Scotiabank has announced a new issue, Non-Cumulative Preferred Shares, Series 17
Size: 8-million shares @ $25 = $200-million
Dividend: 5.60% ($1.40 p.a., paid quarterly); first dividend $0.33753 payable April 28, based on Jan. 31 closing.
Redemption: Redeemable at $26.00 commencing third-last business day of April 2013; redemption price declines by $0.25 annually; redeemable at $25.00 on and after April 26, 2017.
Closing: January 31, 2008
More later.
Update: Looks very good, with a curvePrice of $26.08 based on the yield curve as calculated for Ontario high marginal rates as of the close Jan. 16.However, the S&P/TSX Preferred Share Index is currently getting hammered, probably due to fears that it’s going to be deja vu all over again, with the curve shifting to reflect the new issue, rather than vice versa.
| Comparables | ||||
| Issue | Fair Value Estimated by HIMIPref™ |
Quote 1/16 | Dividend | Pre-Tax Bid Yield to Worst |
| BNS.PR.J | 24.79 | 24.87-95 | 1.3125 | 5.20% |
| BNS.PR.K | 23.44 | 23.02-05 | 1.2000 | 5.22% |
| BNS.PR.L | 22.27 | 21.56-59 | 1.1250 | 5.22% |
| BNS.PR.M | 22.27 | 21.55-70 | 1.1250 | 5.22% |
| BNS.PR.N | 24.87 | 24.76-80 | 1.3125 | 5.31% |
| CM.PR.E | 24.77 | 24.15-23 | 1.4000 | 5.81% |
| Series 17 | 26.08 | Not Trading | 1.4000 | 5.60% (at issue price) |
More later
Later, More: What a difference a day makes! The curve price is now $25.67.
| Comparables | ||||
| Issue | Fair Value Estimated by HIMIPref™ |
Quote 1/17 | Dividend | Pre-Tax Bid Yield to Worst |
| BNS.PR.J | 24.55 | 24.10-46 | 1.3125 | 5.40% |
| BNS.PR.K | 23.07 | 22.22-30 | 1.2000 | 5.42% |
| BNS.PR.L | 21.85 | 20.73-04 | 1.1250 | 5.45% |
| BNS.PR.M | 21.87 | 20.83-98 | 1.1250 | 5.43% |
| BNS.PR.N | 24.59 | 24.01-20 | 1.3125 | 5.48% |
| CM.PR.E | 24.41 | 23.67-85 | 1.4000 | 5.93% |
| Series 17 | 25.67 | Not Trading | 1.4000 | 5.60% (at issue price) |
Update, 2008-01-21: Curve Price now $25.47
Update, 2008-1-26: Curve price as of 1/25 is $25.15
Update, 2008-1-30: Symbol is BNS.PR.O
[…] Today’s response in the preferred market to the new BNS 5.60% Perpetual certainly makes my “frothy” correspondent of January 7 and January 8 look like a genius! The correspondent now feels that (a) long-term, prefs are a buy; (b) short term, it might be better to wait; and (c) if another issue comes out before the new issue settles, take the day off and buy a bottle of something tasty. […]
[…] Hard on the heels of the BNS new issue comes TD Bank’s offering: […]
[…] BNS.PR.O, which caused a sharp downdraft when it was announced got off to a solid start today, trading 550,670 shares to close at 25.02-08, 48×20. […]
[…] The FloatingRate index bounced back (just a little bit!) from its disastrous performance in December. The tepid returns for the two perpetual sub-indices mask a great deal of excitement – at its peak on January 16 the PerpetualDiscount index was up 1.85% on the month, while at its trough on January 21 it was down 1.23%. The downdraft was caused by a new issue: BNS.PR.O, announced January 17. There was extreme fear that this could presage another hit to the market as happened in September, but by the time TD.PR.Q was announced January 22 the worst was over. […]
[…] It was another interesting month, in terms of trends. Readers will remember that strength in early December evaporated in the face of tax-loss selling, exacerbated by sudden concerns regarding the credit quality of CIBC. In January, early strength was blown away by the new BNS perpetual issue, which raised fears that the market would reprice itself to reflect the concessionary 5.6% coupon. These fears proved to be unfounded … but not before the market came very close to dipping below its November 30 value – which, for now, remains the month-end marking the market’s low point. […]
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