The Canadian preferred share market rocketted upward today, thrown into a tizzy by the Royal Bank’s LRCN issue discussed yesterday. Multiple dealers offered commentary opining that the existence of this option could decrease the volume of bank new issuance in the future and also held out the possibility that redemption of extant issues could be financed by this structure.
It is my understanding that the interest paid by the Special Purpose Vehicle (that owns the preferred shares and issues the AT1 60-year notes) is tax deductible to the bank, since, according to one dealer:
It is not clear to me how the tax benefits of the underlying preferred shares are recovered by the bank, it may be that the dividends simply disappear on consolidation.
S&P Global Ratings said today it assigned its ‘BBB’ issue-level rating to Royal Bank of Canada’s (RBC; AA-/Stable/A-1+) Canadian dollar-denominated additional Tier I structure limited recourse capital notes. Under this structure, a trust has been established where the bank is the sole beneficiary. Investors of the notes will have recourse only to the assets held by the trust. At the same time, S&P Global Ratings assigned its ‘BBB’ issue-level rating to the bank’s preferred shares, which will reside in the trust.
In accordance with our criteria for hybrid and other capital instruments, the rating reflects our analysis of the proposed instrument, and our assessment of RBC’s ‘a+’ stand-alone credit profile (SACP).
The ‘BBB’ issue rating is four notches below RBC’s SACP, incorporating:
- A deduction of one notch, the minimum downward notching from the SACP under our criteria for subordinated debt, reflecting contractual subordination;
- A deduction of two additional notches, reflecting that the coupon payments are fully cancellable, at the issuer’s discretion; and
- A deduction of an additional notch to reflect that this subordinated note features a (mandatory) contingent conversion (non-viability contingent capital [NVCC]) trigger. Should a trigger event occur (as defined by the Office of the Superintendent of Financial Institutions’ [OSFI] guideline for Capital Adequacy Requirements), each preferred share held in the limited recourse trust 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.
The following constitute trigger events:
- OSFI advises the bank that it is of the opinion that the bank has ceased, or is about to cease, to be viable and that, after the conversion of all contingent capital instruments and taking into account any other relevant factors, it is reasonably likely that the viability of the bank will be restored or maintained; or
- A federal or provincial government in Canada publicly announces that the bank has accepted or agreed to accept a capital injection, or equivalent support, from the government or a political subdivision or agent or agency without which the bank would have been determined by OSFI to be non-viable.
The notes are rated the same as RBC’s NVCC preferred shares, as we would expect the probability of default of the former to be similar to that of the latter. This is despite the notes ranking ahead of the bank’s preferred shares in an insolvency or wind-up–because this preference is only relevant to loss given default; our ratings focus chiefly on probability of default.
The cancellability of the notes’ coupons, without causing a default or wind-up of the bank, and with no material restriction, represents a degree of loss-absorption capacity. Although RBC has the option to redeem the notes after a certain period, we understand this period will be no less than five years after the date of issuance, and we see no structural incentive to redeem the notes at the first call date–implying a degree of longevity. This combination of features leads us to assess the equity content of these notes as intermediate (as defined in our criteria).
S&P Global Ratings’ ‘BBB’ rating on the bank’s preferred shares, which will reside with the trust, reflects the rating on the bank’s outstanding NVCC preferred shares in accordance with its criteria for hybrid and other capital instruments. Although the notching for this instrument is identical to that on the proposed notes, the distinguishing factors are the risk of regulatory intervention and the deferral risk over the life of the instrument.
To be frank, basing a rally of current proportions on the existence of this structure seems a little extreme to me. Cessation of supply of bank issues doesn’t seem to me, by itself, to be all that big a deal; I suspect that those who are driving the market up so substantially are taking the view that this structure will be used to fund the redemption of extant issues currently trading at around $20.
There are also very clear indications that this structure – or something very similar, that does not mention NVCC – will be accessible to insurance companies, so maybe you can justify this as well.
