It’s nice to see someone with a brain making an impact amidst all the SEC lawyers:
Concern that American stock markets have become more susceptible to split-second crashes due to computerization isn’t supported by the data, a Securities and Exchange Commission official said.
Most “mini-flash crashes,” a term sometimes applied when an individual U.S. stock briefly surges or plunges for no obvious reason, are the result of human errors, not broken software, said Gregg Berman, head of the SEC’s Office of Analytics and Research.
…
In September, the Senate Subcommittee on Securities, Insurance and Investment held hearings on the impact of computerized trading amid concern algorithmic and high-frequency strategies are contributing to investor uncertainty.“A popular meme has emerged that, taken collectively, sudden price spikes indicate a broken market” and may be harbingers of another crash like the one in 2010, Berman said in New York today at a conference sponsored by the Securities Industry and Financial Markets Association. Critics who blame everything on electronic trading “may be looking in the wrong place,” he said.
DBRS has downgraded the debt of TCA and TRP but left the preferred share ratings unchanged:
DBRS has today downgraded the Issuer Rating and Unsecured Debentures & Notes rating of TransCanada PipeLines Limited (TCPL) to A (low) from “A”, the Junior Subordinated Notes rating of TCPL to BBB from BBB (high) and the Medium-Term Notes & Unsecured Debentures rating of NOVA Gas Transmission Ltd. (NGTL), a wholly owned subsidiary of TCPL, to A (low) from “A”, all with Stable trends. The NGTL rating action reflects DBRS’s view that continued financial and liquidity support from TCPL is key to NGTL’s long-term debt rating.
DBRS has also confirmed the preferred share ratings of TCPL and of TransCanada Corporation (TCC, TCPL’s parent company) at Pfd-2 (low) with Stable trends, reflecting DBRS’s belief that the existing ratings are already conservative relative to TCPL’s Issuer Rating and that DBRS views it as unlikely that any debt instruments will be issued at TCC. These actions remove all of the above-noted ratings from Under Review with Negative Implications where they were placed on March 28, 2013.DBRS has today downgraded the Issuer Rating and Unsecured Debentures & Notes rating of TransCanada PipeLines Limited (TCPL) to A (low) from “A”, the Junior Subordinated Notes rating of TCPL to BBB from BBB (high) and the Medium-Term Notes & Unsecured Debentures rating of NOVA Gas Transmission Ltd. (NGTL), a wholly owned subsidiary of TCPL, to A (low) from “A”, all with Stable trends. The NGTL rating action reflects DBRS’s view that continued financial and liquidity support from TCPL is key to NGTL’s long-term debt rating. DBRS has also confirmed the preferred share ratings of TCPL and of TransCanada Corporation (TCC, TCPL’s parent company) at Pfd-2 (low) with Stable trends, reflecting DBRS’s belief that the existing ratings are already conservative relative to TCPL’s Issuer Rating and that DBRS views it as unlikely that any debt instruments will be issued at TCC. These actions remove all of the above-noted ratings from Under Review with Negative Implications where they were placed on March 28, 2013.
…
Finally, TCC’s financial profile remains reasonable, as capex has been lower than previously anticipated due to the Keystone XL delay, partly offsetting weaker earnings and cash flow in 2012. DBRS believes that the recent weakness in credit metrics, compared with prior periods, was partly due to factors that are not likely to reoccur on an ongoing basis, including the Sundance A power purchase agreement (PPA) force majeure, the increased planned outage days at Bruce Power’s Unit A3 and A4 and the lower-than-expected capacity payments at the Ravenswood natural gas and oil-fired generating facility. DBRS notes that Bruce Power’s Unit 1 and Unit 2 were both placed into commercial service during Q4 2012 following a significant refurbishment program. The Company will likely experience a significant free cash flow deficit once capex on Keystone XL gets underway, if approved, likely resulting in a moderately negative impact on credit metrics prior to improvement in subsequent years as some projects are placed into service and begin to generate cash flow.
It’s not just Standard & Poor’s (see report) that’s pressuring Spectra:
Spectra Energy Corp., which distributes natural gas in Ontario and operates in British Columbia as Westcoast Energy Inc., is facing pressure to spin off its Canadian assets from an activist investor.
In a June 17 letter to Spectra chief executive Greg Ebel, Thomas E. Sandell, chief executive of New York-based Sandell Asset Management, said Spectra should review strategic alternatives for Westcoast, including a potential initial public offering. Spectra should also consider transforming itself into a holding company akin to Kinder Morgan Inc., Williams Companies, Inc. and Oneok, Inc., Sandell said.
