Archive for March, 2014

March 25, 2014

Tuesday, March 25th, 2014

This BMO Field thing really irritates me, so I have sent the following eMail:

Dear Mr. Ford, Ms. Doucette, Ms. Nash and Ms. DiNovo [my Mayor, Councillor, MP & MPP]

I write to urge very close scrutiny of the proposed arrangement whereby the City, provincial government and federal government are being asked to invest $10-million each in leasehold improvements for BMO Field in Toronto.

It has been claimed (link ) that this represents “a pretty good healthy return on the $10 million”.

I have made approximate calculations of the Internal Rate of Return based on figures published in the Toronto Star (link ) and arrive at a figure of approximately 6.2%. While this certainly exceeds the rate available on twenty year bonds, it is far below the rule of thumb for equity and, I suspect, far below the rate of return expected by MLSE, which has been described as “really good” in the context of private equity investments (link ) which have historically averaged more than double the IRR offered to the city ( link )

In addition, it will be noticed that there will be no return of the provincial and federal contributions, which will be lost completely. I wish to remind you all that it is all taxpayer money and for my part I am not too greatly concerned with the details of the route my money takes between my pocket and MLSE’s coffers.

It is apparent that the City has been taken to the cleaners under the give-away splashed out by the previous city administration. The city’s gross undervaluation of naming rights allowed MLSE to make an instant profit from its investment (link ) and in addition, the city’s current and projected receipts from the stadium and parking (roughly $500,000 p.a. to increase to $1.3-million p.a.) are laughable when compared to receipts on, for example, Ricoh Coliseum, estimated at $4-million p.a. (link citing Peddie, Richard (2013). Dream Job. Harper Collins ).

It is my understanding that MLSE wishes to extend the term of their lease in connection with their leasehold improvements, which is entirely understandable. I strongly urge that any such lease extension be examined with great care, with the City taking the opportunity to negotiate much higher payments by MLSE.

Sincerely,

DBRS confirmed BRF at Pfd-3(high):

BREP’s business risk profile is in the BBB (high) range. The Company’s output is highly contracted (93% of expected 2014 generation) with investment-grade counterparties, with an above-average weighted-average duration of approximately 18 years. In addition, BREP’s significantly diversified portfolio of 193 hydro-electric generating stations mitigates the Company’s exposure to hydrology and operational risk at each facility. However, over the last year, BREP has repeatedly purchased hydroelectric facilities that are exposed to the wholesale pricing environment in North America, including the White Pine and Black Bear facilities. Although DBRS expects BREP to attempt to secure long-term contracts for these assets, should BREP’s contracted output fall below 80%, the Company’s business risk profile could be negatively affected.

BREP’s financial risk profile is based on its deconsolidated credit metrics and is reflective of a BBB (high) rating because of the Company’s prudent financing strategy. BREP finances its assets with mostly non-recourse project level debt. With hydrology returning to a long-term average, BREP’s deconsolidated EBITDA-to-interest and deconsolidated cash flow-to-debt ratios returned to ranges reasonable for its current rating. While BREP’s deconsolidated debt-to-capital ratio in 2013 was slightly above the 20% threshold, DBRS expects BREP to maintain this ratio below the 20% threshold as the Company closes the acquisition of Safe Harbor and Bord Gáis with a prudent mix of non-recourse project-level debt and equity.

Brookfield Renewable Power Preferred Equity Inc. is the proud issuer of BRF.PR.A, BRF.PR.C, BRF.PR.E and BRF.PR.F.

It was a mixed day for the Canadian preferred share market today, with PerpetualDiscounts up 4bp, FixedResets off 6bp and DeemedRetractibles gaining 3bp. Volatility was average. Volume was on the low side of average.

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 0.6327 % 2,425.4
FixedFloater 4.70 % 4.30 % 37,057 17.72 1 0.3477 % 3,608.5
Floater 3.00 % 3.10 % 51,861 19.48 4 0.6327 % 2,618.7
OpRet 4.65 % -0.53 % 93,306 0.24 3 0.0775 % 2,687.9
SplitShare 4.81 % 4.18 % 68,365 4.30 5 -0.0080 % 3,078.8
Interest-Bearing 0.00 % 0.00 % 0 0.00 0 0.0775 % 2,457.9
Perpetual-Premium 5.62 % -3.75 % 91,000 0.08 11 0.1322 % 2,363.5
Perpetual-Discount 5.44 % 5.52 % 115,505 14.52 26 0.0366 % 2,447.1
FixedReset 4.69 % 3.61 % 223,889 4.43 79 -0.0649 % 2,515.9
Deemed-Retractible 5.05 % 3.07 % 154,817 0.33 42 0.0346 % 2,471.7
FloatingReset 2.62 % 2.60 % 198,837 7.06 5 0.1926 % 2,450.4
Performance Highlights
Issue Index Change Notes
FTS.PR.H FixedReset -1.52 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2044-03-25
Maturity Price : 21.41
Evaluated at bid price : 21.41
Bid-YTW : 3.81 %
TRP.PR.C FixedReset -1.33 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2044-03-25
Maturity Price : 21.80
Evaluated at bid price : 22.30
Bid-YTW : 3.80 %
CGI.PR.D SplitShare -1.00 % YTW SCENARIO
Maturity Type : Soft Maturity
Maturity Date : 2023-06-14
Maturity Price : 25.00
Evaluated at bid price : 24.75
Bid-YTW : 3.91 %
BAM.PR.K Floater 1.88 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2044-03-25
Maturity Price : 16.83
Evaluated at bid price : 16.83
Bid-YTW : 3.11 %
Volume Highlights
Issue Index Shares
Traded
Notes
ENB.PR.J FixedReset 145,857 TD crossed blocks of 70,000 and 50,000, both at 25.22.
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2044-03-25
Maturity Price : 23.23
Evaluated at bid price : 25.20
Bid-YTW : 4.20 %
ENB.PR.T FixedReset 124,263 TD crossed blocks of 70,000 and 50,000, both at 25.20.
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2044-03-25
Maturity Price : 22.85
Evaluated at bid price : 24.20
Bid-YTW : 4.25 %
MFC.PR.A OpRet 102,275 RBC crossed 100,000 at 25.59.
YTW SCENARIO
Maturity Type : Call
Maturity Date : 2014-06-19
Maturity Price : 25.25
Evaluated at bid price : 25.54
Bid-YTW : -0.53 %
MFC.PR.J FixedReset 102,080 RBC crossed 99,800 at 25.40.
YTW SCENARIO
Maturity Type : Call
Maturity Date : 2018-03-19
Maturity Price : 25.00
Evaluated at bid price : 25.39
Bid-YTW : 3.61 %
ENB.PF.A FixedReset 85,052 Recent new issue.
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2044-03-25
Maturity Price : 23.13
Evaluated at bid price : 25.01
Bid-YTW : 4.30 %
BNS.PR.A FloatingReset 60,950 RBC crossed two blocks of 25,000 each, both at 25.30.
YTW SCENARIO
Maturity Type : Call
Maturity Date : 2018-04-25
Maturity Price : 25.00
Evaluated at bid price : 25.33
Bid-YTW : 2.55 %
There were 27 other index-included issues trading in excess of 10,000 shares.
Wide Spread Highlights
Issue Index Quote Data and Yield Notes
FTS.PR.H FixedReset Quote: 21.41 – 21.75
Spot Rate : 0.3400
Average : 0.2132

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2044-03-25
Maturity Price : 21.41
Evaluated at bid price : 21.41
Bid-YTW : 3.81 %

MFC.PR.F FixedReset Quote: 22.57 – 22.93
Spot Rate : 0.3600
Average : 0.2512

YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 22.57
Bid-YTW : 4.55 %

FTS.PR.G FixedReset Quote: 24.50 – 24.75
Spot Rate : 0.2500
Average : 0.1414

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2044-03-25
Maturity Price : 23.02
Evaluated at bid price : 24.50
Bid-YTW : 3.87 %

GWO.PR.N FixedReset Quote: 22.11 – 22.43
Spot Rate : 0.3200
Average : 0.2142

YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 22.11
Bid-YTW : 4.51 %

CGI.PR.D SplitShare Quote: 24.75 – 25.03
Spot Rate : 0.2800
Average : 0.1839

YTW SCENARIO
Maturity Type : Soft Maturity
Maturity Date : 2023-06-14
Maturity Price : 25.00
Evaluated at bid price : 24.75
Bid-YTW : 3.91 %

PWF.PR.R Perpetual-Discount Quote: 25.22 – 25.47
Spot Rate : 0.2500
Average : 0.1593

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2044-03-25
Maturity Price : 24.79
Evaluated at bid price : 25.22
Bid-YTW : 5.52 %

LB.PR.E To Be Redeemed

Tuesday, March 25th, 2014

Laurentian Bank of Canada has announced (as part of their previously reported new issue announcement):

that it intends to redeem, on June 16, 2014, all of its 4,400,000 issued and outstanding Non-Cumulative Class A Preferred Shares, Series 10 (the “Preferred Shares Series 10”), at a price of $25.00 per share for an aggregate consideration of $110 million.

