More good news for fixed-income investors …:
The Bank of Canada says deep discounting by retailers is spreading disinflation – a byproduct of more consumers crossing the border to shop and the arrival here of U.S. chains such as Target Corp.
The central bank left its key overnight interest unchanged at 1 per cent Wednesday, citing a heightened risk of even lower inflation. The bank blamed excess supply in the economy and heightened competition in the retail sector, which it said are proving to be “more persistent than anticipated.”
Canada isn’t yet facing deflation – outright falling prices. But inflation is now running disquietingly below the Bank of Canada’s 2-per-cent target, and outside its acceptable range of 1 to 3 per cent. Consumer prices rose at a meagre annual rate of just 0.7 per cent in October, and economists expect inflation to remain similarly dormant in the months ahead.
The good news didn’t impress the Canadian preferred share market, with PerpetualDiscounts down 25bp, FixedResets off 17bp and DeemedRetractibles losing 34bp. The performance highlights table is comprised entirely of losers. Volume was very high.
PerpetualDiscounts now yield 5.62%, equivalent to 7.31% interest at the standard equivalency factor of 1.3x. Long corporates now yield about 4.8%, so the pre-tax, interest-equivalent spread (in this context, the “Seniority Spread”) is now about 250bp, a minor (and perhaps spurious) widening from the 245bp reported November 27.
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 | -0.5287 % | 2,481.9 |
FixedFloater | 4.27 % | 3.56 % | 38,709 | 18.21 | 1 | 0.9537 % | 3,927.7 |
Floater | 2.99 % | 3.02 % | 64,950 | 19.61 | 3 | -0.5287 % | 2,679.8 |
OpRet | 4.62 % | -3.21 % | 78,154 | 0.08 | 3 | -0.2050 % | 2,659.9 |
SplitShare | 4.88 % | 4.70 % | 71,084 | 4.53 | 5 | 0.1939 % | 3,000.0 |
Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.2050 % | 2,432.3 |
Perpetual-Premium | 5.61 % | 4.94 % | 135,814 | 0.24 | 13 | -0.1705 % | 2,305.4 |
Perpetual-Discount | 5.61 % | 5.62 % | 153,249 | 14.41 | 25 | -0.2486 % | 2,343.4 |
FixedReset | 4.98 % | 3.42 % | 231,704 | 3.31 | 82 | -0.1739 % | 2,481.6 |
Deemed-Retractible | 5.09 % | 4.07 % | 189,207 | 1.41 | 42 | -0.3375 % | 2,417.6 |
FloatingReset | 2.64 % | 2.32 % | 348,513 | 4.43 | 5 | -0.0553 % | 2,464.4 |
Performance Highlights | |||
Issue | Index | Change | Notes |
GWO.PR.N | FixedReset | -1.63 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 21.75 Bid-YTW : 4.68 % |
MFC.PR.B | Deemed-Retractible | -1.46 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 21.60 Bid-YTW : 6.39 % |
TRP.PR.C | FixedReset | -1.39 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2043-12-04 Maturity Price : 21.60 Evaluated at bid price : 22.01 Bid-YTW : 3.89 % |
SLF.PR.G | FixedReset | -1.22 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 22.58 Bid-YTW : 4.44 % |
SLF.PR.B | Deemed-Retractible | -1.20 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 22.25 Bid-YTW : 6.17 % |
POW.PR.B | Perpetual-Discount | -1.20 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2043-12-04 Maturity Price : 23.64 Evaluated at bid price : 23.91 Bid-YTW : 5.67 % |
PWF.PR.F | Perpetual-Discount | -1.13 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2043-12-04 Maturity Price : 23.33 Evaluated at bid price : 23.61 Bid-YTW : 5.62 % |
POW.PR.A | Perpetual-Discount | -1.12 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2043-12-04 Maturity Price : 24.34 Evaluated at bid price : 24.65 Bid-YTW : 5.76 % |
Volume Highlights | |||
Issue | Index | Shares Traded |
Notes |
TRP.PR.B | FixedReset | 113,734 | National sold 17,900 to anonymous at 20.34; Nesbitt crossed 60,000 at 20.35. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2043-12-04 Maturity Price : 20.36 Evaluated at bid price : 20.36 Bid-YTW : 3.82 % |
BAM.PR.N | Perpetual-Discount | 87,156 | Desjardins crossed 58,600 at 19.60. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2043-12-04 Maturity Price : 19.49 Evaluated at bid price : 19.49 Bid-YTW : 6.22 % |
FTS.PR.H | FixedReset | 66,995 | Nesbitt crossed 35,000 at 21.15. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2043-12-04 Maturity Price : 21.11 Evaluated at bid price : 21.11 Bid-YTW : 3.91 % |
RY.PR.I | FixedReset | 60,450 | Nesbitt crossed blocks of 25,000 and 25,100, both at 25.24. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-02-24 Maturity Price : 25.00 Evaluated at bid price : 25.25 Bid-YTW : 1.15 % |
BNS.PR.T | FixedReset | 59,768 | Scotia crossed 25,000 at 25.50. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-04-25 Maturity Price : 25.00 Evaluated at bid price : 25.50 Bid-YTW : 2.50 % |
CU.PR.G | Perpetual-Discount | 57,074 | RBC crossed 23,500 at 20.50. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2043-12-04 Maturity Price : 20.51 Evaluated at bid price : 20.51 Bid-YTW : 5.53 % |
There were 64 other index-included issues trading in excess of 10,000 shares. |
Wide Spread Highlights | ||
Issue | Index | Quote Data and Yield Notes |
BNA.PR.E | SplitShare | Quote: 25.15 – 25.47 Spot Rate : 0.3200 Average : 0.2218 YTW SCENARIO |
BAM.PR.K | Floater | Quote: 17.53 – 17.83 Spot Rate : 0.3000 Average : 0.2073 YTW SCENARIO |
RY.PR.C | Deemed-Retractible | Quote: 25.52 – 25.72 Spot Rate : 0.2000 Average : 0.1199 YTW SCENARIO |
PWF.PR.O | Perpetual-Premium | Quote: 25.36 – 25.66 Spot Rate : 0.3000 Average : 0.2223 YTW SCENARIO |
POW.PR.A | Perpetual-Discount | Quote: 24.65 – 24.85 Spot Rate : 0.2000 Average : 0.1256 YTW SCENARIO |
RY.PR.W | Perpetual-Premium | Quote: 24.88 – 25.08 Spot Rate : 0.2000 Average : 0.1270 YTW SCENARIO |
NA.PR.O & NA.PR.P To Be Redeemed
December 4th, 2013The National Bank of Canada has announced:
NA.PR.O was last mentioned on PrefBlog when it was removed from TXPR following a substantial issuer bid. It was a FixedReset, 6.60%+463, announced 2009-1-5.
NA.PR.P was also a subject of the issuer bid. It was a FixedReset, 6.60%+479, announced 2009-1-22.
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