Trader Corporation is issuing USD junk bonds:
One deal has launched in the high-yield market this morning as issuance remains slow. Trader Corporation, a Canadian online automotive marketplace, announced a US$275m seven-year non-call three senior secured offering via RBC sole books. The roadshow begins tomorrow with pricing expected late next week. Proceeds will fund the acquisition of Trader Corp by Apax Partners.
So what’s the better bet for junk? Yellow Media, Trader Corp, or Ireland?:
A late-day rally in U.S. stocks faded after Ireland’s debt rating was cut to junk at Moody’s Investors Service, overshadowing signs the Federal Reserve had not ruled out further stimulus efforts.
The Standard & Poor’s 500 Index lost 0.1 percent to 1,318.06 at 3:33 p.m. in New York after climbing as much as 0.6 percent. The benchmark gauge tumbled 2.5 percent in the previous two days, its worst back-to-back slump since March. Moody’s cut Ireland’s government bond rating one notch to Ba1 from Baa3, spurring concern Europe’s debt crisis is worsening.
CIBC’s current strategy should contribute to earnings stability and improved capital levels, thereby better positioning the Bank for future downturns. As capital is freed up from the reduction in the run-off book, DBRS would like to see resources deployed in less volatile businesses that are a natural extension of existing capabilities. The latest financial crisis provided CIBC with the opportunity to purchase CITI Cards Canada Inc.’s Canadian MasterCard portfolio which DBRS believes is consistent with CIBC’s desire to accelerate growth in its core banking business by strengthening its number one position in credit cards and being a dual credit card issuer in Canada.
DBRS assigned some Allied Irish notes as Default:
In respect of the Notes, the High Court has declared that the subordinated liabilities order (SLO) issued by the High Court on 14 April 2011 under the Credit Institutions (Stabilisation) Act 2010 is effective as of 22 April 2011. The SLO amends the terms of the subordinated debt, including interest due, so that it is payable only at the option of AIB; and the maturity date of the Notes has been extended to June 2035. Additionally, in accordance with the amendments, AIB announced that no payment of interest that would have been due to holders of the Notes on 25 June 2011 will be made by AIB.
The downgrade reflects the halting of interest payments on the Notes by AIB and DBRS’s expectation that the future interest payments of these outstanding subordinated instruments will be halted, as allowed by the High Court. Further, the downgrade considers the aforementioned extension of the final maturity date. Given that bondholders are unlikely to receive interest as agreed upon and that the expected maturity has been extended, DBRS views these actions as disadvantageous to bondholders, which is considered a default under DBRS policy.
Thre was similar action on Irish Life & Permanent:
DBRS Inc. (DBRS) today has downgraded the Dated Subordinated Debt rating of Irish Life & Permanent plc (IL&P or the Group) to “D” from “C”. Today’s downgrade follows the execution of the Group’s note tender offer.
The default status for the purchased and now-extinguished notes reflects DBRS’s view that bondholders were offered limited options and that a distressed exchange has now occurred, which is considered a default under DBRS policy, as discussed in DBRS’s press release dated 8 June 2011.
It was a mixed day for the Canadian preferred share market, with PerpetualDiscounts winning 12bp, FixedResets up 1bp and DeemedRetractibles down 8bp. Volatility was good. Volume remained very low.
| 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 | 1.7512 % | 2,445.3 |
| FixedFloater | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 1.7512 % | 3,677.7 |
| Floater | 2.48 % | 2.29 % | 43,048 | 21.50 | 4 | 1.7512 % | 2,640.3 |
| OpRet | 4.86 % | 2.25 % | 64,666 | 0.22 | 9 | 0.0514 % | 2,445.2 |
| SplitShare | 5.24 % | 2.01 % | 55,517 | 0.62 | 6 | -0.0055 % | 2,508.7 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.0514 % | 2,235.9 |
| Perpetual-Premium | 5.69 % | 5.06 % | 134,358 | 0.78 | 13 | 0.0580 % | 2,089.0 |
| Perpetual-Discount | 5.46 % | 5.46 % | 114,555 | 14.70 | 17 | 0.1222 % | 2,193.6 |
| FixedReset | 5.15 % | 3.19 % | 208,976 | 2.67 | 58 | 0.0073 % | 2,319.5 |
| Deemed-Retractible | 5.10 % | 4.86 % | 264,688 | 8.10 | 47 | -0.0793 % | 2,155.3 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| MFC.PR.B | Deemed-Retractible | -1.45 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 22.47 Bid-YTW : 6.03 % |
| BNS.PR.Z | FixedReset | -1.29 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.55 Bid-YTW : 3.77 % |
| HSB.PR.D | Deemed-Retractible | -1.28 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.60 Bid-YTW : 5.25 % |
| IAG.PR.C | FixedReset | 1.13 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2013-12-31 Maturity Price : 25.00 Evaluated at bid price : 26.85 Bid-YTW : 3.17 % |
| PWF.PR.A | Floater | 6.49 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-07-12 Maturity Price : 22.55 Evaluated at bid price : 22.80 Bid-YTW : 2.29 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| IFC.PR.A | FixedReset | 542,720 | New issue settled today. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 25.08 Bid-YTW : 4.06 % |
| RY.PR.I | FixedReset | 136,070 | Nesbitt crossd 100,000 at 26.20; RBC crossed 25,000 at the same price. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-02-24 Maturity Price : 25.00 Evaluated at bid price : 26.20 Bid-YTW : 3.35 % |
| CM.PR.H | Deemed-Retractible | 87,661 | Called for redemption. YTW SCENARIO Maturity Type : Call Maturity Date : 2012-04-30 Maturity Price : 25.50 Evaluated at bid price : 25.71 Bid-YTW : 3.33 % |
| RY.PR.R | FixedReset | 64,775 | Nesbitt crossed 50,000 at 27.25. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-02-24 Maturity Price : 25.00 Evaluated at bid price : 27.18 Bid-YTW : 3.11 % |
| BMO.PR.M | FixedReset | 58,435 | TD bought three blocks from Nesbitt, of 10,300 shares, 19,900 and 15,500, all at 26.20. YTW SCENARIO Maturity Type : Call Maturity Date : 2013-08-25 Maturity Price : 25.00 Evaluated at bid price : 26.20 Bid-YTW : 2.99 % |
| RY.PR.N | FixedReset | 56,900 | Nesbitt crossed 50,000 at 27.25. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-02-24 Maturity Price : 25.00 Evaluated at bid price : 27.25 Bid-YTW : 3.00 % |
| There were 23 other index-included issues trading in excess of 10,000 shares. | |||
| Wide Spread Highlights | ||
| Issue | Index | Quote Data and Yield Notes |
| FTS.PR.H | FixedReset | Quote: 25.46 – 26.00 Spot Rate : 0.5400 Average : 0.3362 YTW SCENARIO |
| CIU.PR.C | FixedReset | Quote: 25.00 – 25.45 Spot Rate : 0.4500 Average : 0.3360 YTW SCENARIO |
| RY.PR.I | FixedReset | Quote: 26.20 – 26.59 Spot Rate : 0.3900 Average : 0.2859 YTW SCENARIO |
| HSB.PR.E | FixedReset | Quote: 27.40 – 27.69 Spot Rate : 0.2900 Average : 0.1913 YTW SCENARIO |
| IAG.PR.E | Deemed-Retractible | Quote: 25.90 – 26.30 Spot Rate : 0.4000 Average : 0.3032 YTW SCENARIO |
| RY.PR.Y | FixedReset | Quote: 27.45 – 27.70 Spot Rate : 0.2500 Average : 0.1588 YTW SCENARIO |