But what about all the other issuers that are also up substantially? Is this based on lack of bank supply too, on the grounds that a rising tide lifts all boats? Are speculators hypothesizing that if the banks are successful in creating a new market for deeply subordinated 60-year notes, then the other issuers will join in with great enthusiasm, with a resurgent exchange-traded COPrS market?
Or could it be that there has been all kinds of money sitting on the sidelines, aching to get back into the preferred share market and looking for a sign, any sign, that could serve as a trigger for a broad rally?
Performance Highlights |
Issue |
Index |
Change |
Notes |
BAM.PR.R |
FixedReset Disc |
-8.05 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 11.31
Evaluated at bid price : 11.31
Bid-YTW : 5.96 % |
IAF.PR.G |
FixedReset Ins Non |
-4.83 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 15.75
Evaluated at bid price : 15.75
Bid-YTW : 5.23 % |
PWF.PR.P |
FixedReset Disc |
-4.20 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 8.90
Evaluated at bid price : 8.90
Bid-YTW : 5.52 % |
MFC.PR.K |
FixedReset Ins Non |
-4.00 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 14.16
Evaluated at bid price : 14.16
Bid-YTW : 5.19 % |
SLF.PR.G |
FixedReset Ins Non |
-1.37 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 9.35
Evaluated at bid price : 9.35
Bid-YTW : 4.79 % |
GWO.PR.T |
Deemed-Retractible |
1.00 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 22.80
Evaluated at bid price : 23.14
Bid-YTW : 5.60 % |
GWO.PR.L |
Deemed-Retractible |
1.03 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 24.21
Evaluated at bid price : 24.50
Bid-YTW : 5.81 % |
CU.PR.F |
Perpetual-Discount |
1.06 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 21.87
Evaluated at bid price : 21.87
Bid-YTW : 5.22 % |
ELF.PR.G |
Perpetual-Discount |
1.07 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 21.42
Evaluated at bid price : 21.68
Bid-YTW : 5.50 % |
SLF.PR.E |
Deemed-Retractible |
1.08 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 21.26
Evaluated at bid price : 21.53
Bid-YTW : 5.26 % |
GWO.PR.H |
Deemed-Retractible |
1.12 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 21.39
Evaluated at bid price : 21.66
Bid-YTW : 5.64 % |
IAF.PR.B |
Deemed-Retractible |
1.12 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 21.33
Evaluated at bid price : 21.60
Bid-YTW : 5.36 % |
POW.PR.B |
Perpetual-Discount |
1.13 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 22.99
Evaluated at bid price : 23.26
Bid-YTW : 5.78 % |
CIU.PR.A |
Perpetual-Discount |
1.18 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 21.39
Evaluated at bid price : 21.39
Bid-YTW : 5.46 % |
GWO.PR.P |
Deemed-Retractible |
1.19 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 23.58
Evaluated at bid price : 23.85
Bid-YTW : 5.70 % |
POW.PR.A |
Perpetual-Discount |
1.19 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 24.34
Evaluated at bid price : 24.65
Bid-YTW : 5.70 % |
GWO.PR.G |
Deemed-Retractible |
1.22 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 23.01
Evaluated at bid price : 23.28
Bid-YTW : 5.62 % |
ELF.PR.F |
Perpetual-Discount |
1.23 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 22.80
Evaluated at bid price : 23.08
Bid-YTW : 5.76 % |
GWO.PR.Q |
Deemed-Retractible |
1.24 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 22.61
Evaluated at bid price : 22.86
Bid-YTW : 5.67 % |
RY.PR.P |
Perpetual-Premium |
1.26 % |
YTW SCENARIO
Maturity Type : Call
Maturity Date : 2025-02-24
Maturity Price : 25.00
Evaluated at bid price : 25.67
Bid-YTW : 4.81 % |
ELF.PR.H |
Perpetual-Discount |
