The US gift to the farmers’ lobbyists will continue:
President Barack Obama’s administration rejected a request from the governors of eight U.S. states to waive requirements for blending corn-based ethanol into gasoline, said a person familiar with the decision.
…
This year’s U.S. corn harvest is forecast at 10.725 billion bushels, the smallest in six years because of the drought. About 4.5 billion bushels will be used to make ethanol in the year starting Sept. 1, or about 42 percent of the 2012 crop, the USDA estimated on Nov. 9.
If it was about being nice little goody-greens, they’d make the ethanol from Brazilian sugar beets or sugar cane. But it has nothing to do with the environment.
Canaccord Financial, proud issuer of CF.PR.A and CF.PR.C, was confirmed at Pfd-3(low), Trend Negative, by DBRS:
DBRS has today confirmed its rating of the Preferred Shares of Canaccord Financial Inc. (Canaccord or the Company) at Pfd-3 (low). The Negative trend, which was assigned in December 2011 following the announcement of the Company’s $400 million acquisition of Collins Stewart Hawkpoint plc (CSHP), is being maintained. Initially, the Negative trend was assigned to reflect the relatively large size of the Collins Stewart acquisition, financing uncertainty and integration risk, given the uncertain ambient market environment. The Company’s second issue of preferred shares in April 2012 ($100 million), combined with some excess working capital, allowed the Company to repay the $150 million short-term credit facility drawn to fund part of the $244 million cash portion of the acquisition cost, which addresses most of the financing concern. The integration appears to be proceeding smoothly, notwithstanding over $35 million in associated restructuring cost provisions, mitigated by good potential for realizing expense and revenue synergies in the Company’s U.K. and U.S. operations. The weak market environment nevertheless continues to be a source of concern for DBRS.
…
The nature of the Company’s products and services, as well as the natural resource orientation of its client base, expose it to a great deal of revenue volatility related to economic and market cycles, including both capital and commodity markets. Normally, the adverse impact of such market exposures and associated revenue volatility on earnings and cash flow would be mitigated by the Company’s flexible cost base and the absence of operating leverage. Even though the Company has made strategic investments to diversify away from these market exposures while actively addressing its cost base, the current market environment is especially unfavourable for the broker-dealer industry, depressing earnings and cash flow below what DBRS believes should be sustainable in the long run. While DBRS applauds the strategic and expense initiatives taken by the Company to date, the level of uncertainty surrounding the Company’s industry makes it inappropriate to remove the Negative rating trend at this time.
HSBC Bank Canada, proud issuer of HSB.PR.C, HSB.PR.D and HSB.PR.E was confirmed at Pfd-2(high) [Review Negative] by DBRS:
DBRS has today confirmed the ratings of HSBC Bank Canada (HSBC or the Bank) and related entities, including the Bank’s Long-Term Deposits and Senior Debt rating at AA and its Short-Term Instruments rating at R-1 (high). All ratings remain Under Review with Negative Implications.
On July 20, 2012, DBRS placed all the ratings of HSBC Bank Canada and related entities Under Review with Negative Implications following the rating action of Under Review with Negative Implications on the ratings of HSBC Holdings plc (the Parent). Under DBRS’s global bank rating methodology, HSBC Bank Canada has been assigned a support assessment of SA1, reflecting expected timely support from the Parent, of which HSBC Bank Canada’s ratings are largely based on. DBRS anticipates resolving the ratings review on HSBC Bank Canada once the review has been completed for HSBC Holdings plc.
Shaw Communications, proud issuer of SJR.PR.A, was confirmed at Pfd-3 by DBRS:
DBRS has today confirmed Shaw Communications Inc.’s (Shaw or the Company) Issuer Rating at BBB, Senior Notes rating at BBB, and Preferred Shares rating at Pfd-3; the trends remain Stable. The confirmation reflects the view that the Company’s earnings profile remains reasonable for its current rating category, based on its incumbent position in Western Canada, large subscriber base and industry-leading operating margins, while acknowledging that intensifying competition is placing increasing pressure on the Company’s cable television and broadband subscriber base. DBRS notes that slowing top-line growth in recent periods is also somewhat offset by the fact that key credit metrics remain reasonable for the current rating category.
Shaw’s revenue growth rate decelerated to 5.4% in F2012 versus almost 10% in prior years as Shaw’s broadband Internet and home phone subscriber growth was partially offset by declines in cable TV subscribers. The Company’s TV segment lost 70,000 basic cable subscribers (predominantly to TELUS Corporation) over the period while Internet and home phone subscriber growth decelerated compared to prior years. That said, consolidated operating margins remained relatively stable at 43%, resulting in EBITDA growth of 4% to $2.1 billion. Shaw’s financial profile remains relatively stable and consistent with the current rating category as operating income/cash flow generation and debt levels have remained fairly steady. Gross debt-to-EBITDA decreased slightly to 2.47 times (x) for F2012 from 2.56x the prior year.