LB.PR.E is a Straight Perpetual with a 5.25% coupon that commenced trading 2004-4-15.

New Issue: LB FixedReset, 4.30%+255

Tuesday, March 25th, 2014

Laurentian Bank of Canada has announced:

that it has entered into an agreement with a syndicate of underwriters led by RBC Dominion Securities Inc., BMO Capital Markets and Laurentian Bank Securities Inc. (collectively, the “Underwriters”), under which the Underwriters have agreed to buy on a bought deal basis an aggregate of 5,000,000 Basel III-compliant Non-Cumulative Class A Preferred Shares, Series 13 (the “Preferred Shares Series 13”), at a price of $25.00 per Preferred Share Series 13 for gross proceeds of $125 million (the “Offering”). The Preferred Shares Series 13 will be offered for sale to the public in each of the provinces of Canada pursuant to a prospectus supplement to Laurentian’s short form base shelf prospectus dated October 10, 2012, which supplement will be filed with Canadian securities regulatory authorities in all Canadian provinces.

Holders of Preferred Shares Series 13 will be entitled to receive non-cumulative preferential fixed quarterly dividends for the initial period ending on, but excluding, June 15, 2019, as and when declared by the board of directors of the Bank, payable in the amount of $0.26875 per Preferred Share Series 13, to yield 4.30 per cent annually.

Thereafter, the dividend rate will reset every five years to be equal to the 5-Year Government of Canada Bond Yield plus 2.55 per cent. Subject to certain conditions, holders may elect to convert any or all of their Preferred Shares Series 13 into an equal number of Basel III-compliant Non-Cumulative Class A Preferred Shares, Series 14 (the “Preferred Shares Series 14”) on June 15, 2019 and on June 15 every five years thereafter. Holders of the Preferred Shares Series 14 will be entitled to receive non-cumulative preferential floating rate quarterly dividends, as and when declared by the board of directors of the Bank, equal to the then 3-month Government of Canada Treasury Bill yield plus 2.55 per cent. The Offering is expected to close on or about April 3, 2014 and is subject to Laurentian receiving all necessary regulatory approvals.

Laurentian also announced today that it intends to redeem, on June 16, 2014, all of its 4,400,000 issued and outstanding Non-Cumulative Class A Preferred Shares, Series 10 (the “Preferred Shares Series 10”), at a price of $25.00 per share for an aggregate consideration of $110 million.

The net proceeds of the Offering will be added to Laurentian’s general funds and will be used for general corporate purposes (including, subject to the approval of the Office of the Superintendent of Financial Institutions, to fund the redemption of the Preferred Shares Series 10).

This issue is very similar to LB.PR.F, a FixedReset 4.00%+260 announced 2012-10-11 … except that the new issue is NVCC compliant and LB.PR.F ain’t.

Update: In connection with the NVCC compliance, it should be noted that DBRS has provisionally rated this paper at Pfd-3(low):

DBRS assigned the NVCC Preferred Shares Series 13 a rating equal to that Bank’s intrinsic assessment less four rating notches because the Series 13 has only an Office of the Superintendent of Financial Institutions (OSFI)-compliant non-viable contingent capital (NVCC) trigger, which is consistent with the OSFI requirements for NVCC instruments, and no additional triggers.

… which may be compared with Pfd-3 on non-compliant issues.

The new issue is rated P-3 by S&P (BB on the global scale):

The ‘BB’ rating stands three notches below the stand-alone credit profile (SACP), incorporating:

  • •A deduction of two notches, the minimum downward notching from the SACP under our criteria for a bank hybrid capital instrument; and
  • •The deduction of an additional notch to reflect that the preferred shares feature a contingent conversion trigger provision. Should a trigger event occur (as defined by The Office of the Superintendent of Financial Institutions’ [OSFI] guideline for Capital Adequacy Requirements, Chapter 2), each preferred share outstanding will automatically and immediately be converted, without the holder’s consent, into a number of fully paid and freely tradable common shares of the bank determined in accordance with a conversion formula.

… which may be compared with P-3(high) on non-compliant issues.

March 24, 2014

Monday, March 24th, 2014

Top o’ the news banner headline! Live, real-time stock quotes for Globe Unlimited subscribers!

We are pleased to bring our Globe Unlimited subscribers live, real-time stock quotes from the Toronto Stock Exchange and TSX Venture Exchange.

Our Globe Investor readers have asked for this feature for years, since Canadian media websites and portals offer stock quotes with a 15-minute delay. Our real-time quotes, which come with a Globe Unlimited subscription, are sourced from the TSX and reflect a large trading volume, for the most accurate price.

This is the first time a Canadian media site has integrated live stock quotes with market data and breaking news. Our subscribers can now see the latest news on their investments on the same page as real-time stock quotes. You can find them at the top of our company stock quote pages — all you need to do is type in a ticker symbol and click on it to get to the page.

They will probably just be the bare quote (i.e., no depth information, possibly no size), but I won’t know until I’ve looked at it during market hours tomorrow. But one way or another, it’s good news!

The Pension Fund That Doesn’t Do It’s Own Credit Analysis has won a round against S&P:

McGraw Hill Financial Inc. (MHFI)’s Standard & Poor’s unit must face California’s claims it deceived the state’s pension funds in its ratings of mortgage-back securities, a judge said in a provisional ruling.

California Superior Court Judge Curtis Karnow in San Francisco said yesterday he was inclined to deny the company’s request to throw out the state’s claims of deceptive conduct from a lawsuit alleging S&P violated false-advertising and business practices laws.

The California pension systems bought the securities because they had received AAA ratings, signaling they were low-risk, California Attorney General Kamala Harris said in the lawsuit.

Rob Ford doesn’t believe in corporate welfare:

The deal to expand BMO Field will see Maple Leaf Sports and Entertainment pony up $90 million to add a second deck, a roof over the stands and make it both football and soccer friendly.

But for it to go ahead they will be asking all three levels of government for $30 million, which would include a $10-million loan from Toronto.

“I just don’t think the taxpayers should have to pay for it,” said the mayor. “It should be paid for by the private sector. It would be nice if we wanted to expand Deco Labels and have the taxpayers help us out, but it doesn’t work like that.”

Ford says taxpayers already built a stadium on the CNE grounds to the tune of $55 million in cash and land contributions and if MLSE wants to change it, it should be them who pays for it.

… so naturally he’s getting criticized again:

It’s a measure of his frustration with Ford’s attempt to make the expansion of BMO Field a political issue that Leiweke chose this venue to air his grievances.

Leiweke first talked about the surprisingly decent weather, before segueing to more prosaic matters.

“The other good news I had today is that the mayor’s going to vote against our (stadium expansion) plan, which probably means we win 42-2.”

I don’t know the details on this particular issue, but I do know that the city got taken to the cleaners by the MLSE welfare bums on the initial deal:

Even before the team began playing its owner, Maple Leaf Sports and Entertainment, partnered with all three levels of government to build the team’s home stadium. MLSE pledged $18 million to the stadium’s $62.8 million cost, while the city contributed $9.8 million in cash and donated land worth $10 million.

MLSE quickly recouped its initial investment by selling the stadium’s naming rights to Bank of Montreal for a reported $27 million, but the cash-strapped city’s return on investment has materialized more slowly.

Monday MLSE and the city issued a joint press release stating that BMO Field had tuned a $1.1 million profit, which the city and MLSE would split.

In the five years since the stadium opened the city’s share of the profits has totaled $1.75 million, enough to make author Dave Zirin wonder whether Toronto had wasted cash on a team that didn’t need its help.

“The people of Toronto would be better off if that money was dropped from a plane and people could just pick it up and spend it (locally)” says Zirin, author of Bad Sports: How Owners are Ruining the Games we Love. “Every bit of factual data shows that the return on the investment is just not worth it.”

Poor Rob! He never learned the rules of the Club: when you get some influence, you have to grease the other club members. If he’d followed that rule, I don’t think there would be quite so many other issues.