1.27 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 23.72
Evaluated at bid price : 24.00
Bid-YTW : 5.75 % |
GWO.PR.R |
Deemed-Retractible |
1.27 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 21.55
Evaluated at bid price : 21.55
Bid-YTW : 5.62 % |
RY.PR.O |
Perpetual-Discount |
1.28 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 24.27
Evaluated at bid price : 24.56
Bid-YTW : 5.05 % |
PWF.PR.R |
Perpetual-Discount |
1.36 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 23.57
Evaluated at bid price : 23.85
Bid-YTW : 5.77 % |
CU.PR.E |
Perpetual-Discount |
1.38 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 23.18
Evaluated at bid price : 23.43
Bid-YTW : 5.29 % |
NA.PR.A |
FixedReset Disc |
1.43 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 24.56
Evaluated at bid price : 24.90
Bid-YTW : 5.03 % |
TD.PF.F |
Perpetual-Discount |
1.45 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 24.26
Evaluated at bid price : 24.55
Bid-YTW : 4.99 % |
POW.PR.G |
Perpetual-Discount |
1.47 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 23.92
Evaluated at bid price : 24.20
Bid-YTW : 5.81 % |
GWO.PR.S |
Deemed-Retractible |
1.47 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 23.22
Evaluated at bid price : 23.49
Bid-YTW : 5.63 % |
CU.PR.D |
Perpetual-Discount |
1.56 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 23.19
Evaluated at bid price : 23.44
Bid-YTW : 5.29 % |
W.PR.K |
FixedReset Disc |
1.60 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 24.12
Evaluated at bid price : 24.74
Bid-YTW : 5.31 % |
BNS.PR.H |
FixedReset Disc |
1.66 % |
YTW SCENARIO
Maturity Type : Call
Maturity Date : 2022-01-26
Maturity Price : 25.00
Evaluated at bid price : 25.11
Bid-YTW : 4.47 % |
W.PR.M |
FixedReset Disc |
1.67 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 23.80
Evaluated at bid price : 24.94
Bid-YTW : 5.18 % |
RY.PR.W |
Perpetual-Discount |
1.68 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 24.56
Evaluated at bid price : 24.81
Bid-YTW : 5.00 % |
GWO.PR.I |
Deemed-Retractible |
1.71 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 20.25
Evaluated at bid price : 20.25
Bid-YTW : 5.61 % |
BAM.PF.I |
FixedReset Disc |
1.73 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 23.71
Evaluated at bid price : 24.07
Bid-YTW : 5.01 % |
TRP.PR.K |
FixedReset Disc |
1.77 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 23.79
Evaluated at bid price : 24.12
Bid-YTW : 5.13 % |
CM.PR.Y |
FixedReset Disc |
1.83 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 22.82
Evaluated at bid price : 23.93
Bid-YTW : 4.36 % |
BAM.PF.H |
FixedReset Disc |
1.89 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 24.27
Evaluated at bid price : 24.86
Bid-YTW : 5.04 % |
BAM.PF.D |
Perpetual-Discount |
1.94 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 22.28
Evaluated at bid price : 22.61
Bid-YTW : 5.45 % |
IFC.PR.I |
Perpetual-Discount |
2.12 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 24.24
Evaluated at bid price : 24.62
Bid-YTW : 5.52 % |
BIP.PR.C |
FixedReset Disc |
2.25 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 23.17
Evaluated at bid price : 23.67
Bid-YTW : 5.68 % |
BAM.PF.J |
FixedReset Disc |
2.25 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 22.87
Evaluated at bid price : 23.62
Bid-YTW : 5.03 % |
TD.PF.H |
FixedReset Disc |
2.28 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 23.84
Evaluated at bid price : 25.09
Bid-YTW : 4.41 % |
SLF.PR.B |
Deemed-Retractible |
2.30 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 22.84
Evaluated at bid price : 23.12
Bid-YTW : 5.22 % |
BIP.PR.D |
FixedReset Disc |
2.36 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 21.40
