
Bid-YTW : 6.12 %
IAF.PR.G FixedReset Ins Non -1.65 % YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2030-01-31
Maturity Price : 25.00
Evaluated at bid price : 19.03
Bid-YTW : 7.73 %
BAM.PR.Z FixedReset Disc -1.03 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2049-11-08
Maturity Price : 19.15
Evaluated at bid price : 19.15
Bid-YTW : 6.04 %
TD.PF.I FixedReset Disc 1.01 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2049-11-08
Maturity Price : 21.02
Evaluated at bid price : 21.02
Bid-YTW : 5.46 %
SLF.PR.G FixedReset Ins Non 1.02 % YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2030-01-31
Maturity Price : 25.00
Evaluated at bid price : 13.81
Bid-YTW : 10.13 %
IFC.PR.F Deemed-Retractible 1.06 % YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2030-01-31
Maturity Price : 25.00
Evaluated at bid price : 24.69
Bid-YTW : 5.57 %
SLF.PR.H FixedReset Ins Non 1.22 % YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2030-01-31
Maturity Price : 25.00
Evaluated at bid price : 16.55
Bid-YTW : 8.66 %
CM.PR.S FixedReset Disc 1.39 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2049-11-08
Maturity Price : 18.30
Evaluated at bid price : 18.30
Bid-YTW : 5.66 %
MFC.PR.L FixedReset Ins Non 1.44 % YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2030-01-31
Maturity Price : 25.00
Evaluated at bid price : 16.90
Bid-YTW : 8.73 %
Volume Highlights
Issue Index Shares
Traded
Notes
BAM.PR.K Floater 47,130 YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2049-11-08
Maturity Price : 11.32
Evaluated at bid price : 11.32
Bid-YTW : 6.19 %
TRP.PR.K FixedReset Prem 40,733 YTW SCENARIO
Maturity Type : Call
Maturity Date : 2022-05-31
Maturity Price : 25.00
Evaluated at bid price : 25.60
Bid-YTW : 4.31 %
BAM.PR.X FixedReset Disc 30,051 YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2049-11-08
Maturity Price : 13.50
Evaluated at bid price : 13.50
Bid-YTW : 6.12 %
MFC.PR.G FixedReset Ins Non 29,860 YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2030-01-31
Maturity Price : 25.00
Evaluated at bid price : 18.95
Bid-YTW : 7.93 %
TRP.PR.B FixedReset Disc 28,658 YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2049-11-08
Maturity Price : 11.29
Evaluated at bid price : 11.29
Bid-YTW : 6.33 %
MFC.PR.L FixedReset Ins Non 27,402 YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2030-01-31
Maturity Price : 25.00
Evaluated at bid price : 16.90
Bid-YTW : 8.73 %
There were 31 other index-included issues trading in excess of 10,000 shares.
Wide Spread Highlights
Issue Index Quote Data and Yield Notes
HSE.PR.G FixedReset Disc Quote: 18.00 – 19.08
Spot Rate : 1.0800
Average : 0.6874

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2049-11-08
Maturity Price : 18.00
Evaluated at bid price : 18.00
Bid-YTW : 7.15 %

POW.PR.A Perpetual-Premium Quote: 25.30 – 25.65
Spot Rate : 0.3500
Average : 0.2209

YTW SCENARIO
Maturity Type : Call
Maturity Date : 2019-12-08
Maturity Price : 25.00
Evaluated at bid price : 25.30
Bid-YTW : -4.43 %

BIP.PR.E FixedReset Disc Quote: 22.87 – 23.40
Spot Rate : 0.5300
Average : 0.4031

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2049-11-08
Maturity Price : 22.32
Evaluated at bid price : 22.87
Bid-YTW : 5.51 %

NA.PR.G FixedReset Disc Quote: 19.51 – 19.90
Spot Rate : 0.3900
Average : 0.2839

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2049-11-08
Maturity Price : 19.51
Evaluated at bid price : 19.51
Bid-YTW : 5.77 %

IFC.PR.E Deemed-Retractible Quote: 24.40 – 24.75
Spot Rate : 0.3500
Average : 0.2491

YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2030-01-31
Maturity Price : 25.00
Evaluated at bid price : 24.40
Bid-YTW : 5.62 %

TD.PF.L FixedReset Disc Quote: 23.76 – 24.00
Spot Rate : 0.2400
Average : 0.1417

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2049-11-08
Maturity Price : 22.70
Evaluated at bid price : 23.76
Bid-YTW : 5.16 %

7 Responses to “November 8, 2019”

  1. skeptical says:

    Regarding bankruptcies…If people have trouble paying their creditors with record low rates, just imagine what would happen when interest rates do rise.

    I wonder how many of these are from AB and SK where over extended consumers have to deal with the commodity bust entering its fifth year.

  2. jiHymas says:

    If people have trouble paying their creditors with record low rates, just imagine what would happen when interest rates do rise.

    Yes, that will make the Bank of Canada very cautious when it commences tightening again.

  3. malcolmm says:

    The most frequent ads I hear on my local Vancouver radio station are ads for insolvency trustees and for “own your home – borrow money from us” companies. Canadians are far too comfortable with high debt loads.

  4. mbarbon says:

    A lot of young folk I know want to buy now to “lock in these low rates”.
    No concern for where rates will be in 5 years !!!

  5. jiHymas says:

    One thing I would like to see is some historical data on just who it is who goes bankrupt.

    University costs are much higher than they were when I was a student, which has attracted some attention over the years; students graduate with a lot more debt than I did. I’ve met at least one millennial who declared personal bankruptcy rather than repay all that money while living in Toronto on not much more than the minimum wage.

    How much of the increase comes from this source, rather than from the people we’re talking about here, who have good – or at least reasonable – jobs and have overspent on houses and consumer goods? I’ll argue that bankruptcies by 30-year-olds have less economic impact than the 50-year-olds, because the numbers for the former are smaller and the latter will have to sell their house at whatever they can get.

  6. dodoi says:

    Yes, that will make the Bank of Canada very cautious when it commences tightening again.

    “It’s not the Bank of Canada’s job to fix bad decisions consumers make with regard to debt loads in the current low rate environment, Stephen Poloz says.“. (first paragraph in https://www.cbc.ca/news/business/stephen-poloz-says-bank-of-canada-not-responsible-for-record-debt-1.3268738 )

    I would love to see it and someone to remind it to him.

  7. skeptical says:

    Ha Ha Ha. Bank of Canada’s number 1 job, despite their protestations or claims otherwise, is to keep the health of Canadian financial system intact.

    If a handful of consumers default, well, they should have been more careful. But if 2 to 3% of people begin to default, it would suddenly become Mr. Poloz’s problem. And he’ll come around to save all the banks without thinking of any consequences.

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