A buddy sent me a link to Did Hyman Minsky find the secret behind financial crashes?:

The “Minsky moment”, a term coined by later economists, is the moment when the whole house of cards falls down. Ponzi finance is underpinned by rising asset prices and when asset prices eventually start to fall then borrowers and banks realise there is debt in the system that can never be paid off. People rush to sell assets causing an even larger fall in prices.

It is like the moment that a cartoon character runs off a cliff. They keep on running for a while, still believing they’re on solid ground. But then there’s a moment of sudden realisation – the Minsky moment – when they look down and see nothing but thin air. Then they plummet to the ground, and that’s the crisis and crash of 2008.

Those of a historical bent may find amusement in my market report of November 23, 2007:

Times are tough. There’s a big indigestible mass of dubious debt on the books all over the place, but – as far as I can see – the financial system is not melting down and we are not in a depression. I’ll simply repeat what I’ve been saying for the past several months: Times are tough. Firms that have been living on the edge may find they fall off. There may even be a spectacular blow-up or two, if a financial institution finds out its risk controls aren’t what they might have wished them to be. And I most certainly would not want to be earning my living as a casual labourer in the US housing industry. But it’s a pause, nothing more.

We arrived at the Minsky Moment about ten months later. To my astonishment, the blog Naked Capitalism is still going strong … gloom, doom and complete lack of analytical ability sells well!

It was a good day for the Canadian preferred share market, with PerpetualDiscounts winning 20bp, FixedResets gaining 11bp and DeemedRetractibles up 12bp. There were quite a few performance highlights, all but one of them winners. Volume was below average.

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 -0.5150 % 2,410.1
FixedFloater 4.72 % 4.32 % 37,507 17.70 1 0.0497 % 3,596.0
Floater 3.02 % 3.11 % 51,502 19.44 4 -0.5150 % 2,602.3
OpRet 4.65 % -0.36 % 87,921 0.24 3 0.0258 % 2,685.9
SplitShare 4.81 % 4.35 % 67,552 4.30 5 -0.0953 % 3,079.0
Interest-Bearing 0.00 % 0.00 % 0 0.00 0 0.0258 % 2,456.0
Perpetual-Premium 5.63 % -2.05 % 90,186 0.08 11 0.1574 % 2,360.4
Perpetual-Discount 5.44 % 5.50 % 117,155 14.55 26 0.2000 % 2,446.2
FixedReset 4.69 % 3.50 % 224,032 4.43 79 0.1110 % 2,517.5
Deemed-Retractible 5.05 % 2.84 % 157,064 0.34 42 0.1185 % 2,470.8
FloatingReset 2.62 % 2.61 % 185,870 7.07 5 0.0723 % 2,445.7
Performance Highlights
Issue Index Change Notes
BAM.PR.K Floater -1.67 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2044-03-24
Maturity Price : 16.52
Evaluated at bid price : 16.52
Bid-YTW : 3.17 %
ELF.PR.G Perpetual-Discount 1.02 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2044-03-24
Maturity Price : 21.80
Evaluated at bid price : 21.80
Bid-YTW : 5.55 %
FTS.PR.H FixedReset 1.07 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2044-03-24
Maturity Price : 21.42
Evaluated at bid price : 21.74
Bid-YTW : 3.73 %
ENB.PR.A Perpetual-Premium 1.19 % YTW SCENARIO
Maturity Type : Call
Maturity Date : 2014-04-23
Maturity Price : 25.00
Evaluated at bid price : 25.60
Bid-YTW : -18.30 %
IFC.PR.A FixedReset 1.30 % YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 24.19
Bid-YTW : 4.12 %
BAM.PR.N Perpetual-Discount 1.57 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2044-03-24
Maturity Price : 20.70
Evaluated at bid price : 20.70
Bid-YTW : 5.77 %
Volume Highlights
Issue Index Shares
Traded
Notes
RY.PR.Z FixedReset 96,552 RBC crossed blocks of 49,300 and 14,200, both at 25.50.
YTW SCENARIO
Maturity Type : Call
Maturity Date : 2019-05-24
Maturity Price : 25.00
Evaluated at bid price : 25.51
Bid-YTW : 3.70 %
TRP.PR.B FixedReset 68,539 Nesbitt crossed 60,000 at 20.20.
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2044-03-24
Maturity Price : 20.10
Evaluated at bid price : 20.10
Bid-YTW : 3.83 %
BAM.PR.X FixedReset 60,034 RBC crossed 49,900 at 21.38.
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2044-03-24
Maturity Price : 21.37
Evaluated at bid price : 21.37
Bid-YTW : 4.36 %
MFC.PR.F FixedReset 56,979 Scotia crossed 51,100 at 22.50.
YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 22.45
Bid-YTW : 4.61 %
MFC.PR.A OpRet 51,140 RBC crossed 48,900 at 25.59.
YTW SCENARIO
Maturity Type : Call
Maturity Date : 2014-06-19
Maturity Price : 25.25
Evaluated at bid price : 25.53
Bid-YTW : -0.36 %
BNS.PR.Z FixedReset 33,185 YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2022-01-31
Maturity Price : 25.00
Evaluated at bid price : 24.34
Bid-YTW : 3.71 %
There were 25 other index-included issues trading in excess of 10,000 shares.
Wide Spread Highlights
Issue Index Quote Data and Yield Notes
BAM.PR.B Floater Quote: 16.69 – 17.03
Spot Rate : 0.3400
Average : 0.2098

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2044-03-24
Maturity Price : 16.69
Evaluated at bid price : 16.69
Bid-YTW : 3.14 %

MFC.PR.K FixedReset Quote: 24.44 – 24.71
Spot Rate : 0.2700
Average : 0.1797

YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 24.44
Bid-YTW : 4.17 %

BAM.PR.K Floater Quote: 16.52 – 16.89
Spot Rate : 0.3700
Average : 0.2862

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2044-03-24
Maturity Price : 16.52
Evaluated at bid price : 16.52
Bid-YTW : 3.17 %

GWO.PR.F Deemed-Retractible Quote: 25.32 – 25.57
Spot Rate : 0.2500
Average : 0.1717

YTW SCENARIO
Maturity Type : Call
Maturity Date : 2014-04-23
Maturity Price : 25.00
Evaluated at bid price : 25.32
Bid-YTW : -10.86 %

CIU.PR.C FixedReset Quote: 21.78 – 22.19
Spot Rate : 0.4100
Average : 0.3392

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2044-03-24
Maturity Price : 21.44
Evaluated at bid price : 21.78
Bid-YTW : 3.63 %

TD.PR.Q Deemed-Retractible Quote: 26.30 – 26.50
Spot Rate : 0.2000
Average : 0.1397

YTW SCENARIO
Maturity Type : Call
Maturity Date : 2014-04-23
Maturity Price : 25.75
Evaluated at bid price : 26.30
Bid-YTW : -10.84 %

March 21, 2014

Friday, March 21st, 2014

There was a thought-provoking comment in a Globe & Mail story on the Ukraine’s importance to the global grain trade:

One thing I don’t see in this article: to what extent is Ukraine dependant on Crimean ports for its grain exports?

There’s a very good infographic published by Lloyd’s List … most of the shipping is from western ports around Odessa, but there are quite a few busy ports in the Crimea. Lloyd’s List has a long string of articles about the Crimean situation, but there’s a pay-wall. One purported reprint claims:

“But the situation with the sea ports is much more serious, because the Crimean ports cover nearly 5.4m tonnes of potential shipment volumes, through Sevastopol, Kerch and Feodosia,” said Mr [Rodion] Rybchinskiy [head of the business projects division at APK-Inform, a Russian-owned agricultural consultancy with a Kiev office].

His expectation is that secession after Sunday’s referendum will see grain shipments changed to ports that remain in Ukraine, namely Odessa, Nikolayev and Kherson, which stand to benefit from the situation.

Bloomberg’s Matt Levine highlights the fact that competent traders don’t get cheated:

He then tendered it into the quantitative easing auction at the end of that day, and … oops! The BOE decided to be price-sensitive, for the only time ever,3 because this bond’s price got really out of whack, and because other dealers called the BOE to complain, as you’d expect them to:

By 09:39 (38 minutes after Mr Stevenson began trading in the Bond), a market participant had telephoned the BOE regarding the Bond’s outperformance. Several other market participants telephoned the BOE throughout the day, suggesting that the Bond had been “squeezed”, “rammed”, and that someone “was messing around with” it.

