So guess who’s financing your mortgage!
Canadian Imperial Bank of Commerce has become Canada’s first bank to benefit from Europe’s rush to debt with subzero yields.
CIBC sold €1.25-billion ($1.79-billion) worth of six-year covered bonds – with a yield of negative-0.009 per cent – on Monday. According to a person familiar with the transaction, investor demand was so strong that the value of orders roughly doubled the deal size.
Not only is CIBC the first Canadian bank to issue such debt at a negative rate, it is also the first non-European bank to do so. In March, Germany’s Berlin Hype was the first lender to borrow at negative rates, cashing in on a hunger for quality debt, coupled with Europe’s unique fixed-income markets.
At the start of this month, nearly $12-trillion (U.S.) worth of government debt carried negative yields. As CIBC’s latest foray into the market highlights, the phenomenon is now spreading to other types of bonds, as investors search for securities that pay at least a tiny yield – or cost less to own than sovereign bonds.
Update: Here is a link to a brief explanation of Covered Bonds
Wal-Mart is continuing its battle with Visa:
Wal-Mart Stores Inc. can no longer count Marlene Gosparini and her employer as regular customers in Thunder Bay after the world’s largest retailer stopped accepting Visa Inc. credit cards at its three stores in the Canadian city.
…
Wal-Mart prepared its Thunder Bay customers for the change in June when it posted a statement on its website. There were signs in stores leading up to the shift, and on Monday store greeters, employees and managers approached customers as they walked in to remind them of the change. Some cashiers even offered customers a chance to sign up for a Wal-Mart Mastercard.
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Visa ran ads in Thunder Bay’s newspaper Monday offering cardholders a C$25 online gift card for making purchases of C$75 or more at Thunder Bay grocery stores.
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Wal-Mart’s Canada unit, which pays more than C$100 million to accept credit cards annually, called the fees Visa charges “unacceptably high” in a June 11 statement on its website.
HIMIPref™ Preferred Indices These values reflect the December 2008 revision of the HIMIPref™ Indices Values are provisional and are finalized monthly |
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Index | Mean Current Yield (at bid) |
Median YTW |
Median Average Trading Value |
Median Mod Dur (YTW) |
Issues | Day’s Perf. | Index Value |
Ratchet | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.3973 % | 1,672.2 |
FixedFloater | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.3973 % | 3,054.8 |
Floater | 4.91 % | 4.66 % | 91,277 | 16.14 | 4 | 0.3973 % | 1,760.5 |
OpRet | 4.84 % | -0.49 % | 42,239 | 0.12 | 1 | 0.0791 % | 2,850.4 |
SplitShare | 5.12 % | 5.52 % | 98,621 | 2.32 | 5 | 0.0000 % | 3,364.4 |
Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.0000 % | 2,625.1 |
Perpetual-Premium | 5.49 % | -12.31 % | 82,363 | 0.09 | 12 | -0.0552 % | 2,677.0 |
Perpetual-Discount | 5.26 % | 5.27 % | 101,498 | 15.02 | 26 | 0.0763 % | 2,813.7 |
FixedReset | 5.07 % | 4.39 % | 149,974 | 7.17 | 88 | 0.0827 % | 2,000.9 |
Deemed-Retractible | 5.03 % | 4.62 % | 125,656 | 3.33 | 33 | -0.1412 % | 2,752.1 |
FloatingReset | 2.94 % | 4.69 % | 32,774 | 5.15 | 11 | -0.0447 % | 2,116.1 |
Performance Highlights | |||
Issue | Index | Change | Notes |
MFC.PR.K | FixedReset | -1.99 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 17.27 Bid-YTW : 8.37 % |
