Spain is cutting off welfare recipients:
Spanish renewable-energy companies that once got Europe’s biggest subsidies are deserting the nation after the government shut off aid, pushing project developers and equipment-makers to work abroad or perish.
From wind-turbine maker Gamesa Corp. Tecnologica SA (GAM) to solar park developer T-Solar Global SA, companies are locked out of their home market for new business. These are the same suppliers that spearheaded more than $69 billion of wind and solar projects since 2004 that today supply more than 50 percent of Spain’s power demand on the most breezy and sunny days.
But fear not, subsidy fans! Germany’s still got lots of money!
Germany’s power-transmission companies have tabled plans to build four electricity Autobahns to link wind turbines off the north coast with manufacturing centres in the south – a boost for Angela Merkel after criticism from industry that Berlin has done little since announcing an accelerated nuclear phase-out a year ago.
Tennet, Amprion, 50 Hertz and Transnet BW said that building 3,800km high-voltage electricity lines – at a cost of around €20-billion – over the next decade was possible if politicians and public rallied behind the so-called energy transformation.
German two-year notes yield zero:
German two-year government notes advanced, sending the yield to zero for the first time.
The rate was at 0.002 percent at 4:36 p.m. London time.
Other countries yield a little more:
Signs of stress multiplied in financial markets today. Italy missed its target in a bond auction, driving its 10-year yields up to 6.01 percent at one point, the highest since Jan. 31. The yield was at 5.93 percent at 5:26 p.m. in Brussels. Doubts over the health of Spain’s banks pushed up Spanish 10- year yields to 6.70 percent, the highest since Nov. 28. That yield was last at 6.63 percent.
But … there’s never an ill wind …:
U.S. 5-year government bonds have also reached a new low of 0.6967 per cent, lower than the 0.7045 per cent they hit in early February, and 30-year Treasuries have also dropped to 2.72 per cent – though the low for these bonds was around 2.5 per cent in December 2008.
It was a sharply negative day for the Canadian preferred share market, with PerpetualPremiums down 15bp, FixedResets losing 31bp (about one-third of this was due to the evaporation of the bid in RY.PR.Y and may be regarded as ficticious and transient) and DeemedRetractibles off 11bp. The Performance Highlights table is longer than usual and dominated by losers. Volume was on the light side.
PerpetualDiscounts now yield 5.15%, equivalent to 6.70% interest at the standard equivalency factor of 1.3x. Long Corporates now yield about 4.4%, so the pre-tax interest-equivalent spread is now about 230bp, unchanged from the figure reported May 23.
| 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 | 0.1668 % | 2,477.7 |
| FixedFloater | 4.42 % | 3.79 % | 30,997 | 17.72 | 1 | 1.8957 % | 3,567.8 |
| Floater | 2.91 % | 2.94 % | 64,707 | 19.82 | 3 | 0.1668 % | 2,675.2 |
| OpRet | 4.81 % | 3.21 % | 39,537 | 1.05 | 5 | -0.2242 % | 2,494.8 |
| SplitShare | 5.27 % | -2.82 % | 50,592 | 0.56 | 4 | -0.0526 % | 2,718.4 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.2242 % | 2,281.3 |
| Perpetual-Premium | 5.46 % | 1.65 % | 78,857 | 0.62 | 25 | -0.1479 % | 2,224.8 |
| Perpetual-Discount | 5.10 % | 5.15 % | 79,846 | 15.16 | 8 | -0.1393 % | 2,434.4 |
| FixedReset | 5.08 % | 3.26 % | 195,818 | 7.34 | 69 | -0.3120 % | 2,384.4 |
