Debt holders’ rights are being trampled in Ireland:
Ireland’s Finance Minister Michael Noonan said Allied Irish Bank Plc will seek to buy back subordinated debt in coming weeks and threatened to impose losses on holders that refuse the offer.
The government will “take whatever other action is necessary to ensure appropriate burden-sharing” with the lender’s remaining junior bondholders, Noonan said in a statement today. He didn’t give any terms of the buyback.
“They’re clearly trying to spook the market with a view to push bond prices lower so that they can get a decent take-up for any voluntary offer,” said Jim Ryan, director at Dublin-based Glas Securities. “The statement is suitably vague.”
…
Work is also underway to ensure “appropriate burden sharing” for subordinated bondholders of Bank of Ireland Plc and Irish Life & Permanent Plc, with “a further statement on this in the coming weeks,” Noonan said.He reiterated that the government doesn’t plan to enforce losses on senior bondholders of Allied Irish, Bank of Ireland, EBS Building Society and Irish Life, the country’s so-called viable lenders.
Some other European bonds declined as well:
Greek and Portuguese bonds led a slump in the securities of Europe’s most indebted nations amid mounting investor concern that some may be forced to restructure their debts.
The declines pushed the yields on Greek and Portuguese 10- year bonds to euro-era records after German Finance Minister Wolfgang Schaeuble said that Greece may need to renegotiate its debt burden if an audit in June questions its ability to pay creditors. Standard & Poor’s head of European sovereign ratings, Moritz Kraemer, said the risk of such an event has risen. Greek two-year yields climbed the most since January 27.
…
The yield on 10-year Greek debt jumped 36 basis points to 13.27 percent as of 4:38 p.m. in London, the highest since at least 1998 when Bloomberg began collecting the data. The two- year note yield surged as much as 103 basis points to 17.96 percent.Portuguese 10-year yields added 14 basis points to 8.88 percent, after reaching 8.89 percent, the most since at least 1997. Two-year note yields were 26 basis points higher at 9.31 percent.
Schaeuble told Germany’s Die Welt newspaper that Greece may have to restructure because creditors can’t be forced to take losses until Europe’s permanent rescue system for the euro starts up in mid-2013.
The US Senate has been astonished to learn that financial markets are not a cooperative game.
The IMF has released the April 2011 Global Financial Stability Report.
A British court has ruled “kettling” illegal:
The kettling of G20 protesters in London was illegal, a British High Court has ruled in a case with sweeping implications in Toronto.
The decision Thursday by the Queen’s Bench justices said police were working “in good faith” but still overreacted when they corralled 4,500 people inside a Climate Camp in London for three hours on April 1, 2009.
“The police may only take such preventive action as a last resort catering for situations about to descend into violence,” the Queen’s Bench justices.
“The test of necessity is met only in truly extreme and exceptional cases.”
For the life of me, I don’t understand why this method of detention without cause wasn’t understood to be illegal from the beginning, but better late than never.
The Canadian preferred share market was mostly down today, with PerpetualDiscounts losing 18bp, FixedResets gaining 4bp and DeemedRetractibles off 14bp. Volatility picked up a little with four entries in the Performance Highlights table. Volume was anemic.
| 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 | 0.0119 % | 2,409.2 |
| FixedFloater | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.0119 % | 3,623.4 |
| Floater | 2.50 % | 2.27 % | 39,540 | 21.56 | 4 | 0.0119 % | 2,601.3 |
| OpRet | 4.91 % | 3.12 % | 55,374 | 2.09 | 8 | 0.1205 % | 2,414.6 |
| SplitShare | 5.20 % | -1.52 % | 104,926 | 0.66 | 6 | 0.1737 % | 2,494.9 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.1205 % | 2,208.0 |
| Perpetual-Premium | 5.79 % | 5.61 % | 123,989 | 6.15 | 8 | 0.0646 % | 2,050.6 |
| Perpetual-Discount | 5.60 % | 5.66 % | 131,770 | 14.38 | 16 | -0.1812 % | 2,115.0 |
| FixedReset | 5.16 % | 3.46 % | 201,735 | 2.94 | 57 | 0.0411 % | 2,292.1 |
| Deemed-Retractible | 5.27 % | 5.23 % | 299,960 | 8.17 | 53 | -0.1429 % | 2,078.2 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| FTS.PR.F | Perpetual-Discount | -2.87 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-04-14 Maturity Price : 22.83 Evaluated at bid price : 23.02 Bid-YTW : 5.39 % |
| CIU.PR.A | Perpetual-Discount | 1.02 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-04-14 Maturity Price : 22.63 Evaluated at bid price : 22.80 Bid-YTW : 5.10 % |
| IAG.PR.E | Deemed-Retractible | 1.22 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2019-01-30 Maturity Price : 25.00 Evaluated at bid price : 25.73 Bid-YTW : 5.61 % |
| ELF.PR.G | Deemed-Retractible | 1.35 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 20.31 Bid-YTW : 7.33 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| NA.PR.M | Deemed-Retractible | 30,000 | RBC bought two blocks from Nesbitt: 14,000 at 25.91 and 14,100 at 25.90. YTW SCENARIO Maturity Type : Call Maturity Date : 2017-06-14 Maturity Price : 25.00 Evaluated at bid price : 25.85 Bid-YTW : 5.29 % |
| TD.PR.O | Deemed-Retractible | 21,992 | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.60 Bid-YTW : 5.05 % |
| MFC.PR.A | OpRet | 19,980 | YTW SCENARIO Maturity Type : Soft Maturity Maturity Date : 2015-12-18 Maturity Price : 25.00 Evaluated at bid price : 25.76 Bid-YTW : 3.47 % |
| BNS.PR.M | Deemed-Retractible | 19,410 | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 23.85 Bid-YTW : 5.06 % |
| TD.PR.G | FixedReset | 18,355 | YTW SCENARIO Maturity Type : Call Maturity Date : 2014-05-30 Maturity Price : 25.00 Evaluated at bid price : 27.15 Bid-YTW : 3.33 % |
| BMO.PR.J | Deemed-Retractible | 17,576 | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.09 Bid-YTW : 5.04 % |
| There were 16 other index-included issues trading in excess of 10,000 shares. | |||
| Wide Spread Highlights | ||
| Issue | Index | Quote Data and Yield Notes |
| FTS.PR.F | Perpetual-Discount | Quote: 23.02 – 23.65 Spot Rate : 0.6300 Average : 0.3712 YTW SCENARIO |
| TCA.PR.Y | Perpetual-Discount | Quote: 50.05 – 50.39 Spot Rate : 0.3400 Average : 0.2094 YTW SCENARIO |
| FTS.PR.E | OpRet | Quote: 26.80 – 27.07 Spot Rate : 0.2700 Average : 0.1817 YTW SCENARIO |
| TCA.PR.X | Perpetual-Discount | Quote: 50.07 – 50.34 Spot Rate : 0.2700 Average : 0.1868 YTW SCENARIO |
| RY.PR.G | Deemed-Retractible | Quote: 23.66 – 23.90 Spot Rate : 0.2400 Average : 0.1650 YTW SCENARIO |
| RY.PR.R | FixedReset | Quote: 27.30 – 27.52 Spot Rate : 0.2200 Average : 0.1452 YTW SCENARIO |