How ’bout them Greek swaps, eh?:
Credit-default swaps on Greece rose 38 basis points to an all-time high of 970 basis points, according to CMA DataVision. Contracts on Portuguese government securities climbed 16 basis points to a two-week high of 336.5, while Spain rose 4 to 269.
The politicians have come up with a solution of how to solve their GSE mess: make the banks pay:
Bank executives were panicking last night over a proposed fix to Title II of financial reform literally penciled in at the last minute. The fear is that that the proposed change to the orderly liquidation authority could leave banks on the hook for a possible wind-down of Fannie Mae and Freddie Mac that could cost as much as $400 billion. In the House counter-offer below, Fannie and Freddie are penciled in as falling under the definition of ‘financial company,’ meaning they could be resolved by the orderly liquidation process. This process is paid for by the sale of the failing company’s assets and/or through assessments on other financial companies, possibly putting the Street in line to pay for the liquidation of the troubled housing giants.
Competition between Treasury and the FDIC to deal with private equity purchasers of banks was mentioned on April 30. That trend is continuing:
Buyout firms thwarted by regulators from taking over failed banks have found a solution: Acquire lenders that are still in business.
Moelis Capital Partners LLC, Thomas H. Lee Partners LP and the Carlyle Group are among firms that agreed to buy stakes in at least five U.S. banks since April. While most are small, with assets of less than $1 billion, their status as banks means they can buy more distressed lenders that can be merged and sold later — a tactic that made some private-equity investors billionaires in the 1990s.
…
In at least three cases, the shift in tactics requires approval from the Treasury, which owns stakes in small banks through its injection of U.S. bailout funds. Capital infusions for Pacific Capital, Hampton Roads and Sterling are all contingent on the government writing down its investment.
The Canadian preferred share market continued to move ahead on lower than average volume today, with PerpetualDiscounts and FixedResets both gaining 7bp.
| 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 | 2.72 % | 2.79 % | 31,245 | 20.49 | 1 | 0.0000 % | 2,097.6 |
| FixedFloater | 5.12 % | 3.27 % | 21,669 | 19.86 | 1 | 0.4726 % | 3,129.0 |
| Floater | 2.40 % | 2.80 % | 78,917 | 20.24 | 3 | 0.7369 % | 2,260.5 |
| OpRet | 4.86 % | 2.47 % | 88,391 | 0.43 | 11 | 0.1938 % | 2,342.0 |
| SplitShare | 6.32 % | 6.21 % | 95,256 | 3.49 | 2 | -0.2173 % | 2,195.5 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.1938 % | 2,141.5 |
| Perpetual-Premium | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.0739 % | 1,912.4 |
| Perpetual-Discount | 5.94 % | 6.02 % | 196,472 | 13.92 | 77 | 0.0739 % | 1,810.2 |
| FixedReset | 5.42 % | 4.03 % | 327,124 | 3.47 | 45 | 0.0722 % | 2,183.6 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| GWO.PR.M | Perpetual-Discount | -1.48 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2040-06-24 Maturity Price : 23.85 Evaluated at bid price : 24.04 Bid-YTW : 6.06 % |
| TD.PR.C | FixedReset | -1.01 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2014-03-02 Maturity Price : 25.00 Evaluated at bid price : 26.53 Bid-YTW : 4.07 % |
| CM.PR.L | FixedReset | 1.04 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2014-05-30 Maturity Price : 25.00 Evaluated at bid price : 27.40 Bid-YTW : 3.74 % |
| TRI.PR.B | Floater | 1.51 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2040-06-24 Maturity Price : 23.20 Evaluated at bid price : 23.50 Bid-YTW : 1.82 % |
| POW.PR.A | Perpetual-Discount | 1.53 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2040-06-24 Maturity Price : 23.03 Evaluated at bid price : 23.30 Bid-YTW : 6.01 % |
| BAM.PR.O | OpRet | 2.06 % | YTW SCENARIO Maturity Type : Option Certainty Maturity Date : 2013-06-30 Maturity Price : 25.00 Evaluated at bid price : 26.25 Bid-YTW : 3.24 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| BMO.PR.J | Perpetual-Discount | 138,025 | Desjardins crossed 30,200 at 19.88. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2040-06-24 Maturity Price : 19.82 Evaluated at bid price : 19.82 Bid-YTW : 5.75 % |
| TD.PR.O | Perpetual-Discount | 127,971 | Nesbitt crossed 11,000 at 21.25. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2040-06-24 Maturity Price : 21.30 Evaluated at bid price : 21.30 Bid-YTW : 5.79 % |
| RY.PR.A | Perpetual-Discount | 68,060 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2040-06-24 Maturity Price : 19.64 Evaluated at bid price : 19.64 Bid-YTW : 5.74 % |
| SLF.PR.F | FixedReset | 55,790 | YTW SCENARIO Maturity Type : Call Maturity Date : 2014-07-30 Maturity Price : 25.00 Evaluated at bid price : 26.85 Bid-YTW : 4.05 % |
| BMO.PR.O | FixedReset | 44,752 | YTW SCENARIO Maturity Type : Call Maturity Date : 2014-06-24 Maturity Price : 25.00 Evaluated at bid price : 27.56 Bid-YTW : 3.93 % |
| RY.PR.R | FixedReset | 33,710 | YTW SCENARIO Maturity Type : Call Maturity Date : 2014-03-26 Maturity Price : 25.00 Evaluated at bid price : 27.19 Bid-YTW : 3.95 % |
| There were 23 other index-included issues trading in excess of 10,000 shares. | |||