No honor among thieves etc. So the BOE didn’t buy any of the bond that Stevenson was trading, its price got right back into whack, and Stevenson lost a lot of money:

One lesson here is, if you’re going to manipulate markets, you should be really sure that your price-insensitive buyer is in fact price-insensitive,4 and a buyer.

Which is exactly what should be happening, but Stevenson’s been banned from the industry anyway, just to prove how rough and tough the regulators are in their desire to protect incompetent traders from facing the consequences of their incompetence. This ensures that there will always be lots of incompetent traders, and hence a need to protect them.

We might soon be getting crowdfunding:

Crowdfunding would be available to Canadian issuers (both reporting issuers and non-reporting issuers), other than investment funds, non-reporting real estate issuers and issuers without a written business plan. Under the exemption, a crowdfunding issuer, its affiliates and others in a common enterprise with the issuer would be permitted to raise an aggregate of $1.5 million within any 12-month period. (The British Columbia proposal limits a crowdfunding issuer to two offerings of a maximum of $150,000 each over any calendar year). Investment by a purchaser under the proposed OSC exemption would be limited to $2,500 per single investment with a $10,000 aggregate limit on all crowdfunding investments for each calendar year.

Investors must receive a disclosure document containing basic information about the offering, the issuer and the funding portal and sign a risk acknowledgement form. If the issuer has incurred expenditures prior to using the exemption, the disclosure document would be required to include annual financial statements and, if specified capital raising ($500,000) or expenditure ($150,000) thresholds have been surpassed by the issuer, the financial statements would haved to be audited. Investors will have a right of action for damages or rescission if any materials made available to them by the issuer, including the disclosure document, contain a misrepresentation, and will have 48 hours prior to the disclosed offering deadline to withdraw their subscription.

I’m sure I’m way behind the curve on this one, but I’ve become aware of a new trend in Toronto real-estate:

In some cases, the eye-popping amounts that some home buyers are flinging around in order to win bidding wars in Toronto these days lead to an inevitable question.

“I wonder what it will get appraised for,” speculate the real estate agents who keep an eye on the action.

In other words, a bidder who pays $150,000 above an asking price of, say, $700,000 or $800,000 better hope that an appraiser won’t balk at the selling price if the buyer hopes to have a mortgage and mortgage insurance.

Mr. Fleming says bidders who are tempted to overpay in their desperation to obtain a house can run into difficulty if the property appraiser estimates that the house is worth far less. He says deals don’t often fall through but buyers should be aware of the pitfalls. “I think it very rarely happens. But if you don’t have the minimum required, you end up having to go to the bank of mom and dad.”

A buddy of mine recently sold her condominium for about $150,000. She got one lowball and two acceptable offers … both of the acceptable offers were conditional on financing and were void when the CMHC turned down the banks’ applications for insurance. She’s sold it now, thanks to the purchaser’s Bank of Mom and Dad.

It was a fine day for the Canadian preferred share market, with PerpetualDiscounts up 16bp, FixedResets winning 24bp and DeemedRetractibles gaining 4bp. Volatility was average, but comprised exclusively of FixedReset winners. Volume was average.

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 -0.2141 % 2,422.6
FixedFloater 4.72 % 4.32 % 37,106 17.70 1 0.0995 % 3,594.2
Floater 3.00 % 3.11 % 52,099 19.46 4 -0.2141 % 2,615.8
OpRet 4.65 % -0.19 % 87,881 0.25 3 0.0388 % 2,685.2
SplitShare 4.81 % 4.34 % 67,069 4.31 5 0.2149 % 3,082.0
Interest-Bearing 0.00 % 0.00 % 0 0.00 0 0.0388 % 2,455.3
Perpetual-Premium 5.64 % -2.06 % 90,443 0.08 11 0.0902 % 2,356.7
Perpetual-Discount 5.45 % 5.48 % 118,912 14.52 26 0.1578 % 2,441.3
FixedReset 4.69 % 3.50 % 224,184 6.81 79 0.2379 % 2,514.7
Deemed-Retractible 5.06 % 3.04 % 155,288 0.28 42 0.0434 % 2,467.9
FloatingReset 2.57 % 2.56 % 192,475 7.09 5 0.0321 % 2,443.9
Performance Highlights
Issue Index Change Notes
MFC.PR.F FixedReset 1.03 % YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 22.53
Bid-YTW : 4.44 %
IAG.PR.G FixedReset 1.12 % YTW SCENARIO
Maturity Type : Call
Maturity Date : 2017-06-30
Maturity Price : 25.00
Evaluated at bid price : 26.07
Bid-YTW : 2.89 %
FTS.PR.H FixedReset 1.18 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2044-03-21
Maturity Price : 21.51
Evaluated at bid price : 21.51
Bid-YTW : 3.63 %
SLF.PR.G FixedReset 1.45 % YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 22.43
Bid-YTW : 4.35 %
Volume Highlights
Issue Index Shares
Traded
Notes
RY.PR.Z FixedReset 194,190 RBC crossed 148,700 at 25.50; Scotia crossed 26,300 at the same price.
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2044-03-21
Maturity Price : 23.31
Evaluated at bid price : 25.50
Bid-YTW : 3.65 %
MFC.PR.L FixedReset 146,600 Recent new issue.
YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 24.46
Bid-YTW : 4.12 %
NA.PR.Q FixedReset 145,175 RBC crossed 55,000 at 25.95, bought three blocks of 10,000 each from TD at 25.94, then another 19,900 from TD at 25.94. TD crossed 30,000 at 25.94.
YTW SCENARIO
Maturity Type : Call
Maturity Date : 2017-11-15
Maturity Price : 25.00
Evaluated at bid price : 25.92
Bid-YTW : 2.85 %
RY.PR.W Perpetual-Discount 88,300 Nesbitt crossed 83,200 at 25.08.
YTW SCENARIO
Maturity Type : Call
Maturity Date : 2014-04-20
Maturity Price : 25.00
Evaluated at bid price : 25.10
Bid-YTW : 4.13 %
BNS.PR.T FixedReset 79,212 Scotia crossed two blocks of 36,800 each, both at 25.34.
YTW SCENARIO
Maturity Type : Call
Maturity Date : 2014-04-25
Maturity Price : 25.00
Evaluated at bid price : 25.35
Bid-YTW : 0.21 %
BMO.PR.R FloatingReset 64,720 Scotia crossed 60,000 at 24.80.
YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2022-01-31
Maturity Price : 25.00
Evaluated at bid price : 24.80
Bid-YTW : 2.56 %
There were 30 other index-included issues trading in excess of 10,000 shares.
Wide Spread Highlights
Issue Index Quote Data and Yield Notes
IFC.PR.C FixedReset Quote: 25.58 – 25.94
Spot Rate : 0.3600
Average : 0.2351

YTW SCENARIO
Maturity Type : Call
Maturity Date : 2016-09-30
Maturity Price : 25.00
Evaluated at bid price : 25.58
Bid-YTW : 3.20 %

ELF.PR.F Perpetual-Discount Quote: 23.35 – 23.88
Spot Rate : 0.5300
Average : 0.4194

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2044-03-21
Maturity Price : 23.09
Evaluated at bid price : 23.35
Bid-YTW : 5.77 %

MFC.PR.F FixedReset Quote: 22.53 – 22.84
Spot Rate : 0.3100
Average : 0.1999

YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 22.53
Bid-YTW : 4.44 %

ELF.PR.H Perpetual-Discount Quote: 24.32 – 24.60
Spot Rate : 0.2800
Average : 0.1973

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2044-03-21
Maturity Price : 23.92
Evaluated at bid price : 24.32
Bid-YTW : 5.74 %

ELF.PR.G Perpetual-Discount Quote: 21.58 – 21.98
Spot Rate : 0.4000
Average : 0.3274

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2044-03-21
Maturity Price : 21.58
Evaluated at bid price : 21.58
Bid-YTW : 5.61 %

RY.PR.C Deemed-Retractible Quote: 25.66 – 25.88
Spot Rate : 0.2200
Average : 0.1582

YTW SCENARIO
Maturity Type : Call
Maturity Date : 2014-04-20
Maturity Price : 25.50
Evaluated at bid price : 25.66
Bid-YTW : 0.63 %

March 20, 2014

Friday, March 21st, 2014

The war on traders is having one predictable effect:

Junior bankers in the United Arab Emirates are reaping almost 36 percent more salary than their counterparts in London, with bonuses almost double those paid in the U.K. capital, compensation data provider Emolument said.