Another down day for the Canadian preferred share market – but with a difference! PerpetualPremiums were off 1bp, FixedResets lost 20bp and DeemedRetractibles were down 10bp. FixedResets are prominent in the Performance in the Performance Highlights table, which is comprised entirely of losers. Volume was high.
| 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 | -0.0910 % | 2,569.3 |
| FixedFloater | 4.22 % | 3.55 % | 43,558 | 18.19 | 1 | -4.7821 % | 3,891.3 |
| Floater | 2.73 % | 2.90 % | 80,504 | 19.98 | 4 | -0.0910 % | 2,774.1 |
| OpRet | 4.84 % | 2.41 % | 63,928 | 0.08 | 5 | 0.0312 % | 2,618.0 |
| SplitShare | 4.64 % | 4.13 % | 104,759 | 4.01 | 6 | 0.1186 % | 2,981.3 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.0312 % | 2,393.9 |
| Perpetual-Premium | 5.31 % | 4.87 % | 121,144 | 6.27 | 33 | -0.0115 % | 2,324.0 |
| Perpetual-Discount | 5.33 % | 5.35 % | 235,607 | 14.92 | 5 | -0.3891 % | 2,451.9 |
| FixedReset | 4.95 % | 3.15 % | 238,833 | 3.29 | 81 | -0.2034 % | 2,492.8 |
| Deemed-Retractible | 5.01 % | 4.52 % | 159,329 | 4.76 | 44 | -0.0951 % | 2,405.9 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| BAM.PR.G | FixedFloater | -4.78 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2043-06-18 Maturity Price : 22.82 Evaluated at bid price : 22.50 Bid-YTW : 3.55 % |
| ELF.PR.G | Perpetual-Discount | -1.55 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2043-06-18 Maturity Price : 22.69 Evaluated at bid price : 22.90 Bid-YTW : 5.27 % |
| HSE.PR.A | FixedReset | -1.50 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2043-06-18 Maturity Price : 23.38 Evaluated at bid price : 24.89 Bid-YTW : 3.32 % |
| VNR.PR.A | FixedReset | -1.48 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2017-10-15 Maturity Price : 25.00 Evaluated at bid price : 25.91 Bid-YTW : 3.65 % |
| MFC.PR.G | FixedReset | -1.38 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2016-12-19 Maturity Price : 25.00 Evaluated at bid price : 25.69 Bid-YTW : 3.57 % |
| BAM.PR.X | FixedReset | -1.17 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2043-06-18 Maturity Price : 23.09 Evaluated at bid price : 24.56 Bid-YTW : 3.53 % |
| BNS.PR.K | Deemed-Retractible | -1.10 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2014-04-28 Maturity Price : 25.00 Evaluated at bid price : 25.22 Bid-YTW : 4.53 % |
| CU.PR.G | Perpetual-Premium | -1.04 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2043-06-18 Maturity Price : 23.45 Evaluated at bid price : 23.76 Bid-YTW : 4.77 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| TD.PR.I | FixedReset | 61,350 | RBC crossed 50,000 at 26.25. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-07-31 Maturity Price : 25.00 Evaluated at bid price : 26.24 Bid-YTW : 2.51 % |
| GWO.PR.L | Deemed-Retractible | 58,216 | RBC crossed 50,200 at 26.00. YTW SCENARIO Maturity Type : Call Maturity Date : 2018-12-31 Maturity Price : 25.00 Evaluated at bid price : 26.00 Bid-YTW : 4.81 % |
| TD.PR.K | FixedReset | 56,350 | RBC crossed 50,000 at 26.25. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-07-31 Maturity Price : 25.00 Evaluated at bid price : 26.28 Bid-YTW : 2.37 % |
| GWO.PR.M | Deemed-Retractible | 54,755 | RBC crossed 50,000 at 26.10. YTW SCENARIO Maturity Type : Call Maturity Date : 2019-03-31 Maturity Price : 25.00 Evaluated at bid price : 26.06 Bid-YTW : 4.95 % |
| RY.PR.H | Deemed-Retractible | 54,400 | Called for redemption. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-05-24 Maturity Price : 25.75 Evaluated at bid price : 26.12 Bid-YTW : 4.30 % |
| BAM.PF.D | Perpetual-Discount | 48,845 | Recent new issue. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2043-06-18 Maturity Price : 22.72 Evaluated at bid price : 23.06 Bid-YTW : 5.33 % |
| There were 46 other index-included issues trading in excess of 10,000 shares. | |||
| Wide Spread Highlights | ||
| Issue | Index | Quote Data and Yield Notes |
| MFC.PR.G | FixedReset | Quote: 25.69 – 25.99 Spot Rate : 0.3000 Average : 0.1837 YTW SCENARIO |
| BAM.PR.G | FixedFloater | Quote: 22.50 – 22.90 Spot Rate : 0.4000 Average : 0.3038 YTW SCENARIO |
| MFC.PR.B | Deemed-Retractible | Quote: 23.39 – 23.60 Spot Rate : 0.2100 Average : 0.1232 YTW SCENARIO |
| ENB.PR.D | FixedReset | Quote: 25.19 – 25.48 Spot Rate : 0.2900 Average : 0.2035 YTW SCENARIO |
| ELF.PR.G | Perpetual-Discount | Quote: 22.90 – 23.29 Spot Rate : 0.3900 Average : 0.3165 YTW SCENARIO |
| BNS.PR.K | Deemed-Retractible | Quote: 25.22 – 25.52 Spot Rate : 0.3000 Average : 0.2340 YTW SCENARIO |