There’s some cheerleading for solar power:
Electricity from coal costs about 7 cents a kilowatt hour compared with 6 cents for natural gas and 22.3 cents for solar photovoltaic energy in the final quarter of last year, according to New Energy Finance estimates.
Comparisons often overstate the costs of solar because they may take into account the prices paid by consumers and small businesses who install roof-top power systems, instead of the rates utilities charge each other, said Qu of Canadian Solar.
I’ll believe it when I see it.
There are more cross-currents in the Fed Funds rate:
U.S. money market rates dropped to about one-year lows as a change in deposit insurance fees makes some banks reluctant to lend securities and the Treasury reduces issuance of bills to avoid exceeding the debt limit.
The average rate for overnight federal funds, known as the fed effective rate, fell to 0.09 percent yesterday, the lowest since June. The rate was 0.18 at the start of the year. The average rate for borrowing and lending Treasuries for one day in the repurchase agreement market fell to 0.028 percent, the lowest since at least May 3, 2010, or as far back as index data is provided by the Depository Trust & Clearing Corp.
The Federal Deposit Insurance Corp. began last week to adjust calculations of U.S. banks’ deposit insurance fees to include all liabilities rather than just domestic deposits. The Treasury has reduced the amount of Supplementary Financing Program bills, or SFPs, it sells on behalf of the Federal Reserve by $195 billion to help avoid exceeding the U.S. debt limit.
“The new FDIC assessment structure, while intended to better protect taxpayers from large bank failures, has distorted activity in the short-term rates markets,” Brian Smedley, a strategist in New York at Bank of America Merrill Lynch, said in an interview. “This change will discourage opportunistic borrowing by insured banks in the fed funds and repo markets in particular, as banks will avoid leveraging their balance sheets unnecessarily to reduce the fees they pay the FDIC.”
It was a mixed day for the Canadian preferred share market, with PerpetualDiscounts up 14bp, FixedResets gaining 5bp, and DeemedRetractibes losing 11bp. Volatility was minimal, volume was reasonable.
National Bank issues subject to the issuer bid feature in the volume highlights as the deadline approaches. The prices are now reasonable relative to the tender price, although note that this is the last day of cum-dividend trading. Tomorrow they are ex-Dividend and it will be the last day to trade for regular settlement that will settle on the tender date.
| 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 | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.0356 % | 2,411.5 |
| FixedFloater | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.0356 % | 3,626.8 |
| Floater | 2.49 % | 2.27 % | 43,187 | 21.57 | 4 | -0.0356 % | 2,603.8 |
| OpRet | 4.91 % | 3.46 % | 55,517 | 2.11 | 8 | 0.0481 % | 2,413.6 |
| SplitShare | 5.20 % | -1.04 % | 118,873 | 0.69 | 6 | 0.1143 % | 2,496.2 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.0481 % | 2,207.0 |
| Perpetual-Premium | 5.75 % | 5.24 % | 129,520 | 1.10 | 8 | 0.1581 % | 2,049.7 |
| Perpetual-Discount | 5.51 % | 5.52 % | 134,768 | 14.45 | 16 | 0.1447 % | 2,141.5 |
| FixedReset | 5.14 % | 3.37 % | 213,956 | 2.97 | 57 | 0.0549 % | 2,294.5 |
| Deemed-Retractible | 5.21 % | 5.11 % | 300,469 | 8.22 | 53 | -0.1080 % | 2,095.8 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| BMO.PR.L | Deemed-Retractible | -1.11 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2017-06-24 Maturity Price : 25.00 Evaluated at bid price : 25.94 Bid-YTW : 5.25 % |
| BMO.PR.J | Deemed-Retractible | -1.03 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.02 Bid-YTW : 5.06 % |
| PWF.PR.K | Perpetual-Discount | 1.02 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-04-05 Maturity Price : 23.51 Evaluated at bid price : 23.77 Bid-YTW : 5.29 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| BAM.PR.K | Floater | 201,300 | Nesbitt crossed 200,000 at 19.10. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-04-05 Maturity Price : 19.10 Evaluated at bid price : 19.10 Bid-YTW : 2.76 % |
| NA.PR.N | FixedReset | 92,475 | Issuer bid. YTW SCENARIO Maturity Type : Call Maturity Date : 2013-09-14 Maturity Price : 25.00 Evaluated at bid price : 27.10 Bid-YTW : 2.09 % |
| NA.PR.P | FixedReset | 86,190 | Issuer bid. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-03-17 Maturity Price : 25.00 Evaluated at bid price : 28.41 Bid-YTW : 2.20 % |
| CIU.PR.A | Perpetual-Discount | 77,750 | Nesbitt crossed 75,000 at 22.55. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-04-05 Maturity Price : 22.41 Evaluated at bid price : 22.56 Bid-YTW : 5.15 % |
| BMO.PR.Q | FixedReset | 69,100 | Recent New Issue. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 25.00 Bid-YTW : 3.91 % |
| NA.PR.O | FixedReset | 53,607 | Issuer bid. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-03-17 Maturity Price : 25.00 Evaluated at bid price : 28.41 Bid-YTW : 2.19 % |
| There were 35 other index-included issues trading in excess of 10,000 shares. | |||
| Wide Spread Highlights | ||
| Issue | Index | Quote Data and Yield Notes |
| TCA.PR.X | Perpetual-Discount | Quote: 50.00 – 50.47 Spot Rate : 0.4700 Average : 0.2829 YTW SCENARIO |
| FTS.PR.H | FixedReset | Quote: 25.21 – 25.75 Spot Rate : 0.5400 Average : 0.4032 YTW SCENARIO |
| BMO.PR.M | FixedReset | Quote: 26.30 – 26.55 Spot Rate : 0.2500 Average : 0.1736 YTW SCENARIO |
| W.PR.H | Perpetual-Discount | Quote: 24.11 – 24.40 Spot Rate : 0.2900 Average : 0.2262 YTW SCENARIO |
| BMO.PR.J | Deemed-Retractible | Quote: 24.02 – 24.21 Spot Rate : 0.1900 Average : 0.1268 YTW SCENARIO |
| BAM.PR.R | FixedReset | Quote: 25.64 – 26.15 Spot Rate : 0.5100 Average : 0.4489 YTW SCENARIO |