MFC.PR.N | FixedReset | -1.24 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 18.37 Bid-YTW : 7.75 % |
MFC.PR.M | FixedReset | -1.23 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 18.42 Bid-YTW : 7.78 % |
SLF.PR.J | FloatingReset | -1.21 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 12.25 Bid-YTW : 11.42 % |
MFC.PR.L | FixedReset | -1.21 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 17.98 Bid-YTW : 7.91 % |
HSE.PR.E | FixedReset | -1.18 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2046-07-18 Maturity Price : 19.25 Evaluated at bid price : 19.25 Bid-YTW : 5.62 % |
FTS.PR.H | FixedReset | -1.08 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2046-07-18 Maturity Price : 13.80 Evaluated at bid price : 13.80 Bid-YTW : 4.00 % |
IAG.PR.A | Deemed-Retractible | -1.06 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 22.31 Bid-YTW : 6.32 % |
VNR.PR.A | FixedReset | -1.06 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2046-07-18 Maturity Price : 17.70 Evaluated at bid price : 17.70 Bid-YTW : 5.00 % |
GWO.PR.I | Deemed-Retractible | -1.02 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 22.28 Bid-YTW : 6.23 % |
GWO.PR.N | FixedReset | 1.05 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 14.40 Bid-YTW : 9.49 % |
TRP.PR.B | FixedReset | 1.21 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2046-07-18 Maturity Price : 11.71 Evaluated at bid price : 11.71 Bid-YTW : 4.25 % |
HSE.PR.A | FixedReset | 1.23 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2046-07-18 Maturity Price : 11.54 Evaluated at bid price : 11.54 Bid-YTW : 5.22 % |
BNS.PR.R | FixedReset | 1.32 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 23.88 Bid-YTW : 4.05 % |
SLF.PR.H | FixedReset | 1.80 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 16.44 Bid-YTW : 8.63 % |
Volume Highlights | |||
Issue | Index | Shares Traded |
Notes |
FTS.PR.J | Perpetual-Discount | 132,750 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2046-07-18 Maturity Price : 23.11 Evaluated at bid price : 23.52 Bid-YTW : 5.10 % |
TRP.PR.J | FixedReset | 116,945 | YTW SCENARIO Maturity Type : Call Maturity Date : 2021-05-31 Maturity Price : 25.00 Evaluated at bid price : 26.20 Bid-YTW : 4.59 % |
BAM.PF.E | FixedReset | 74,000 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2046-07-18 Maturity Price : 18.76 Evaluated at bid price : 18.76 Bid-YTW : 4.64 % |
BNS.PR.A | FloatingReset | 72,500 | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 23.05 Bid-YTW : 3.99 % |
PWF.PR.O | Perpetual-Premium | 58,897 | YTW SCENARIO Maturity Type : Call Maturity Date : 2016-10-31 Maturity Price : 25.50 Evaluated at bid price : 25.75 Bid-YTW : 1.56 % |
FTS.PR.K | FixedReset | 46,145 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2046-07-18 Maturity Price : 17.91 Evaluated at bid price : 17.91 Bid-YTW : 4.07 % |
There were 23 other index-included issues trading in excess of 10,000 shares. |
Wide Spread Highlights | ||
Issue | Index | Quote Data and Yield Notes |
SLF.PR.J | FloatingReset | Quote: 12.25 – 12.76 Spot Rate : 0.5100 Average : 0.3143 YTW SCENARIO |
HSE.PR.A | FixedReset | Quote: 11.54 – 11.97 Spot Rate : 0.4300 Average : 0.2887 YTW SCENARIO |
FTS.PR.J | Perpetual-Discount | Quote: 23.52 – 23.85 Spot Rate : 0.3300 Average : 0.2357 YTW SCENARIO |
SLF.PR.I | FixedReset | Quote: 18.28 – 18.62 Spot Rate : 0.3400 Average : 0.2617 YTW SCENARIO |
CM.PR.Q | FixedReset | Quote: 19.95 – 20.28 Spot Rate : 0.3300 Average : 0.2546 YTW SCENARIO |
TRP.PR.C | FixedReset | Quote: 12.50 – 12.79 Spot Rate : 0.2900 Average : 0.2147 YTW SCENARIO |