Fixed salaries at the analyst level in the U.A.E. average $91,000, compared with $73,000 in London, the group said in an e-mailed statement. Bonuses in the U.A.E., which consists of sheikhdoms including Dubai and Abu Dhabi, averaged $27,000 compared with $14,000. For associates, fixed pay in the U.A.E. was $107,000, compared with $108,000 in London, while bonuses of $40,000 in the U.K. were about 29 percent higher.

The SEC is hoping to destroy the remnants of the public bond market:

The U.S. Securities and Exchange Commission is examining how electronic bond-trading platforms allow dealers to give clients different prices on the same securities in the $40 trillion market, potentially hurting smaller investors.

SEC regulators want to understand why brokers sometimes block their rivals and clients from seeing some of their prices for municipal, corporate and other bonds, according to a person with direct knowledge of the examination. They’re concerned that being able to turn quotes on and off may allow market manipulation, and that smaller buyers may not get the best prices, the person said.

Banks have increasingly turned to electronic systems to sell bonds on behalf of their clients as a way of aggregating a greater number of bids. That’s become more appealing as it’s become more expensive for dealers to use their own money to make markets because of higher regulatory capital requirements.

U.S. investment firms predict that 30 percent of corporate-bond trading will occur electronically by 2015, up from 14 percent of investment-grade notes in 2012, according to an August 2013 report by Greenwich Associates and McKinsey & Co. As much as 50 percent of municipal trades already may occur electronically, according to a TMC Bonds comment letter to the SEC last year.

Today was something of a non-event for the Canadian preferred share market, with PerpetualDiscounts and FixedResets both flat, while DeemedRetractibles were off 3bp. Volatility was minimal. Volume was above average.

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 0.2863 % 2,427.8
FixedFloater 4.73 % 4.33 % 36,952 17.70 1 -0.4950 % 3,590.6
Floater 3.00 % 3.10 % 52,501 19.48 4 0.2863 % 2,621.4
OpRet 4.65 % -0.34 % 89,311 0.25 3 -0.0388 % 2,684.1
SplitShare 4.82 % 4.33 % 66,357 4.31 5 -0.0080 % 3,075.4
Interest-Bearing 0.00 % 0.00 % 0 0.00 0 -0.0388 % 2,454.4
Perpetual-Premium 5.63 % -1.87 % 89,383 0.08 11 0.0143 % 2,354.6
Perpetual-Discount 5.45 % 5.53 % 119,700 14.52 26 0.0000 % 2,437.5
FixedReset 4.70 % 3.54 % 223,762 6.81 79 0.0015 % 2,508.8
Deemed-Retractible 5.06 % 2.99 % 157,206 0.28 42 -0.0308 % 2,466.8
FloatingReset 2.57 % 2.55 % 195,272 7.09 5 0.0563 % 2,443.1
Performance Highlights
Issue Index Change Notes
FTS.PR.H FixedReset -1.16 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2044-03-20
Maturity Price : 21.26
Evaluated at bid price : 21.26
Bid-YTW : 3.67 %
Volume Highlights
Issue Index Shares
Traded
Notes
BAM.PF.E FixedReset 144,238 Recent new issue.
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2044-03-20
Maturity Price : 22.91
Evaluated at bid price : 24.46
Bid-YTW : 4.23 %
TD.PR.Y FixedReset 134,500 TD crossed blocks of 55,000 and 25,000, both at 25.20. RBC crossed 50,000 at the same price.
YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2022-01-31
Maturity Price : 25.00
Evaluated at bid price : 25.17
Bid-YTW : 3.43 %
NA.PR.S FixedReset 110,598 Nesbitt crossed 25,000 at 25.29. TD crossed 50,000 at the same price.
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2044-03-20
Maturity Price : 23.25
Evaluated at bid price : 25.30
Bid-YTW : 3.86 %
RY.PR.Z FixedReset 94,780 TD crossed 48,000 at 25.50.
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2044-03-20
Maturity Price : 23.30
Evaluated at bid price : 25.49
Bid-YTW : 3.65 %
ENB.PF.A FixedReset 83,496 Recent new issue.
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2044-03-20
Maturity Price : 23.12
Evaluated at bid price : 24.99
Bid-YTW : 4.19 %
SLF.PR.I FixedReset 63,641 TD crossed 56,300 at 26.05.
YTW SCENARIO
Maturity Type : Call
Maturity Date : 2016-12-31
Maturity Price : 25.00
Evaluated at bid price : 25.88
Bid-YTW : 2.88 %
There were 40 other index-included issues trading in excess of 10,000 shares.
Wide Spread Highlights
Issue Index Quote Data and Yield Notes
BAM.PR.K Floater Quote: 16.77 – 17.22
Spot Rate : 0.4500
Average : 0.2868

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2044-03-20
Maturity Price : 16.77
Evaluated at bid price : 16.77
Bid-YTW : 3.12 %

GWO.PR.G Deemed-Retractible Quote: 24.05 – 24.25
Spot Rate : 0.2000
Average : 0.1198

YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 24.05
Bid-YTW : 5.69 %

ELF.PR.G Perpetual-Discount Quote: 21.56 – 21.88
Spot Rate : 0.3200
Average : 0.2478

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2044-03-20
Maturity Price : 21.56
Evaluated at bid price : 21.56
Bid-YTW : 5.61 %

BNS.PR.K Deemed-Retractible Quote: 25.36 – 25.55
Spot Rate : 0.1900
Average : 0.1227

YTW SCENARIO
Maturity Type : Call
Maturity Date : 2014-04-28
Maturity Price : 25.00
Evaluated at bid price : 25.36
Bid-YTW : -2.84 %

MFC.PR.C Deemed-Retractible Quote: 21.68 – 21.88
Spot Rate : 0.2000
Average : 0.1383

YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 21.68
Bid-YTW : 6.24 %

TD.PR.P Deemed-Retractible Quote: 26.02 – 26.20
Spot Rate : 0.1800
Average : 0.1225

YTW SCENARIO
Maturity Type : Call
Maturity Date : 2014-04-19
Maturity Price : 25.75
Evaluated at bid price : 26.02
Bid-YTW : 0.31 %

March 19, 2014

Wednesday, March 19th, 2014

Jonathan Weil of Bloomberg decries regulatory extortion:

New York Attorney General Eric Schneiderman is out again with another reminder that he doesn’t like the way high-frequency traders operate. He believes they have unfair advantages, and that it’s a bad idea for stock exchanges to sell them special services that cater to their wants. For that matter, so do I. So on that we can agree.

But Schneiderman also says there’s something about these arrangements that might be illegal, without saying what it is. If that’s true, he ought to spell it out. Instead, he’s back to his old ways of threatening to investigate companies and maybe sue them for fraud unless they change their practices in a way that he deems acceptable. No matter how noble his intentions, this isn’t how a law-enforcement officer should operate.

Sadly, extortion works:

Marketwired, a company that publishes and distributes corporate earnings and other market-moving news releases, said on Wednesday that it will no longer sell directly to high-frequency trading companies.

The action comes amid a wide-ranging probe by New York Attorney General Eric Schneiderman to end early access to information by technologically sophisticated traders, and follows a similar decision last month by Berkshire Hathaway’s Business Wire.

Marketwired said it would no longer provide its distribution service to high-frequency trading firms to “eliminate any perceived advantages gained through technology by certain customers,” according to a statement.

Naturally, there is a little reaction:

Mark Gorton knows what will happen on the day high-frequency traders’ computers get kicked out of the New York Stock Exchange.

“All you’re going to do is have a data center that’s across the street,” said Gorton, founder of the Lime Wire LLC music-sharing service and managing director of Tower Research Capital LLC, one of the most prolific equity traders in America. “Everyone’s going to want to put their computers there.”

During a panel discussion yesterday following Schneiderman’s speech, Chad Johnson, chief of the New York Investor Protection Bureau in the attorney general’s office, said his boss doesn’t “pine for the days before electronic trading,” and recognizes there were issues in the past.

“The focus of our initiative is on the abusive practices, the latency arbitrage and the like,” Johnson said yesterday. “The strategies are ultimately extracting from the capital markets enormous sums of money and not providing benefit that makes that worthwhile,” he added. “You don’t necessarily have to get rid of the bad and toss the good — if there is good — at the same time.”

At issue is a model that regulators have permitted for years. Firms pay to place their systems in the same data centers as the exchanges, letting them directly plug in their companies’ servers and trade thousandths or even millionths of a second faster. They also purchase proprietary data feeds, which are faster and more detailed than the stock-trading information available on the public ticker.

