Demand Brisk for NA 6.00% Perps?

Andrew Willis of the Globe has reported:

National Bank sold $150-million of perpetual preferred shares with a 6 per cent yield, and underwriters, led by National Bank Financial, reported brisk demand.

Mr. Willis speculates that RY will be next up. We will see!

As previously reported on PrefBlog the closing date for the new issue is April 16; the underwriters’ greenshoe is not exercisable until then.

4 Responses to “Demand Brisk for NA 6.00% Perps?”

  1. madequota says:

    Mr. Willis is obviously an assiduous reader (who agrees with madequota perhaps?)

    The pref market today is doing what it’s supposed to do for a change! It’s gaining on all fronts, with the infamous financial prefs leading the charge with strong supporting bids coming in all over the place. If this is indeed a preliminary indication of troughing achieved, then I might have to actually predict an opening for NA.PR.M above par. It might even make sense to subscribe to this puppy on IPO. That hurt, but I said it.

    About the only thing on the screen that’s not moving forward is BMO.PR.L, but it’s only down a penny, and the offer is drying up substantially. Probably time to go long on this one as well. This is killing me.

    If RBC makes this the time to come in with a super issue at 6.0%+, I will do everyone a favour here, and promise to refrain from any commentary. I have to go and lie down now.


  2. jiHymas says:

    I’m not sure if RY would have to pay 6.0%+ to get a deal done. Their existing issues are yielding 5.5-5.6% … I suspect that they could get away with 5.80%.

  3. madequota says:

    TD.PR.Q is a 5.6; it went ex today, and is still trading a dime below par. BMO.PR.L is at 5.8 and looks to be troughed at $24.70. On top of that you raise a valid point with the current yields of 5.5 – 5.6% on RY. The only other factor I can think of is the RY arrogance thing, where they perceive themselves as the perennial financial king of the hill.

    All of those factors suggest, I would say, a maximum of 5.75% as the coupon, or perhaps 5.8% as you mention.

    Having said all that, they’re still RBC; as such they have the ability to . . . surprise us.

    Have a great weekend, btw.


  4. […] may presume that this pseudo-bond issuance decreases – very, very slightly – the chance that speculation regarding a RY preferred issue will come to […]

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