| Deemed-Retractible | 5.01 % | 3.78 % | 159,862 | 2.93 | 45 | -0.1094 % | 2,308.2 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| RY.PR.Y | FixedReset | -8.18 % | Not a real loss – the issue traded 9,500 shares today in a range of 24.59-26.77. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.59 Bid-YTW : 5.91 % |
| GWO.PR.P | Deemed-Retractible | -1.61 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 25.65 Bid-YTW : 5.28 % |
| FTS.PR.H | FixedReset | -1.57 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2042-05-30 Maturity Price : 23.38 Evaluated at bid price : 25.01 Bid-YTW : 2.83 % |
| CU.PR.C | FixedReset | -1.47 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2017-06-01 Maturity Price : 25.00 Evaluated at bid price : 25.55 Bid-YTW : 3.53 % |
| IGM.PR.B | Perpetual-Premium | -1.34 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2018-12-31 Maturity Price : 25.00 Evaluated at bid price : 25.80 Bid-YTW : 5.44 % |
| CU.PR.B | Perpetual-Premium | -1.30 % | Called for redemption. YTW SCENARIO Maturity Type : Call Maturity Date : 2012-07-01 Maturity Price : 25.00 Evaluated at bid price : 25.10 Bid-YTW : 1.06 % |
| BAM.PR.G | FixedFloater | 1.90 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2042-05-30 Maturity Price : 22.30 Evaluated at bid price : 21.50 Bid-YTW : 3.79 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| IFC.PR.A | FixedReset | 99,400 | TD crossed 87,800 at 25.50. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 25.45 Bid-YTW : 3.61 % |
| CU.PR.A | Perpetual-Premium | 90,015 | TD crossed 80,300 at 25.38. YTW SCENARIO Maturity Type : Call Maturity Date : 2012-06-29 Maturity Price : 25.00 Evaluated at bid price : 25.30 Bid-YTW : -8.92 % |
| CU.PR.B | Perpetual-Premium | 85,570 | Called for redemption. YTW SCENARIO Maturity Type : Call Maturity Date : 2012-07-01 Maturity Price : 25.00 Evaluated at bid price : 25.10 Bid-YTW : 1.06 % |
| TD.PR.K | FixedReset | 84,510 | National crossed blocks of 54,400 and 24,400, both at 26.82. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-07-31 Maturity Price : 25.00 Evaluated at bid price : 26.87 Bid-YTW : 2.94 % |
| POW.PR.D | Perpetual-Discount | 62,705 | TD crossed 60,400 at 24.90. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2042-05-30 Maturity Price : 24.47 Evaluated at bid price : 24.80 Bid-YTW : 5.09 % |
| CIU.PR.B | FixedReset | 54,800 | RBC crossed 50,000 at 26.75. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-06-01 Maturity Price : 25.00 Evaluated at bid price : 26.71 Bid-YTW : 3.17 % |
| There were 25 other index-included issues trading in excess of 10,000 shares. | |||
| Wide Spread Highlights | ||
| Issue | Index | Quote Data and Yield Notes |
| RY.PR.Y | FixedReset | Quote: 24.59 – 26.77 Spot Rate : 2.1800 Average : 1.1558 YTW SCENARIO |
| PWF.PR.M | FixedReset | Quote: 25.94 – 26.30 Spot Rate : 0.3600 Average : 0.2154 YTW SCENARIO |
| BNA.PR.E | SplitShare | Quote: 24.52 – 24.95 Spot Rate : 0.4300 Average : 0.3064 YTW SCENARIO |
| IGM.PR.B | Perpetual-Premium | Quote: 25.80 – 26.30 Spot Rate : 0.5000 Average : 0.3905 YTW SCENARIO |
| CM.PR.K | FixedReset | Quote: 26.12 – 26.49 Spot Rate : 0.3700 Average : 0.2662 YTW SCENARIO |
| RY.PR.P | FixedReset | Quote: 26.11 – 26.35 Spot Rate : 0.2400 Average : 0.1637 YTW SCENARIO |
[…] yesterday’s nonsense. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-11-24 Maturity Price : 25.00 […]
[…] PerpetualDiscounts now yield 5.09%, equivalent to 6.62% interest at the standard equivalency factor of 1.3x. Long corporates now yield about 4.4% (OK, just a hair under) so the pre-tax interest-equivalent spread (in this context, the “Seniority Spread”) is now about 225bp, a slight (and perhaps spurious) decline from the 230bp reported May 30. […]