PrefBlog

First day of Spring! I was too busy planning the sacred rites that will help my garden grow to pay much attention to the news. Sorry!

The Canadian preferred share market got knocked down today, with PerpetualPremiums down 13bp, FixedResets losing 32bp and DeemedRetractibls off 19bp. The Performance Highlights table was appropriately long and uniformly negative, with BAM and SLF issues conspicuous amongst the losers. Volume leapt upwards, to above average levels.

Greek CDSs are being settled at 21.5%:

Sellers of credit-default swaps on Greece will have to pay as much as $2.5 billion to settle contracts triggered by the nation’s debt restructuring.

The settlement was determined after dealers agreed a final value for Greek bonds of 21.5 percent of face value at an auction, according to administrators Markit Group Ltd. and Creditex Group Inc., and is in line with where the notes have been trading.

Greek credit-default swaps are being settled after investors were forced to exchange their bonds at a loss in the biggest ever debt restructuring. The auction ends more than two years of speculation over whether the derivatives are reliable for insuring sovereign debt after European policy makers sought to prevent payouts on concern they’d worsen the region’s crisis.

OSFI has gone to the unprecedented step of issuing a news release regarding mortgage underwriting guidelines. Naturally, there is no meat at all in the release, but the referenced draft guidelines create the usual paperwork increase.

DBRS has imposed new website conditions:

SITE Lockdown – Public Users must register

So now there will be more moronic spam for me to delete every day. And I just got less inclined to be civil when somebody calls from DBRS. Oh, well.

I wrote a Letter to Toronto City Council regarding the Sheppard Avenue East subway.

It was a quiet day for the Canadian preferred share market, with PerpetualPremiums gaining 1bp, FixedResets flat and DeemedRetractibles losing 19bp. The Performance Highlights table is suitably short; volume was low.

BCE is buying Astral Media:

BCE Inc.’s (BCE-T39.64-0.42-1.05%) massive bet on media is going truly national, as the communications giant makes a $3-billion play for Astral Media Inc. (ACM.A-T48.5512.3033.93%)to shore up its broadcasting business in the one province where it was weak: Quebec.

The deal, announced Friday, gives the country’s largest communications firm a stable of French-language television and radio stations to compete with rival Quebecor Inc. It also cements BCE’s position as the leading force of consolidation in Canada’s media industry: Since 2010, it has announced deals worth nearly $7-billion to buy control of CTV Inc., Maple Leafs Sports and Entertainment Ltd., and now Montreal-based Astral.

DBRS considers it a non-event for credit:

DBRS has today confirmed the long- and short-term ratings of BCE Inc. (BCE) and its wholly-owned operating subsidiary, Bell Canada (the Company), at BBB (high)/R-1 (low) and A (low)/R-1 (low), respectively, following BCE Inc. and Bell Canada’s announcement today that they have entered into a definitive agreement to purchase the shares of Astral Media Inc. (Astral Media) for roughly $3 billion (valuing Astral Media at a total enterprise value of roughly $3.4 billion). The trend on all ratings is Stable.

With an EBITDA multiple of roughly 10 times (x) Astral Media’s F2012 EBITDA, DBRS notes that this transaction is reasonable and consistent with other recent media transactions in Canada. BCE/Bell Canada plans to fund the acquisition of the equity purchase price with cash/debt (for roughly three-quarters) and BCE Inc. common shares (for the remaining quarter, or $750 million). As part of the transaction, Ian Greenberg – one of the co-founders of Astral Media – will join the board of BCE Inc. upon closure of the acquisition.
…
From a financial perspective, DBRS notes that leverage is expected to increase for Bell Canada with the addition of Astral Media, from approximately 1.8x gross debt-to-EBITDA expected at the end of 2011 to roughly 2.0x expected at the end of 2013. However, the Company’s commitment to deleverage within 24 months of the close of the transaction gives DBRS greater comfort that Bell Canada’s leverage will improve to more historical levels (and back within its own target range).

It was another quiet day for the Canadian preferred share market, with PerpetualPremiums down 5bp, FixedResets gaining 7bp and DeemedRetractibles off 5bp. The Performance Highlights table is suitably short. Volume was quite low.

It seems that BAM will spin out some real estate:

Now the company’s largest division by far, its $83-billion collection of real estate, is about to receive the spin-out treatment. And therein lies the potential opportunity for investors. The move to create the new venture, to be known as Brookfield Property Partners, could be a catalyst to move the share price higher.

The company states:

“As long-term, value-oriented real estate investors, we believe this is an excellent time to selectively build a portfolio of high-quality industrial properties, and we look forward to expanding our relationship with Hillwood,” said David Arthur, Managing Partner at Brookfield Asset Management. “This initiative expands the scope of our real estate platform in an exciting asset class, strengthening our global property operations in line with the expected launch later this year of our flagship property vehicle, Brookfield Property Partners.”

It was a poor day for the Canadian preferred share market, with PerpetualPremiums down 13bp, PerpetualDiscounts off 4bp and DeemedRetractibles losing 18bp. The Performance Highlights table is short, but comprised entirely of losers. Volume was pathetically, Christmasally low.

Nice story about technological disruption – a big change from The Diving Bell & the Butterfly:

Edwards, who suffered brain damage in 2001, can write e- mails, though, and she’s revisiting a favorite pastime, sketching, for the first time in a decade, thanks to her iPad and software applications that can cost as little as $7.

That’s a switch from the $15,000 communication device she had tried, a 9-pound machine approved by her insurer that tracks eye movement on a special grid corresponding to the alphabet. That device kept her tied to those in the room around her. The iPad, along with several other consumer-driven apps, has reopened the world to her.

Fitch has indicated a negative outlook on UK debt:

Fitch Ratings said Britain risks losing its top investment grade because of its limited ability to deal with shocks, days before Chancellor of the Exchequer George Osborne will present his annual budget.

Fitch changed the outlook on Britain to “negative” from “stable,” indicating a “slightly greater” than 50 percent chance that the AAA rating will be reduced within two years, the company said in a statement in London late yesterday, citing the weak economic recovery, high debt levels and threats from Europe’s debt crisis. Osborne will meet coalition partners later this week to agree on a budget he will present on March 21.

It was a quiet day for the Canadian preferred share market, with PerpetualPremiums gaining 3bp, FixedResets up 1bp and DeemedRetractibles off 1bp. There were no entries on the Performance Highlights table. Volume returned to average levels.

PerpetualDiscounts now yield 5.10%, equivalent to 6.63% interest at the standard equivalency factor of 1.3x. Long Corporates now yield about 4.60%, so the pre-tax interest-equivalent spread (which in this context is the Seniority Spread) is now about 205bp, a slight tightening from the 210bp reported March 7.