It was a mixed day for the Canadian preferred share market, with PerpetualPremiums off 1bp, FixedResets gaining 6bp and DeemedRetractibles flat. Volatility was low. Volume was very low – have we hit the Christmas slump yet?
| 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 | 0.1882 % | 2,451.3 |
| FixedFloater | 4.18 % | 3.51 % | 29,711 | 18.28 | 1 | 0.0000 % | 3,853.3 |
| Floater | 2.82 % | 3.02 % | 55,523 | 19.63 | 4 | 0.1882 % | 2,646.8 |
| OpRet | 4.61 % | 2.48 % | 62,895 | 1.31 | 4 | 0.0344 % | 2,591.6 |
| SplitShare | 5.39 % | 4.86 % | 55,920 | 4.43 | 3 | -0.7420 % | 2,844.7 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.0344 % | 2,369.8 |
| Perpetual-Premium | 5.25 % | 2.76 % | 73,679 | 0.89 | 30 | -0.0052 % | 2,319.1 |
| Perpetual-Discount | 4.87 % | 4.92 % | 99,675 | 15.57 | 3 | -0.0410 % | 2,611.4 |
| FixedReset | 4.98 % | 3.00 % | 201,264 | 3.95 | 75 | 0.0599 % | 2,450.7 |
| Deemed-Retractible | 4.91 % | 3.43 % | 121,791 | 0.93 | 46 | -0.0041 % | 2,398.2 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| BNA.PR.E | SplitShare | -1.17 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2017-12-10 Maturity Price : 25.00 Evaluated at bid price : 25.25 Bid-YTW : 4.86 % |
| GWO.PR.I | Deemed-Retractible | -1.02 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.35 Bid-YTW : 4.96 % |
| PWF.PR.M | FixedReset | 1.15 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2014-01-31 Maturity Price : 25.00 Evaluated at bid price : 26.37 Bid-YTW : 1.62 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| BMO.PR.N | FixedReset | 135,177 | Nesbitt crossed 60,000 at 26.30, then sold 50,000 to Scotia at 26.32 and 20,000 to TD at 26.32. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-02-25 Maturity Price : 25.00 Evaluated at bid price : 26.35 Bid-YTW : 2.08 % |
| POW.PR.G | Perpetual-Premium | 57,002 | RBC crossed 54,700 at 27.15. YTW SCENARIO Maturity Type : Call Maturity Date : 2017-04-15 Maturity Price : 26.00 Evaluated at bid price : 27.11 Bid-YTW : 4.45 % |
| IFC.PR.A | FixedReset | 53,863 | National crossed 50,000 at 25.52. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 25.56 Bid-YTW : 3.52 % |
| CU.PR.C | FixedReset | 53,200 | Scotia crossed 50,000 at 26.00. YTW SCENARIO Maturity Type : Call Maturity Date : 2017-06-01 Maturity Price : 25.00 Evaluated at bid price : 26.00 Bid-YTW : 3.03 % |
| FTS.PR.J | Perpetual-Premium | 49,011 | Recent new issue. YTW SCENARIO Maturity Type : Call Maturity Date : 2021-12-01 Maturity Price : 25.00 Evaluated at bid price : 25.21 Bid-YTW : 4.67 % |
| RY.PR.X | FixedReset | 27,750 | Scotia crossed 25,000 at 26.85. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-08-24 Maturity Price : 25.00 Evaluated at bid price : 26.76 Bid-YTW : 2.13 % |
| There were 14 other index-included issues trading in excess of 10,000 shares. | |||
| Wide Spread Highlights | ||
| Issue | Index | Quote Data and Yield Notes |
| ELF.PR.F | Perpetual-Premium | Quote: 25.27 – 25.84 Spot Rate : 0.5700 Average : 0.3760 YTW SCENARIO |
| HSB.PR.C | Deemed-Retractible | Quote: 25.81 – 26.50 Spot Rate : 0.6900 Average : 0.5013 YTW SCENARIO |
| MFC.PR.F | FixedReset | Quote: 24.23 – 24.62 Spot Rate : 0.3900 Average : 0.2654 YTW SCENARIO |
| GWO.PR.I | Deemed-Retractible | Quote: 24.35 – 24.60 Spot Rate : 0.2500 Average : 0.1585 YTW SCENARIO |
| BNA.PR.C | SplitShare | Quote: 24.37 – 24.62 Spot Rate : 0.2500 Average : 0.1642 YTW SCENARIO |
| BAM.PF.A | FixedReset | Quote: 25.89 – 26.18 Spot Rate : 0.2900 Average : 0.2098 YTW SCENARIO |