Julie Dickson’s speech was not very interesting – just a shopping list of aspirations for a board. Of passing interest was:
This leads me to explain why OSFI’s draft guideline (B-20) on Sound Residential Mortgage Underwriting Practices and Procedures, which we made public on March 19th, begins with the statement that boards must establish real estate underwriting policies. In fact, most boards have already established such policies. This makes sense; housing is the largest asset class exposure of banks – almost 42 per cent of total bank assets.
While these policies will have to be updated to reflect the new guidance, going forward senior management will have to provide a declaration to the board that the financial institution is in compliance with the OSFI guideline. This was added because we had noticed cases where board approved polices were not being followed.
Seems to me that if I was on a board that set a policy and that policy was not followed, I’d simply ensure that somebody senior got fired at every board meeting until it did get followed. But perhaps that’s just another reason why I’m not on a big-shot board.
Another, related, reason is my antiquated idea that boards are in place to set policies and hire staff to carry them out. The modern view is that boards exist to provide jobs to unqualified women – despite that fact that it does not work:
A recent study released by the German central bank found that risk taking within the banking industry increases with more women on an executive board. The same goes for younger executives. In contrast, men who are graying at the temples and executives with Ph.D. degrees reduce the level of risk.
Tomorrow’s US jobs number is expected to be encouraging:
Employers probably added more than 200,000 workers to payrolls in March for a fourth straight month as U.S. companies gained confidence sales will keep improving, economists said before a government report today.
Hiring increased by 205,000 after rising by 227,000 in February, according to the median projection of 80 economists surveyed by Bloomberg News. The last time employment advanced at a similar pace for as many months was late 1999 into 2000. The jobless rate probably held at a three-year low of 8.3 percent.
Cowboys will have 45 minutes to settle their bets:
While stock markets around the world are shut for Good Friday, the Labor Department will publish its monthly employment report at 8:30 a.m. New York time. Equity traders will have 45 minutes to react, as trading of futures linked to the Standard & Poor’s 500 Index and Dow Jones Industrial Average will continue until 9:15 a.m. on CME Group Inc. (CME)’s Chicago Mercantile Exchange.
The Canadian jobs number was good:
Canada’s labour market has finally perked up after half a year in the doldrums as a commodities boom and a firmer U.S. economy give employers the confidence to hire.
The economy churned out 82,300 jobs last month, the most since 2008, with many of the positions created in full-time work. The hiring spree sent the country’s jobless rate down two notches to 7.2 per cent in March, matching the lowest rate seen in the recovery.
First National, proud issuer of FN.PR.A, was confirmed at Pfd-3 by DBRS:
DBRS has today confirmed the Senior Secured – Guaranteed Debt and Class A Preference Shares ratings of First National Financial Corporation (FNFC) at BBB and Pfd-3, respectively, and the Issuer Rating of First National Financial LP (FNFLP) at BBB; all trends remain Stable.
The ratings and trends reflect FNFC’s status as Canada’s largest non-bank mortgage originator, with just under $60 billion in mortgages under administration (MUA) as of December 31, 2011; its strong asset quality profile, with all assets secured by real estate and a substantial portion insured; and its high-quality, low-cost servicing capabilities.
The rating on FNFC’s Senior Secured – Guaranteed Debt is based on a senior guarantee from FNFLP and an Intercreditor Agreement between Computershare Trust Company of Canada as the debenture trustee and the lenders under a credit facility. The Intercreditor Agreement ranks the indebtedness created under the debentures equally and ratably with the indebtedness created under FNFLP’s credit facility.
