Remember Iceland? The first domino? It’s through the worst of it, according to S&P:
Iceland had its credit rating outlook revised to stable from negative by Standard & Poor’s Ratings Services, which cited economic growth in the country after two years of “severe contraction.”
“Significant headway has been made in restructuring the private-sector balance sheet and we expect the process to be mostly completed by mid-2012,” S&P said. The BBB-/A-3 sovereign ratings were affirmed.
But other dominoes are toppling:
Germany failed to get bids for 35 percent of the 10-year bonds offered for sale today, propelling borrowing costs in Europe higher and the euro lower on concern the region’s debt crisis is driving away investors.
…
The yield on Germany’s 2.25 percent securities maturing in September 2021 climbed 15 basis points to 2.06 percent at 4:46 p.m. London time.
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Belgian 10-year yields surged 41 basis points to 5.48 percent, after reaching 5.53 percent, the highest since November 2000. French 10-year bond yields climbed 16 basis points to 3.69 percent. The yield on Greek two-year notes jumped to more than 120 percent for the first time, before slipping back to 116.59 percent.Total bids at the auction of securities due in January 2022 amounted to 3.889 billion euros, out of a maximum target for the sale of 6 billion euros, according to Bundesbank data.
Six of the last eight bond sales by Germany have been “technically uncovered,” with fewer bids than the maximum amount on offer, Norbert Aul, a rates strategist at RBC Capital Markets in London, said in an e-mailed note.
Under the German auction system, the central bank retains securities at sales for the secondary market. In today’s offering, the debt agency allotted 3.644 billion euros of the securities, leaving the Bundesbank to retain 2.356 billion euros, or 39 percent of the supply. That’s the highest proportion of unsold debt at a 10-year sale since 1995, according to Bloomberg data. The securities were sold at an average yield of 1.98 percent. In the secondary market, the rate rose to 2.13 percent.
DBRS confirmed Westcoast at Pfd-2(low):
DBRS has today confirmed the Unsecured Debentures, First Preferred Shares and Commercial Paper ratings of Westcoast Energy Inc. (Westcoast or the Company) at A (low), Pfd-2 (low) and R-1 (low), respectively, all with Stable trends.
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On a consolidated basis (excluding the intercompany transaction), the Company’s external debt-to-capital ratio (52% at September 30, 2011; 54% at year-end 2008) and cash flow-to-external debt (19% for both the 12 months ending September 30, 2011, and in 2008) were relatively unchanged, while external fixed charges coverage (2.8 times, up from 2.5 times) improved marginally, partly due to contributions from expansions placed in service as noted above.On a non-consolidated basis, Westcoast’s direct ownership of BCPFS fully supports its ability to meet its direct debt obligations. Its credit metrics are enhanced by cash dividends from several sources, the largest of which is Union Gas, which generate approximately 50% of the Company’s non-consolidated cash flow. Excluding the intercompany transaction, Westcoast’s non-consolidated external debt-to-capital ratio increased to 36% in 2010 from 32% in 2008, while cash flow-to-external debt (25%, up from 16%) and external fixed charges coverage (3.2 times, up from 2.2 times) improved significantly, mainly as a result of contributions from expansions noted above.
TMX DataLinx has collywobbles yet again, so this report is being prepared with Yahoo! data.
It was a rough day for the Canadian preferred share market, with PerpetualDiscounts down 9bp, FixedResets off 12bp and DeemedRetractibles losing 14bp. All five entries in the Performance Highlights table were losers. Volume was average.
PerpetualDiscounts now yield 5.15% (this figure is somewhat distorted by the fact that five of the seventeen issues are actually at a premium now and another two are bang-on par; the index is only rebalanced monthly), equivalent to 6.70% interest at the standard equivalency factor of 1.3x. Long Corporates are now at about 4.75%, so the pre-tax interest-equivalent spread is now about 195bp, tightening a bit (perhaps spuriously) from the 205bp reported November 16.