The fact is that the market structure rewards speed. So there’s going to be competition for speed. I don’t see that there’s any way around that, even supposing that a rational person would want to get around that. The best that the regulators can do – assuming they are stupid enough to do it – is create a forest of totally arbitrary rules, which people will then devote vast resources to getting around. Sheer craziness. But Gorton’s last point is best:

“It’s true that grandma is not putting a computer in the data center to execute her orders,” Gorton said. “But when she routes her orders through a brokerage firm, that firm has an order and now actually the computer at the brokerage firm and the computer of the professional traders are on an exact level playing field.”

Exactly. It’s called competition. Why is Schneiderman so eager to protect the incompetent?

The article referenced a paper by Eric Budish†, Peter Cramton and John Shim titled The High-Frequency Trading Arms Race: Frequent Batch Auctions as a Market Design Response:

We argue that the continuous limit order book is a flawed market design and propose that financial exchanges instead use frequent batch auctions: uniform-price sealed-bid double auctions conducted at frequent but discrete time intervals, e.g., every 1 second. Our argument has four parts. First, we use millisecond-level direct-feed data from exchanges to show that the continuous limit order book market design does not really “work” in continuous time: market correlations completely break down at high-frequency time horizons. Second, we show that this correlation breakdown creates frequent technical arbitrage opportunities, available to whomever is fastest, which in turn creates an arms race to exploit such opportunities. Third, we develop a simple new theory model motivated by these empirical facts. The model shows that the arms race is not only socially wasteful – a prisoner’s dilemma built directly into the market design – but moreover that its cost is ultimately borne by investors via wider spreads and thinner markets. Last, we show that frequent batch auctions eliminate the arms race, both because they reduce the value of tiny speed advantages and because they transform competition on speed into competition on price. Consequently, frequent batch auctions lead to narrower spreads, deeper markets, and increased social welfare.

The FOMC announced more tapering:

The Committee currently judges that there is sufficient underlying strength in the broader economy to support ongoing improvement in labor market conditions. In light of the cumulative progress toward maximum employment and the improvement in the outlook for labor market conditions since the inception of the current asset purchase program, the Committee decided to make a further measured reduction in the pace of its asset purchases. Beginning in April, the Committee will add to its holdings of agency mortgage-backed securities at a pace of $25 billion per month rather than $30 billion per month, and will add to its holdings of longer-term Treasury securities at a pace of $30 billion per month rather than $35 billion per month. The Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction. The Committee’s sizable and still-increasing holdings of longer-term securities should maintain downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative, which in turn should promote a stronger economic recovery and help to ensure that inflation, over time, is at the rate most consistent with the Committee’s dual mandate.

Mexico is issuing long bonds:

When a French utility completed its sale of 100-year bonds denominated in pounds in January, Mexico took note.

Four years after becoming just the second country to sell dollar debt due in 100 years, Mexico last week issued 1 billion pounds ($1.66 billion) of securities that mature in 2114, becoming the only nation with two century bonds. U.K. investors accounted for 84 percent of buyers in the March 12 offering, said Alejandro Diaz de Leon, Mexico’s public debt chief. The sale by Electricite de France SA in January underscored the pent-up demand for longer-dated debt in pounds, according to Barclays Plc, which helped underwrite both deals.

“Mexico historically has distinguished themselves from other sovereigns in terms of always looking at creative ways of getting more efficiency in terms of their debt management strategy,” Raul Martinez-Ostos, head of Mexican operations at Barclays, said by phone from Mexico City. “Here it was really driven by real-money institutional accounts in the U.K.”

It was a mixed day for the Canadian preferred share market, with PerpetualDiscounts off 6bp, FixedResets up 10bp and DeemedRetractibles gaining 5bp. Volatility was low. Volume was low.

PerpetualDiscounts now yield 5.54%, equivalent to 7.20% interest at the standard equivalency factor of 1.3x. Long corporates now yield about 4.45%, so the pre-tax interest-equivalent spread (in this context, the “Seniority Spread”) is now about 275bp, a significant widening from the 265bp reported March 12.

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 -0.4560 % 2,420.9
FixedFloater 4.70 % 4.30 % 37,533 17.73 1 0.5475 % 3,608.5
Floater 3.01 % 3.11 % 52,019 19.46 4 -0.4560 % 2,613.9
OpRet 4.65 % -0.79 % 92,641 0.25 3 0.0905 % 2,685.2
SplitShare 4.82 % 4.33 % 66,192 4.32 5 -0.1669 % 3,075.6
Interest-Bearing 0.00 % 0.00 % 0 0.00 0 0.0905 % 2,455.3
Perpetual-Premium 5.63 % -1.00 % 92,548 0.08 11 0.0608 % 2,354.3
Perpetual-Discount 5.45 % 5.54 % 120,070 14.51 26 -0.0599 % 2,437.5
FixedReset 4.70 % 3.52 % 216,182 6.81 79 0.1006 % 2,508.7
Deemed-Retractible 5.06 % 2.40 % 155,611 0.18 42 0.0472 % 2,467.6
FloatingReset 2.57 % 2.58 % 195,613 7.09 5 0.0885 % 2,441.7
Performance Highlights
Issue Index Change Notes
ELF.PR.F Perpetual-Discount -1.06 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2044-03-19
Maturity Price : 23.15
Evaluated at bid price : 23.41
Bid-YTW : 5.75 %
MFC.PR.C Deemed-Retractible 1.11 % YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 21.80
Bid-YTW : 6.17 %
ELF.PR.G Perpetual-Discount 1.17 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2044-03-19
Maturity Price : 21.70
Evaluated at bid price : 21.70
Bid-YTW : 5.57 %
Volume Highlights
Issue Index Shares
Traded
Notes
BAM.PF.E FixedReset 137,177 Recent new issue.
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2044-03-19
Maturity Price : 22.91
Evaluated at bid price : 24.45
Bid-YTW : 4.23 %
TRP.PR.B FixedReset 98,918 RBC crossed two blocks of 10,000 each, both at 20.05. Nesbitt crossed 75,000 at 20.00.
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2044-03-19
Maturity Price : 19.98
Evaluated at bid price : 19.98
Bid-YTW : 3.67 %
RY.PR.W Perpetual-Discount 82,491 Nesbitt crossed 75,000 at 25.08.
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2044-03-19
Maturity Price : 24.84
Evaluated at bid price : 25.07
Bid-YTW : 4.92 %
MFC.PR.L FixedReset 73,842 Recent new issue.
YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 24.40
Bid-YTW : 4.15 %
RY.PR.Z FixedReset 60,588 RBC crossed 50,000 at 25.45.
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2044-03-19
Maturity Price : 23.29
Evaluated at bid price : 25.44
Bid-YTW : 3.66 %
SLF.PR.G FixedReset 57,200 RBC crossed 37,700 at 22.12.
YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 22.17
Bid-YTW : 4.48 %
There were 20 other index-included issues trading in excess of 10,000 shares.
Wide Spread Highlights
Issue Index Quote Data and Yield Notes
POW.PR.C Perpetual-Premium Quote: 25.46 – 25.72
Spot Rate : 0.2600
Average : 0.1452

YTW SCENARIO
Maturity Type : Call
Maturity Date : 2014-04-18
Maturity Price : 25.00
Evaluated at bid price : 25.46
Bid-YTW : -4.07 %

MFC.PR.K FixedReset Quote: 24.66 – 24.97
Spot Rate : 0.3100
Average : 0.1992

YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 24.66
Bid-YTW : 3.97 %

VNR.PR.A FixedReset Quote: 25.41 – 25.80
Spot Rate : 0.3900
Average : 0.2842

YTW SCENARIO
Maturity Type : Call
Maturity Date : 2017-10-15
Maturity Price : 25.00
Evaluated at bid price : 25.41
Bid-YTW : 4.11 %

ENB.PR.A Perpetual-Premium Quote: 25.33 – 25.56
Spot Rate : 0.2300
Average : 0.1523

YTW SCENARIO
Maturity Type : Call
Maturity Date : 2014-04-18
Maturity Price : 25.00
Evaluated at bid price : 25.33
Bid-YTW : -7.07 %

PWF.PR.K Perpetual-Discount Quote: 23.12 – 23.35
Spot Rate : 0.2300
Average : 0.1538

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2044-03-19
Maturity Price : 22.85
Evaluated at bid price : 23.12
Bid-YTW : 5.42 %

BAM.PR.B Floater Quote: 16.80 – 17.00
Spot Rate : 0.2000
Average : 0.1241

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2044-03-19
Maturity Price : 16.80
Evaluated at bid price : 16.80
Bid-YTW : 3.12 %

March 18, 2014

Wednesday, March 19th, 2014

Bloomberg’s Matt Levine writes a nice piece on Lloyds bank and regulatory par calls. Looks like a bit more of OSFI-style capital-markets-as-a-cooperative-game legitimate-expectations-of-security-holders garbage:

So Lloyds’s ECNs, like most capital securities, had an explicit regulatory par call, which provided that Lloyds could redeem them at par upon a “Capital Disqualification Event,” which would occur if they didn’t count as tier 2 capital or if they “cease to be taken into account ” by the U.K.’s Prudential Regulation Authority “for the purposes of any ‘stress test’ applied by the PRA in respect of the Consolidated Core Tier 1 Ratio.” And, earlier this year, that happened. (Maybe!)6

So Lloyds can just call them at par. Or, not quite; regulators would probably get mad if Lloyds just got rid of even not-so-good old-timey capital, and anyway that wouldn’t do anything to improve Lloyds’s capital position. Lloyds would have to sell new capital things — 7-percent trigger cocos, most efficiently, or I guess common stock but hahaha who issues common stock? — and use the proceeds to pay off the old ECNs at par.