Evaluated at bid price : 21.72
Bid-YTW : 5.79 % |
MFC.PR.B |
Deemed-Retractible |
2.46 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 21.84
Evaluated at bid price : 22.08
Bid-YTW : 5.31 % |
BIP.PR.B |
FixedReset Disc |
2.55 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 23.80
Evaluated at bid price : 24.52
Bid-YTW : 5.62 % |
EML.PR.A |
FixedReset Ins Non |
2.55 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 24.49
Evaluated at bid price : 24.92
Bid-YTW : 5.38 % |
IFC.PR.E |
Deemed-Retractible |
2.57 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 23.55
Evaluated at bid price : 23.96
Bid-YTW : 5.46 % |
BIP.PR.E |
FixedReset Disc |
2.69 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 20.96
Evaluated at bid price : 20.96
Bid-YTW : 6.03 % |
TRP.PR.J |
FixedReset Disc |
2.70 % |
YTW SCENARIO
Maturity Type : Call
Maturity Date : 2021-05-31
Maturity Price : 25.00
Evaluated at bid price : 25.49
Bid-YTW : 4.03 % |
IFC.PR.F |
Deemed-Retractible |
2.72 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 23.79
Evaluated at bid price : 24.20
Bid-YTW : 5.51 % |
BAM.PF.C |
Perpetual-Discount |
2.85 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 22.05
Evaluated at bid price : 22.05
Bid-YTW : 5.55 % |
BAM.PR.N |
Perpetual-Discount |
3.00 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 21.37
Evaluated at bid price : 21.64
Bid-YTW : 5.52 % |
BAM.PR.M |
Perpetual-Discount |
3.04 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 21.44
Evaluated at bid price : 21.70
Bid-YTW : 5.51 % |
TRP.PR.B |
FixedReset Disc |
3.09 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 8.33
Evaluated at bid price : 8.33
Bid-YTW : 4.99 % |
CU.PR.I |
FixedReset Disc |
3.18 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 24.37
Evaluated at bid price : 24.97
Bid-YTW : 4.53 % |
MFC.PR.C |
Deemed-Retractible |
3.18 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 21.46
Evaluated at bid price : 21.72
Bid-YTW : 5.22 % |
TRP.PR.C |
FixedReset Disc |
3.19 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 9.05
Evaluated at bid price : 9.05
Bid-YTW : 5.26 % |
BIP.PR.F |
FixedReset Disc |
3.44 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 21.34
Evaluated at bid price : 21.34
Bid-YTW : 6.04 % |
TD.PF.M |
FixedReset Disc |
4.08 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 22.96
Evaluated at bid price : 24.25
Bid-YTW : 4.21 % |
BAM.PR.Z |
FixedReset Disc |
4.11 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 16.22
Evaluated at bid price : 16.22
Bid-YTW : 5.49 % |
TD.PF.L |
FixedReset Disc |
4.18 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 22.15
Evaluated at bid price : 22.66
Bid-YTW : 4.31 % |
BAM.PR.B |
Floater |
4.29 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 8.03
Evaluated at bid price : 8.03
Bid-YTW : 5.39 % |
BAM.PR.K |
Floater |
4.33 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 7.95
Evaluated at bid price : 7.95
Bid-YTW : 5.44 % |
BAM.PR.C |
Floater |
4.55 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 8.05
Evaluated at bid price : 8.05
Bid-YTW : 5.37 % |
TRP.PR.F |
FloatingReset |
4.57 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 10.30
Evaluated at bid price : 10.30
Bid-YTW : 5.14 % |
NA.PR.C |
FixedReset Disc |
4.59 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 21.18
Evaluated at bid price : 21.18
Bid-YTW : 4.56 % |
BMO.PR.F |
FixedReset Disc |
4.68 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 23.04
Evaluated at bid price : 24.39
Bid-YTW : 4.18 % |
BIP.PR.A |
FixedReset Disc |
4.73 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 15.71
Evaluated at bid price : 15.71
Bid-YTW : 6.32 % |