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 | -0.4795 % | 2,133.1 |
FixedFloater | 4.91 % | 4.65 % | 29,609 | 17.08 | 1 | 0.2592 % | 3,137.2 |
Floater | 3.37 % | 3.39 % | 155,972 | 18.71 | 2 | -0.4795 % | 2,303.2 |
OpRet | 4.97 % | 2.45 % | 52,068 | 1.48 | 7 | 0.0220 % | 2,476.5 |
SplitShare | 5.80 % | 6.42 % | 57,570 | 5.17 | 3 | 0.0988 % | 2,530.7 |
Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.0220 % | 2,264.5 |
Perpetual-Premium | 5.58 % | 0.85 % | 103,037 | 0.13 | 13 | -0.2247 % | 2,153.3 |
Perpetual-Discount | 5.31 % | 5.15 % | 100,427 | 14.78 | 17 | -0.0917 % | 2,297.2 |
FixedReset | 5.10 % | 2.97 % | 222,055 | 2.48 | 64 | -0.1184 % | 2,346.7 |
Deemed-Retractible | 5.05 % | 4.44 % | 201,901 | 3.86 | 46 | -0.1418 % | 2,218.0 |
Performance Highlights | |||
Issue | Index | Change | Notes |
SLF.PR.H | FixedReset | -1.59 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 23.50 Bid-YTW : 4.43 % |
ELF.PR.F | Perpetual-Discount | -1.21 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-11-23 Maturity Price : 22.62 Evaluated at bid price : 22.90 Bid-YTW : 5.85 % |
TCA.PR.X | Perpetual-Premium | -1.17 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2013-10-15 Maturity Price : 50.00 Evaluated at bid price : 52.30 Bid-YTW : 3.29 % |
CIU.PR.A | Perpetual-Discount | -1.02 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-11-23 Maturity Price : 23.86 Evaluated at bid price : 24.35 Bid-YTW : 4.71 % |
GWO.PR.L | Deemed-Retractible | -1.01 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 25.55 Bid-YTW : 5.51 % |
Volume Highlights | |||
Issue | Index | Shares Traded |
Notes |
ENB.PR.D | FixedReset | 1,353,175 | New issue settled today. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-11-23 Maturity Price : 23.13 Evaluated at bid price : 25.10 Bid-YTW : 3.67 % |
CM.PR.G | Perpetual-Discount | 117,120 | RBC crossed 50,000 at 24.94; Scotia crossed 30,000 at the same price. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-11-23 Maturity Price : 24.57 Evaluated at bid price : 24.90 Bid-YTW : 5.46 % |
SLF.PR.F | FixedReset | 101,400 | RBC crossed 100,000 at 26.07. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-06-30 Maturity Price : 25.00 Evaluated at bid price : 26.05 Bid-YTW : 4.06 % |
ENB.PR.B | FixedReset | 59,560 | Nesbitt crossed 25,000 at 25.45. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-11-23 Maturity Price : 23.26 Evaluated at bid price : 25.42 Bid-YTW : 3.65 % |
CM.PR.D | Perpetual-Premium | 42,067 | Scotia crossed 30,000 at 25.40. YTW SCENARIO Maturity Type : Call Maturity Date : 2012-04-30 Maturity Price : 25.00 Evaluated at bid price : 25.36 Bid-YTW : 3.20 % |
RY.PR.L | FixedReset | 41,588 | Nesbitt crossed 40,000 at 25.51. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-02-24 Maturity Price : 25.00 Evaluated at bid price : 26.46 Bid-YTW : 2.92 % |
There were 33 other index-included issues trading in excess of 10,000 shares. |
Wide Spread Highlights | ||
Issue | Index | Quote Data and Yield Notes |
GWO.PR.M | Deemed-Retractible | Quote: 26.00 – 26.44 Spot Rate : 0.4400 Average : 0.2887 YTW SCENARIO |
BAM.PR.G | FixedFloater | Quote: 19.34 – 20.12 Spot Rate : 0.7800 Average : 0.6480 YTW SCENARIO |
CIU.PR.A | Perpetual-Discount | Quote: 24.35 – 24.84 Spot Rate : 0.4900 Average : 0.3595 YTW SCENARIO |
HSB.PR.C | Deemed-Retractible | Quote: 25.20 – 25.75 Spot Rate : 0.5500 Average : 0.4263 YTW SCENARIO |
TCA.PR.X | Perpetual-Premium | Quote: 52.30 – 52.60 Spot Rate : 0.3000 Average : 0.2185 YTW SCENARIO |
PWF.PR.L | Perpetual-Discount | Quote: 24.65 – 24.99 Spot Rate : 0.3400 Average : 0.2609 YTW SCENARIO |
ENB.PR.D Reaches Premium on Huge Volume
Thursday, November 24th, 2011Enbridge Inc. has announced:
ENB.PR.D is a FixedReset, 4.00%+237, announced November 14. The issue traded 1,353,175 shares today in a range of 25.05-20 before closing at 25.10-13, 12×5.
For those interested in market trivia, this is the 88th highest daily share volume in the HIMIPref™ database of 632,706 entries.
ENB.PR.D will be tracked by HIMIPref™ and is assigned to the FixedReset index. Vital statistics are:
Maturity Type : Limit Maturity
Maturity Date : 2041-11-23
Maturity Price : 23.13
Evaluated at bid price : 25.10
Bid-YTW : 3.67 %
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