Alternately Lloyds can buy the old ECNs for their current trading levels, which seem not to take into account the fact that they’re callable at par, which boggles me but is sort of par for the course.[Footnote]

[Footnote reads] Here is Tracy Alloway at FT Alphaville on Credit Suisse’s similarly callable, similarly above-par “Claudius” capital instruments. The link in the text is me making fun of the people buying Claudiuseses at above par, and judging by the reader e-mails I got from that linkwrap I suspect I’m not the only one who’s boggled.

I’ve sent Mr. Levine an eMail alerting him to the Canadian version of the mind-boggler.

The Parakeet has assured us that the lousy economy is not his boss’ fault – it’s those darn boomers again. Who would have thought they’d ever get old?:

We continue to believe that the world economy is healing, and that Canada will benefit in the form of stronger exports. From there, we expect to see more investment and new firm creation. This will permit the emergence of a natural, sustained growth trajectory for Canada, and a return of inflation to our 2 per cent target.

But the demographic forces that are in play suggest that the growth trajectory that we converge on after the recovery period will be slower than our historical trend, and it will also be associated with lower equilibrium rates of interest than we are used to. Fortunately, global policy-makers have the ability to redefine the limits to growth by removing growth impediments, but as business people and investors, we must keep those efforts in perspective.

The dollar dived, since boomers in the US remain youthful:

The loonie, as Canada’s dollar coin is known, was at 90.5 cents when the Bank of Canada posted the governor’s speech on its website, noted chief currency strategist Camilla Sutton of Bank of Nova Scotia.

Within a few minutes, it slipped to 90.2 cents. And by the time he had finished a question-and-answer session, during which he said he couldn’t rule out the possibility of an interest rate cut, the loonie was down to 89.75 cents.

It weakened further from there later in the day.

Spend-every-Penny is approaching his reward:

Yesterday, I informed the Prime Minister that I am resigning from Cabinet. This was a decision I made with my family earlier this year, as I will be returning to the private sector.

I suppose “private sector” means cushy job at a bank.

The touted replacement is probably too old to run for Conservative leadership:

Natural Resources Minister Joe Oliver will become the federal government’s new finance minister, replacing Jim Flaherty who announced his resignation earlier on Tuesday, CBC News has learned.

Oliver will be named finance minister on Wednesday in Ottawa.

Joe Oliver does not yet have an official PrefBlog nickname; he is best known from his days at the IDA, for giving money that should be regarded as public funds to a buddy’s start-up business; that money is all gone now, but what the hell – there’s more where that came from. The buddy was an ex-Executive Director of the OSC – by an amazing coincidence Oliver is also an ex-Executive director of the OSC.

It was a mixed day for the Canadian preferred share market, with PerpetualDiscounts down 5bp, FixedResets gaining 13bp and DeemedRetractibles off 2bp. Volatility was average, but uniformly positive. Volume was average.

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 -0.2984 % 2,432.0
FixedFloater 4.73 % 4.33 % 37,932 17.70 1 0.7018 % 3,588.8
Floater 2.99 % 3.09 % 52,363 19.52 4 -0.2984 % 2,625.9
OpRet 4.66 % -0.03 % 93,209 0.25 3 -0.0129 % 2,682.7
SplitShare 4.81 % 4.22 % 63,054 4.32 5 0.5112 % 3,080.7
Interest-Bearing 0.00 % 0.00 % 0 0.00 0 -0.0129 % 2,453.1
Perpetual-Premium 5.63 % -0.71 % 93,739 0.08 11 -0.1000 % 2,352.8
Perpetual-Discount 5.45 % 5.56 % 121,770 14.41 26 -0.0483 % 2,439.0
FixedReset 4.71 % 3.54 % 214,989 6.83 79 0.1295 % 2,506.2
Deemed-Retractible 5.06 % 2.15 % 157,139 0.19 42 -0.0231 % 2,466.4
FloatingReset 2.57 % 2.63 % 197,959 7.09 5 0.0966 % 2,439.6
Performance Highlights
Issue Index Change Notes
IFC.PR.A FixedReset 1.02 % YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 23.75
Bid-YTW : 4.22 %
BAM.PF.A FixedReset 1.03 % YTW SCENARIO
Maturity Type : Call
Maturity Date : 2018-09-30
Maturity Price : 25.00
Evaluated at bid price : 25.40
Bid-YTW : 4.09 %
BAM.PR.X FixedReset 1.05 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2044-03-18
Maturity Price : 21.18
Evaluated at bid price : 21.18
Bid-YTW : 4.25 %
CGI.PR.D SplitShare 1.14 % YTW SCENARIO
Maturity Type : Soft Maturity
Maturity Date : 2023-06-14
Maturity Price : 25.00
Evaluated at bid price : 24.85
Bid-YTW : 3.85 %
Volume Highlights
Issue Index Shares
Traded
Notes
BAM.PF.E FixedReset 308,110 Recent new issue.
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2044-03-18
Maturity Price : 22.89
Evaluated at bid price : 24.40
Bid-YTW : 4.24 %
SLF.PR.G FixedReset 111,900 Desjardins crossed 102,400 at 22.00.
YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 22.12
Bid-YTW : 4.51 %
TRP.PR.B FixedReset 103,916 RBC crossed two blocks of 50,000 each, both at 20.06.
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2044-03-18
Maturity Price : 19.95
Evaluated at bid price : 19.95
Bid-YTW : 3.68 %
TRP.PR.E FixedReset 68,915 Scotia crossed 25,000 at 25.12; RBC crossed 10,000 at 25.15.
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2044-03-18
Maturity Price : 23.17
Evaluated at bid price : 25.13
Bid-YTW : 3.92 %
ENB.PF.A FixedReset 65,788 Recent new issue.
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2044-03-18
Maturity Price : 23.12
Evaluated at bid price : 25.00
Bid-YTW : 4.18 %
BMO.PR.J Deemed-Retractible 65,022 RBC crossed 50,000 at 25.75.
YTW SCENARIO
Maturity Type : Call
Maturity Date : 2014-04-17
Maturity Price : 25.50
Evaluated at bid price : 25.73
Bid-YTW : -3.43 %
There were 36 other index-included issues trading in excess of 10,000 shares.
Wide Spread Highlights
Issue Index Quote Data and Yield Notes
GWO.PR.L Deemed-Retractible Quote: 25.35 – 25.68
Spot Rate : 0.3300
Average : 0.2093

YTW SCENARIO
Maturity Type : Call
Maturity Date : 2017-12-31
Maturity Price : 25.25
Evaluated at bid price : 25.35
Bid-YTW : 5.45 %

GWO.PR.M Deemed-Retractible Quote: 25.67 – 25.95
Spot Rate : 0.2800
Average : 0.1746

YTW SCENARIO
Maturity Type : Call
Maturity Date : 2018-03-31
Maturity Price : 25.25
Evaluated at bid price : 25.67
Bid-YTW : 5.25 %

CU.PR.G Perpetual-Discount Quote: 21.50 – 21.90
Spot Rate : 0.4000
Average : 0.2947

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2044-03-18
Maturity Price : 21.50
Evaluated at bid price : 21.50
Bid-YTW : 5.28 %

CU.PR.E Perpetual-Discount Quote: 23.23 – 23.57
Spot Rate : 0.3400
Average : 0.2435

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2044-03-18
Maturity Price : 22.93
Evaluated at bid price : 23.23
Bid-YTW : 5.31 %

BNA.PR.E SplitShare Quote: 25.50 – 25.86
Spot Rate : 0.3600
Average : 0.2695

YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2017-12-10
Maturity Price : 25.00
Evaluated at bid price : 25.50
Bid-YTW : 4.33 %

TD.PR.O Deemed-Retractible Quote: 25.42 – 25.65
Spot Rate : 0.2300
Average : 0.1414

YTW SCENARIO
Maturity Type : Call
Maturity Date : 2014-10-31
Maturity Price : 25.00
Evaluated at bid price : 25.42
Bid-YTW : 3.13 %

March 17, 2014

Monday, March 17th, 2014

The wonderful thing about trade is that it’s very difficult to go half-way:

The Ukrainian crisis is putting a strain on Russia’s $2 trillion economy, which grew 1.3 percent in 2013 after expanding 3.4 percent previous year.

