New Perpetual Issue : Sunlife 4.45%

I have just learned that Sunlife is coming out with a new issue of preferreds, Series 4.

They are perpetual and pay $1.1125 p.a. Closing is expected to be 2006-10-10.

The redemption schedule is:

  • Redemption      2011-12-31      2012-12-30  26.000000
  • Redemption      2012-12-31      2013-12-30  25.750000
  • Redemption      2013-12-31      2014-12-30  25.500000
  • Redemption      2014-12-31      2015-12-30  25.250000
  • Redemption      2015-12-31   INFINITE DATE  25.000000

If we compare this issue with

  • RY.PR.A, which has the same dividend and credit rating, and is perpetual with the call schedule starting seven months earlier
  • SLF.PR.C, which also has the same dividend, is perpetual and has the call schedule starting nine months earlier

, using the yield curve as derived for taxable clients:

  SLF.PR.? RY.PR.A SLF.PR.C
Price due to base-rate 22.69  22.77 22.70
Price due to short-term 0.08  0.08 0.08
Price due to long-term 0.58  0.61 0.62
Price due to error 0.01  -0.01 -0.01
Price due to Credit Spread (Low) -0.29  -0.31 -0.31
Intrinsic Curve Price 23.07  23.14 23.08
Price due to Liquidity  1.32 (?)  1.32 1.32
Total Curve Price  24.39 (?)  24.46 24.40
Closing Quote, 2006-09-28 N/A 24.93-94 24.65-79

Well, I’m going to reserve judgement until I’ve received the prospectus! But this doesn’t look like a very attractive issue at all, given that even after allowing over $1.00 for the privilege of trading a million shares at a time it STILL looks over-valued at the issue price of $25.

Once I’ve seen a prospectus I’ll be issuing a press release. The issue has been added to the HIMIPref™ database and full pre-issue analytics are available to subscribers.

This entry was posted on Thursday, September 28th, 2006 at 4:33 pm and is filed under Data Changes, New Issues. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

2 Responses to “New Perpetual Issue : Sunlife 4.45%”

  1. PrefBlog » Blog Archive » Quiet Disaster for SLF.PR.D says:
    October 10, 2006 at 8:45 pm

    […] Readers will be familiar with my earlier comments on this issue … price-wise, things worked out much as expected – the closing quotation was $24.50-55, 14×61. The volume was a surprise, however, with only 12,300 shares trading on its first day out, which can be interpreted in a number of ways. […]

  2. PrefBlog » Blog Archive » SLF.PR.D : Inventory Blow-out Sale! says:
    February 14, 2008 at 11:10 pm

    […] Readers will remember that I wasn’t too impressed with this issue when it came out. […]

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