I have been advised of a new issue by the recently renamed BAM Split Corp. A press release is available via CCN Matthews.
This is a bought issue, with closing scheduled for January 10, 2007. Issue size is $200-million, very nice for a split-share corporation.
Dividends are cumulative and quarterly, 4.35% p.a. on the par value of $25.00.
The embeddedOptions are:
| BAM Split 4.35% Ret. Options | |||
| Redemption | 2007-1-10 | 2016-1-9 | $26.00 |
| Redemption | 2016-1-10 | 2017-1-9 | $25.75 |
| Redemption | 2017-1-10 | 2018-1-9 | $25.50 |
| Redemption | 2018-1-10 | 2019-1-9 | $25.25 |
| Maturity | 2019-1-10 | 2019-1-10 | $25.00 |
The first record date is projected to be February 22, 2007, for the first (short) dividend of $0.1460 payable March 7, 2007.
The material I have isn’t entirely clear, but it appears that the bought deal is conditional upon DBRS assigning a rating of Pfd-2 to the issue and reconfirming the Pfd-2 ratings outstanding on BNA.PR.A and BNA.PR.B
Update & Bump: The issue has been added to the HIMIPref™ database with a preIssue securityCode of P50009.
An analysis of curvePrice has been prepared, with some comparatives:
| Curve Price Components using taxable Curve | |||
| Component | BNA.PR.? | PIC.PR.A | LBS.PR.A |
| Price due to base-rate | 24.02 | 15.80 | 10.53 |
| Price due to short-term | 0.04 | 0.12 | 0.03 |
| Price due to long-term | 0.81 | 0.38 | 0.34 |
| Price to to Cumulative Dividends | 0.00 | 0.00 | 0.00 |
| Price due to SplitShareCorp | -0.96 | -0.22 | -0.25 |
| Price due to Retractibility | 1.72 | 0.40 | 0.47 |
| Price due to Credit Spread (2) | -0.28 | -0.06 | -0.08 |
| Price due to error | 0.06 | -0.00 | -0.00 |
| Price due to Credit Spread (High) | 0.00 | 0.00 | 0.00 |
| Price due to Credit Spread (Low) | 0.00 | 0.00 | 0.00 |
| Intrinsic Price | 25.41 | 16.43 | 11.03 |
| Price due to Liquidity | ? | 0.03 | 0.23 |
| Curve Price | ? | 16.46 | 11.26 |
| Quotation, 12/20 | 25.00 Issue | 16.06-15 | 10.82-89 |
| Yield-To-Worst (taxable) | 3.45% | 3.20% | 3.20% |
| Modified Duration To Worst (taxable) | 9.79 | 3.50 | 5.97 |
| Yield-To-Worst (non-taxable) | 4.34% | 4.01% | 4.03% |
| Modified Duration To Worst (non-taxable) | 9.38 | 3.45 | 5.81 |
The portfolio evaluation of the experimental SplitShare Index is here.
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