Morgan Stanley (MS) economists Jacob Nell and Alina Slyusarchuk cut their forecast for 2014 growth to 0.8 percent from 2.5 percent according to a note to clients yesterday.

“We see Russia close to recession in the first half of 2014 as a result of the Ukrainian security crisis driving higher rates and risk premia, leading to weaker consumptions and contracting investment,” they wrote.

Capital outflow from Russia may reach $70 billion in the first quarter and there is “a real risk that this could push Russia into recession,” London-based Capital Economics said in a report published yesterday.

There hasn’t been any effect on China … yet. But it will come. Mind you, I don’t expect any road to Damascus conversion by Putin – but the consequences will have an effect on his choices.

It was a good day for the Canadian preferred share market, with PerpetualDiscounts winning 17bp, FixedResets up 5bp and DeemedRetractibles gaining 3bp. Volatility was minimal. Volume was extremely low … all the players were reading PrefLetter!

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 -0.1561 % 2,439.2
FixedFloater 4.76 % 4.37 % 37,775 17.65 1 0.0000 % 3,563.8
Floater 2.98 % 3.09 % 52,742 19.52 4 -0.1561 % 2,633.7
OpRet 4.66 % -0.03 % 86,325 0.21 3 -0.0129 % 2,683.1
SplitShare 4.83 % 4.39 % 61,716 4.32 5 0.0240 % 3,065.1
Interest-Bearing 0.00 % 0.00 % 0 0.00 0 -0.0129 % 2,453.4
Perpetual-Premium 5.62 % -0.06 % 93,210 0.08 11 0.1180 % 2,355.2
Perpetual-Discount 5.45 % 5.50 % 124,388 14.49 26 0.1667 % 2,440.1
FixedReset 4.72 % 3.58 % 217,184 6.83 79 0.0545 % 2,503.0
Deemed-Retractible 5.06 % 2.49 % 158,353 0.29 42 0.0289 % 2,467.0
FloatingReset 2.57 % 2.63 % 199,322 7.10 5 0.0161 % 2,437.2
Performance Highlights
Issue Index Change Notes
CU.PR.G Perpetual-Discount 1.21 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2044-03-17
Maturity Price : 21.38
Evaluated at bid price : 21.70
Bid-YTW : 5.21 %
Volume Highlights
Issue Index Shares
Traded
Notes
ENB.PF.A FixedReset 92,395 Recent new issue.
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2044-03-17
Maturity Price : 23.13
Evaluated at bid price : 25.03
Bid-YTW : 4.18 %
MFC.PR.L FixedReset 63,713 Recent new issue.
YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 24.38
Bid-YTW : 4.15 %
NA.PR.S FixedReset 54,214 RBC crossed 21,000 at 25.21.
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2044-03-17
Maturity Price : 23.22
Evaluated at bid price : 25.21
Bid-YTW : 3.88 %
ENB.PR.N FixedReset 49,167 Scotia crossed 40,000 at 24.45.
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2044-03-17
Maturity Price : 23.00
Evaluated at bid price : 24.50
Bid-YTW : 4.19 %
PWF.PR.G Perpetual-Premium 47,862 Nesbitt crossed 30,000 at 25.30.
YTW SCENARIO
Maturity Type : Call
Maturity Date : 2014-04-16
Maturity Price : 25.00
Evaluated at bid price : 25.30
Bid-YTW : -0.06 %
POW.PR.D Perpetual-Discount 28,569 RBC crossed 20,200 at 23.20.
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2044-03-17
Maturity Price : 22.87
Evaluated at bid price : 23.14
Bid-YTW : 5.49 %
There were 16 other index-included issues trading in excess of 10,000 shares.
Wide Spread Highlights
Issue Index Quote Data and Yield Notes
CGI.PR.D SplitShare Quote: 24.57 – 24.98
Spot Rate : 0.4100
Average : 0.2477

YTW SCENARIO
Maturity Type : Soft Maturity
Maturity Date : 2023-06-14
Maturity Price : 25.00
Evaluated at bid price : 24.57
Bid-YTW : 4.00 %

IAG.PR.F Deemed-Retractible Quote: 25.73 – 25.99
Spot Rate : 0.2600
Average : 0.1523

YTW SCENARIO
Maturity Type : Call
Maturity Date : 2018-03-31
Maturity Price : 25.25
Evaluated at bid price : 25.73
Bid-YTW : 5.28 %

ELF.PR.F Perpetual-Discount Quote: 23.51 – 23.94
Spot Rate : 0.4300
Average : 0.3267

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2044-03-17
Maturity Price : 23.21
Evaluated at bid price : 23.51
Bid-YTW : 5.72 %

CU.PR.F Perpetual-Discount Quote: 21.58 – 21.90
Spot Rate : 0.3200
Average : 0.2259

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2044-03-17
Maturity Price : 21.29
Evaluated at bid price : 21.58
Bid-YTW : 5.24 %

GWO.PR.Q Deemed-Retractible Quote: 23.95 – 24.24
Spot Rate : 0.2900
Average : 0.2048

YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 23.95
Bid-YTW : 5.68 %

ENB.PR.H FixedReset Quote: 23.20 – 23.43
Spot Rate : 0.2300
Average : 0.1470

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2044-03-17
Maturity Price : 22.42
Evaluated at bid price : 23.20
Bid-YTW : 4.03 %

March PrefLetter Released!

Monday, March 17th, 2014

The March, 2014, edition of PrefLetter has been released and is now available for purchase as the “Previous edition”. Those who subscribe for a full year receive the “Previous edition” as a bonus.

The regular appendices reporting on DeemedRetractibles and FixedResets are included.

PrefLetter may now be purchased by all Canadian residents.

Until further notice, the “Previous Edition” will refer to the March, 2014, issue, while the “Next Edition” will be the April, 2014, issue, scheduled to be prepared as of the close April 11 and eMailed to subscribers prior to market-opening on April 14.

PrefLetter is intended for long term investors seeking issues to buy-and-hold. At least one recommendation from each of the major preferred share sectors is included and discussed.

It appears that the server problems that have bedevilled the site recently have been solved … well, perhaps, not so much ‘solved’ as ‘worked around’. If you deserve a link but did not get a link, please let me know.

Note: My verbosity has grown by such leaps and bounds that it is no longer possible to deliver PrefLetter as an eMail attachment – it’s just too big for my software! Instead, I have sent passwords – click on the link in your eMail and your copy will download.

Note: The PrefLetter website has a Subscriber Download Feature. If you have not received your copy, try it!

Note: PrefLetter eMails sometimes runs afoul of spam filters. If you have not received your copy within fifteen minutes of a release notice such as this one, please double check your (company’s) spam filtering policy and your spam repository – there are some hints in the post Sympatico Spam Filters out of Control. If it’s not there, contact me and I’ll get you your copy … somehow!

Note: There have been scattered complaints regarding inability to open PrefLetter in Acrobat Reader, despite my practice of including myself on the subscription list and immediately checking the copy received. I have had the occasional difficulty reading US Government documents, which I was able to resolve by downloading and installing the latest version of Adobe Reader. Also, note that so far, all complaints have been from users of Yahoo Mail. Try saving it to disk first, before attempting to open it.

Note: There have been other scattered complaints that double-clicking on the links in the “PrefLetter Download” email results in a message that the password has already been used. I have been able to reproduce this problem in my own eMail software … the problem is double-clicking. What happens is the first click opens the link and the second click finds that the password has already been used and refuses to work properly. So the moral of the story is: Don’t be a dick! Single Click!

Note: Assiduous Reader DG informs me:

In case you have any other Apple users: you need to install a free App from the apple store called “FileApp”. It comes with it’s own tutorial and allows you to download and save a PDF file.