Credit ratings may be politicized:
The Senate in a 64-35 vote today approved an amendment to the financial overhaul legislation that would create a ratings board overseen by the Securities and Exchange Commission. The panel would assign a credit-rating company to rank an offering.
…
Under Franken’s amendment, the SEC would determine the size of the board. The majority of members would be investors, at least one member would be from a credit-rating company and at least one member would be from an investment bank.The board would conduct an annual assessment of each credit-rating company to scrutinize the firm’s accuracy in grading debt compared with competitors, according to the amendment. While credit-rating companies would set fees, the SEC would have authority to make sure payments are “reasonable.”
For the proposal to form a credit-rating board to become binding, lawmakers would have to approve the broader financial reform measure and President Barack Obama would have to sign the legislation.
Not quite as bad as the EU’s plan to create a government-run agency that won’t be so mean to poor old Greece, but close!
The Canadian preferred share market was quieter today, with PerpetualDiscounts gaining 4bp and FixedResets losing 1bp. Volume was down to levels only slightly above normal – whatever normal means! – but the day was enlivened by the announcement of a Sun Life Financial FixedReset, 4.35%+141, to settle May 25.
| 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 | 2.62 % | 2.77 % | 44,471 | 20.87 | 1 | 0.0000 % | 2,112.6 |
| FixedFloater | 5.12 % | 3.18 % | 40,563 | 20.12 | 1 | -0.5621 % | 3,124.6 |
| Floater | 2.11 % | 2.40 % | 102,084 | 21.30 | 3 | -0.3568 % | 2,296.8 |
| OpRet | 4.90 % | 3.85 % | 90,744 | 1.76 | 11 | 0.3170 % | 2,303.7 |
| SplitShare | 6.44 % | 6.44 % | 124,665 | 3.53 | 2 | 0.3341 % | 2,120.1 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.3170 % | 2,106.6 |
| Perpetual-Premium | 5.53 % | 4.77 % | 24,342 | 15.82 | 1 | 0.0000 % | 1,824.2 |
| Perpetual-Discount | 6.32 % | 6.39 % | 213,425 | 13.34 | 77 | 0.0370 % | 1,691.9 |
| FixedReset | 5.51 % | 4.30 % | 516,152 | 3.58 | 44 | -0.0112 % | 2,149.2 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| HSB.PR.C | Perpetual-Discount | -1.71 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2040-05-13 Maturity Price : 19.51 Evaluated at bid price : 19.51 Bid-YTW : 6.65 % |
| PWF.PR.O | Perpetual-Discount | -1.10 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2040-05-13 Maturity Price : 22.39 Evaluated at bid price : 22.50 Bid-YTW : 6.51 % |
| ENB.PR.A | Perpetual-Discount | -1.08 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2040-05-13 Maturity Price : 23.49 Evaluated at bid price : 23.76 Bid-YTW : 5.79 % |
| HSB.PR.D | Perpetual-Discount | -1.03 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2040-05-13 Maturity Price : 19.30 Evaluated at bid price : 19.30 Bid-YTW : 6.59 % |
| TD.PR.M | OpRet | 1.09 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2010-06-12 Maturity Price : 25.75 Evaluated at bid price : 25.88 Bid-YTW : 0.39 % |
| ELF.PR.F | Perpetual-Discount | 1.19 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2040-05-13 Maturity Price : 18.75 Evaluated at bid price : 18.75 Bid-YTW : 7.17 % |
| CIU.PR.A | Perpetual-Discount | 2.18 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2040-05-13 Maturity Price : 18.75 Evaluated at bid price : 18.75 Bid-YTW : 6.16 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| PWF.PR.M | FixedReset | 140,000 | RBC crossed blocks of 25,000 shares, 24,500 and 50,000, all at 26.50. Nesbitt crossed 25,000 at the same price and bought 10,000 from National at 26.45. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-03-02 Maturity Price : 25.00 Evaluated at bid price : 26.50 Bid-YTW : 4.36 % |
| TRP.PR.B | FixedReset | 119,175 | RBC crossed blocks of 25,000 shares, 40,000 and another 25,000, all at 24.65. RBC bought 13,000 from TD at the same price. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2040-05-13 Maturity Price : 24.71 Evaluated at bid price : 24.76 Bid-YTW : 4.09 % |
| PWF.PR.K | Perpetual-Discount | 42,070 | Desjardins sold 36,000 to anonymous at 19.10. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2040-05-13 Maturity Price : 18.80 Evaluated at bid price : 18.80 Bid-YTW : 6.66 % |
| BNS.PR.Y | FixedReset | 41,280 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2040-05-13 Maturity Price : 24.01 Evaluated at bid price : 24.05 Bid-YTW : 3.93 % |
| BNS.PR.R | FixedReset | 34,345 | National crossed 25,000 at 25.49. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-02-25 Maturity Price : 25.00 Evaluated at bid price : 25.50 Bid-YTW : 4.48 % |
| CM.PR.H | Perpetual-Discount | 33,043 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2040-05-13 Maturity Price : 18.85 Evaluated at bid price : 18.85 Bid-YTW : 6.43 % |
| There were 34 other index-included issues trading in excess of 10,000 shares. | |||