GWO.PR.N |
FixedReset Ins Non |
4.98 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 9.70
Evaluated at bid price : 9.70
Bid-YTW : 4.33 % |
BAM.PF.A |
FixedReset Disc |
5.00 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 16.80
Evaluated at bid price : 16.80
Bid-YTW : 5.39 % |
BAM.PF.F |
FixedReset Disc |
5.02 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 16.11
Evaluated at bid price : 16.11
Bid-YTW : 5.34 % |
SLF.PR.I |
FixedReset Ins Non |
5.15 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 17.56
Evaluated at bid price : 17.56
Bid-YTW : 4.51 % |
CM.PR.Q |
FixedReset Disc |
5.25 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 17.05
Evaluated at bid price : 17.05
Bid-YTW : 4.62 % |
BNS.PR.I |
FixedReset Disc |
5.31 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 19.05
Evaluated at bid price : 19.05
Bid-YTW : 4.15 % |
RY.PR.H |
FixedReset Disc |
5.33 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 17.18
Evaluated at bid price : 17.18
Bid-YTW : 4.18 % |
TRP.PR.A |
FixedReset Disc |
5.35 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 12.21
Evaluated at bid price : 12.21
Bid-YTW : 5.36 % |
RY.PR.S |
FixedReset Disc |
5.50 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 18.80
Evaluated at bid price : 18.80
Bid-YTW : 4.22 % |
CM.PR.S |
FixedReset Disc |
5.59 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 17.39
Evaluated at bid price : 17.39
Bid-YTW : 4.39 % |
BAM.PF.B |
FixedReset Disc |
5.76 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 15.43
Evaluated at bid price : 15.43
Bid-YTW : 5.42 % |
TRP.PR.E |
FixedReset Disc |
5.84 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 13.77
Evaluated at bid price : 13.77
Bid-YTW : 5.39 % |
TD.PF.D |
FixedReset Disc |
5.89 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 18.35
Evaluated at bid price : 18.35
Bid-YTW : 4.29 % |
NA.PR.G |
FixedReset Disc |
6.17 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 19.28
Evaluated at bid price : 19.28
Bid-YTW : 4.46 % |
CM.PR.O |
FixedReset Disc |
6.18 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 15.80
Evaluated at bid price : 15.80
Bid-YTW : 4.61 % |
BMO.PR.T |
FixedReset Disc |
6.31 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 16.50
Evaluated at bid price : 16.50
Bid-YTW : 4.33 % |
RY.PR.Z |
FixedReset Disc |
6.42 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 16.90
Evaluated at bid price : 16.90
Bid-YTW : 4.19 % |
BMO.PR.D |
FixedReset Disc |
6.50 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 21.30
Evaluated at bid price : 21.30
Bid-YTW : 4.31 % |
PWF.PR.T |
FixedReset Disc |
6.53 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 16.16
Evaluated at bid price : 16.16
Bid-YTW : 4.66 % |
BMO.PR.E |
FixedReset Disc |
6.65 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 19.57
Evaluated at bid price : 19.57
Bid-YTW : 4.35 % |
CM.PR.T |
FixedReset Disc |
6.70 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 21.91
Evaluated at bid price : 22.30
Bid-YTW : 4.43 % |
BAM.PF.G |
FixedReset Disc |
6.90 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 15.19
Evaluated at bid price : 15.19
Bid-YTW : 5.33 % |
TRP.PR.D |
FixedReset Disc |
6.92 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 13.90
Evaluated at bid price : 13.90
Bid-YTW : 5.39 % |
TD.PF.E |
FixedReset Disc |
7.00 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 18.65
Evaluated at bid price : 18.65
Bid-YTW : 4.33 % |
TD.PF.C |
FixedReset Disc |
7.25 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 16.86
Evaluated at bid price : 16.86
Bid-YTW : 4.31 % |
TD.PF.A |
FixedReset Disc |
7.27 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 16.83