It was another mixed day for the Canadian preferred share market, with PerpetualPremiums winning 13bp, FixedResets off 2bp and DeemedRetractibles gaining 11bp. Only one issue made it to the Performance Highlights table. Volume was pathetic.
| 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 | 0.1329 % | 2,417.6 |
| FixedFloater | 4.52 % | 3.92 % | 37,353 | 17.38 | 1 | -0.0951 % | 3,448.6 |
| Floater | 2.99 % | 3.01 % | 46,771 | 19.73 | 3 | 0.1329 % | 2,610.4 |
| OpRet | 4.93 % | 3.42 % | 68,027 | 1.17 | 6 | 0.0451 % | 2,499.6 |
| SplitShare | 5.25 % | -4.84 % | 85,019 | 0.70 | 4 | -0.0890 % | 2,693.0 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.0451 % | 2,285.7 |
| Perpetual-Premium | 5.48 % | -3.53 % | 89,888 | 0.16 | 23 | 0.1273 % | 2,217.4 |
| Perpetual-Discount | 5.20 % | 5.17 % | 135,476 | 15.18 | 10 | 0.0946 % | 2,401.6 |
| FixedReset | 5.02 % | 2.99 % | 186,121 | 2.21 | 67 | -0.0155 % | 2,392.0 |
| Deemed-Retractible | 4.96 % | 3.88 % | 201,950 | 2.02 | 46 | 0.1088 % | 2,305.3 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| PWF.PR.F | Perpetual-Premium | 1.14 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2012-05-05 Maturity Price : 25.00 Evaluated at bid price : 25.26 Bid-YTW : -11.38 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| RY.PR.W | Perpetual-Premium | 86,210 | Scotia crossed 45,000 at 25.40; TD crossed 25,000 at the same price. TD bought 11,000 from Nesbitt at 25.39. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-02-24 Maturity Price : 25.00 Evaluated at bid price : 25.36 Bid-YTW : 4.43 % |
| ENB.PR.H | FixedReset | 68,981 | Recent new issue. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2042-04-05 Maturity Price : 23.16 Evaluated at bid price : 25.20 Bid-YTW : 3.59 % |
| FTS.PR.F | Perpetual-Premium | 20,965 | RBC crossed 10,000 at 25.12. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2042-04-05 Maturity Price : 24.57 Evaluated at bid price : 25.10 Bid-YTW : 4.91 % |
| NA.PR.K | Deemed-Retractible | 20,945 | YTW SCENARIO Maturity Type : Call Maturity Date : 2012-05-15 Maturity Price : 25.00 Evaluated at bid price : 25.60 Bid-YTW : -8.41 % |
| RY.PR.A | Deemed-Retractible | 20,430 | YTW SCENARIO Maturity Type : Call Maturity Date : 2014-05-24 Maturity Price : 25.25 Evaluated at bid price : 25.48 Bid-YTW : 4.22 % |
| CM.PR.M | FixedReset | 20,300 | RBC crossed 12,000 at 27.05. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-07-31 Maturity Price : 25.00 Evaluated at bid price : 27.01 Bid-YTW : 2.73 % |
| There were 12 other index-included issues trading in excess of 10,000 shares. | |||
| Wide Spread Highlights | ||
| Issue | Index | Quote Data and Yield Notes |
| BAM.PR.B | Floater | Quote: 17.71 – 19.00 Spot Rate : 1.2900 Average : 0.7519 YTW SCENARIO |
| BAM.PR.J | OpRet | Quote: 26.85 – 27.35 Spot Rate : 0.5000 Average : 0.3062 YTW SCENARIO |
| TCA.PR.Y | Perpetual-Premium | Quote: 52.01 – 52.48 Spot Rate : 0.4700 Average : 0.3115 YTW SCENARIO |
| SLF.PR.I | FixedReset | Quote: 25.25 – 25.60 Spot Rate : 0.3500 Average : 0.2686 YTW SCENARIO |
| BAM.PR.G | FixedFloater | Quote: 21.01 – 21.59 Spot Rate : 0.5800 Average : 0.5029 YTW SCENARIO |
| SLF.PR.H | FixedReset | Quote: 24.15 – 24.40 Spot Rate : 0.2500 Average : 0.1810 YTW SCENARIO |