Evaluated at bid price : 16.83
Bid-YTW : 4.21 % |
BMO.PR.C |
FixedReset Disc |
7.29 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 22.22
Evaluated at bid price : 22.53
Bid-YTW : 4.21 % |
IFC.PR.G |
FixedReset Ins Non |
7.33 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 17.43
Evaluated at bid price : 17.43
Bid-YTW : 4.66 % |
SLF.PR.J |
FloatingReset |
7.34 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 9.50
Evaluated at bid price : 9.50
Bid-YTW : 4.21 % |
CM.PR.R |
FixedReset Disc |
7.35 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 21.47
Evaluated at bid price : 21.47
Bid-YTW : 4.45 % |
TD.PF.B |
FixedReset Disc |
7.42 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 16.80
Evaluated at bid price : 16.80
Bid-YTW : 4.24 % |
NA.PR.S |
FixedReset Disc |
7.55 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 16.80
Evaluated at bid price : 16.80
Bid-YTW : 4.47 % |
NA.PR.E |
FixedReset Disc |
7.66 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 17.98
Evaluated at bid price : 17.98
Bid-YTW : 4.41 % |
BAM.PR.T |
FixedReset Disc |
7.74 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 13.23
Evaluated at bid price : 13.23
Bid-YTW : 5.24 % |
BAM.PF.E |
FixedReset Disc |
7.75 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 14.87
Evaluated at bid price : 14.87
Bid-YTW : 5.23 % |
TD.PF.K |
FixedReset Disc |
7.81 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 19.06
Evaluated at bid price : 19.06
Bid-YTW : 4.27 % |
TD.PF.J |
FixedReset Disc |
8.03 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 19.50
Evaluated at bid price : 19.50
Bid-YTW : 4.22 % |
CM.PR.P |
FixedReset Disc |
8.21 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 16.47
Evaluated at bid price : 16.47
Bid-YTW : 4.44 % |
CU.PR.C |
FixedReset Disc |
8.30 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 15.92
Evaluated at bid price : 15.92
Bid-YTW : 4.48 % |
BMO.PR.S |
FixedReset Disc |
8.34 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 17.02
Evaluated at bid price : 17.02
Bid-YTW : 4.35 % |
IFC.PR.A |
FixedReset Ins Non |
8.59 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 12.51
Evaluated at bid price : 12.51
Bid-YTW : 4.56 % |
BAM.PR.X |
FixedReset Disc |
8.91 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 10.76
Evaluated at bid price : 10.76
Bid-YTW : 5.19 % |
IFC.PR.C |
FixedReset Ins Non |
9.10 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 16.30
Evaluated at bid price : 16.30
Bid-YTW : 4.69 % |
NA.PR.W |
FixedReset Disc |
9.19 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 16.27
Evaluated at bid price : 16.27
Bid-YTW : 4.45 % |
MFC.PR.R |
FixedReset Ins Non |
9.44 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 23.38
Evaluated at bid price : 23.77
Bid-YTW : 4.48 % |
MFC.PR.J |
FixedReset Ins Non |
9.44 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 17.85
Evaluated at bid price : 17.85
Bid-YTW : 4.55 % |
MFC.PR.N |
FixedReset Ins Non |
9.44 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 16.34
Evaluated at bid price : 16.34
Bid-YTW : 4.49 % |
MFC.PR.Q |
FixedReset Ins Non |
9.73 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 18.04
Evaluated at bid price : 18.04
Bid-YTW : 4.45 % |
RY.PR.M |
FixedReset Disc |
9.94 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 18.25
Evaluated at bid price : 18.25
Bid-YTW : 4.14 % |
IAF.PR.I |
FixedReset Ins Non |
10.03 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 19.42
Evaluated at bid price : 19.42
Bid-YTW : 4.36 % |
BMO.PR.Y |
FixedReset Disc |
10.13 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 18.27
Evaluated at bid price : 18.27
Bid-YTW : 4.25 % |
TRP.PR.G |
FixedReset Disc |
10.14 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 15.42
Evaluated at bid price : 15.42
Bid-YTW : 5.46 % |
TD.PF.I |
FixedReset Disc |
10.18 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 21.11
Evaluated at bid price : 21.11
Bid-YTW : 4.15 % |
MFC.PR.H |
FixedReset Ins Non |
10.34 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 19.75
Evaluated at bid price : 19.75
Bid-YTW : 4.54 % |
MFC.PR.L |
FixedReset Ins Non |
10.67 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 15.46
Evaluated at bid price : 15.46
Bid-YTW : 4.54 % |
MFC.PR.M |
FixedReset Ins Non |
10.83 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 16.79
Evaluated at bid price : 16.79
Bid-YTW : 4.46 % |
MFC.PR.I |
FixedReset Ins Non |
10.85 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 18.90
Evaluated at bid price : 18.90
Bid-YTW : 4.47 % |
BMO.PR.W |
FixedReset Disc |
11.08 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 16.94
Evaluated at bid price : 16.94
Bid-YTW : 4.29 % |
MFC.PR.G |
FixedReset Ins Non |
11.69 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 18.34
Evaluated at bid price : 18.34
Bid-YTW : 4.54 % |
MFC.PR.F |
FixedReset Ins Non |
11.92 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 10.33
Evaluated at bid price : 10.33
Bid-YTW : 4.35 % |
SLF.PR.H |
FixedReset Ins Non |
14.90 % |
YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-07-16
Maturity Price : 14.50
Evaluated at bid price : 14.50
Bid-YTW : 4.41 % |
DC.PR.B : Dutch Auction Issuer Bid
Wednesday, July 22nd, 2020Dundee Corporation has announced:
DC.PR.B closed at 17.75 today, near the top of the range for the offer and up 9.16% on the day.
There was a very long thread of comments about Dundee and its preferreds on an unrelated thread in mid-May, 2020.
I find it fascinating that they are leaving the issue’s FloatingReset counterparts, DC.PR.D, out of the offer. The dividend on DC.PR.D is a little more than that of DC.PR.B at the moment ($0.35777 vs. $0.33025 as of June 4, according to their recent dividend announcement) although I confess I don’t quite see how that works, given that the five-year Canada yield was well above 1% at the end of August, 2019, when the reset rate was calculated. Regardless, I would have thought that the additional offerings they would get by taking the DC.PR.D on equal terms (or maybe at some discount) with DC.PR.B would lower the total price sufficiently to outweigh any such short-term concerns.
Update2020-7-24: Regarding the dividend rate on DC.PR.D … the quarterly period ending June 30 commenced on the last day of March, 2020, and the rate was calculated 30 days prior to this. The Bank of Canada reports a 3-Month T-Bill yield of 1.61% on February 26, and 1.14% on March 4, 2020, before dropping even further, so the dividend quoted for the Series 3, DC.PR.D, is not unreasonable. The next one will be a lot lower!
DC.PR.B is a FixedReset, 5.688%+410, that commenced trading 2009-9-15 with a 6.75% coupon after being announced 2009-8-25. It reset to 5.688% effective 2014-09-30. I made no recommendation regarding conversion. Now, DC.PR.B will reset at 5.284% effective September 30, 2019. I recommended retaining, or converting to, DC.PR.B. Instead, there was a small net conversion to DC.PR.D leaving DC.PR.B with about 61% of the total. The issue is tracked by HIMIPref™ but is relegated to the Scraps – FixedReset (Discount) subindex on credit concerns.
DC.PR.D is a FloatingReset, +410, that came into existence via a partial conversion from DC.PR.B. It is tracked by HIMIPref™ but relegated to the Scraps – FloatingReset subindex on credit concerns.
Posted in Issue Comments | 6 Comments »