Scotiabank will be selling its minority position in CI Financial:
Scotiabank owns 37 per cent of CI Financial Corp., a position now worth $3.8-billion. The country’s third-largest lender intends to “monetize” the stake at a time when wealth managers are in heavy demand and the S&P/TSX composite index nears a record high. Since the start of 2013, CI’s stock has climbed 44 per cent and the company now has $97-billion worth of assets under management.
…
Under the terms of an agreement between the two parties, Scotiabank cannot sell more than 20 per cent of CI to one purchaser. For that reason, the position could either be split up among multiple strategic parties, or could be sold directly to investors through a public offering.
DBRS confirmed FFN.PR.A at Pfd-4(high):
Although downside protection has increased over the past year, the Preferred Share dividend coverage ratio is below 1.0 times and the monthly Class A Share distribution is expected to result in a grind on the portfolio of 4.5% for the remaining six months until maturity. As a result, the rating of the Preferred Shares has been confirmed at Pfd-4 (high).
DBRS is behind the times – the term was extended yesterday.
It was a mixed day for the Canadian preferred share market, with PerpetualDiscounts up 4bp, FixedResets off 7bp and DeemedRetractibles gaining 3bp. Volatility was minimal. Volume was below average.
PerpetualDiscounts now yield 5.24%, equivalent to 6.81% interest at the standard equivalency factor of 1.3x. Long corporates yield about 4.4%, so the pre-tax interest-equivalent spread is now about 240bp, a significant tightening from the 250bp reported May 7.
| HIMIPref™ Preferred Indices These values reflect the December 2008 revision of the HIMIPref™ Indices Values are provisional and are finalized monthly |
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| 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 | 0.2678 % | 2,470.6 |
| FixedFloater | 4.53 % | 3.77 % | 33,479 | 17.89 | 1 | 1.8447 % | 3,791.9 |
| Floater | 2.95 % | 3.09 % | 51,439 | 19.47 | 4 | 0.2678 % | 2,667.6 |
| OpRet | 4.38 % | -6.23 % | 32,203 | 0.13 | 2 | 0.0585 % | 2,709.5 |
| SplitShare | 4.79 % | 4.38 % | 64,338 | 4.16 | 5 | 0.1824 % | 3,099.1 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.0585 % | 2,477.5 |
| Perpetual-Premium | 5.50 % | -11.33 % | 96,857 | 0.09 | 15 | 0.0052 % | 2,405.9 |
| Perpetual-Discount | 5.28 % | 5.24 % | 113,710 | 14.95 | 21 | 0.0444 % | 2,554.0 |
| FixedReset | 4.53 % | 3.51 % | 206,676 | 4.26 | 75 | -0.0731 % | 2,561.3 |
| Deemed-Retractible | 4.98 % | -3.82 % | 142,678 | 0.11 | 42 | 0.0265 % | 2,526.1 |
| FloatingReset | 2.65 % | 2.33 % | 145,024 | 4.05 | 6 | 0.0726 % | 2,495.1 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| SLF.PR.H | FixedReset | -1.09 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2016-09-30 Maturity Price : 25.00 Evaluated at bid price : 25.32 Bid-YTW : 3.56 % |
| GCS.PR.A | SplitShare | 1.50 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2019-07-31 Maturity Price : 25.00 Evaluated at bid price : 24.99 Bid-YTW : 4.10 % |
| BAM.PR.G | FixedFloater | 1.84 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-05-15 Maturity Price : 21.58 Evaluated at bid price : 20.98 Bid-YTW : 3.77 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| BMO.PR.S | FixedReset | 60,608 | Recent new issue. YTW SCENARIO Maturity Type : Call Maturity Date : 2019-05-25 Maturity Price : 25.00 Evaluated at bid price : 25.49 Bid-YTW : 3.64 % |
| MFC.PR.B | Deemed-Retractible | 51,538 | TD crossed 47,000 at 22.93. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 22.83 Bid-YTW : 5.72 % |
| MFC.PR.L | FixedReset | 39,285 | Desjardins crossed 13,000 at 24.95. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.90 Bid-YTW : 3.87 % |
| MFC.PR.G | FixedReset | 37,616 | Scotia crossed 25,200 at 26.05. YTW SCENARIO Maturity Type : Call Maturity Date : 2016-12-19 Maturity Price : 25.00 Evaluated at bid price : 25.99 Bid-YTW : 2.65 % |
| GWO.PR.Q | Deemed-Retractible | 34,910 | RBC bought 30,800 from CIBC at 24.85. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.85 Bid-YTW : 5.33 % |
| POW.PR.D | Perpetual-Discount | 30,738 | Nesbitt crossed 27,100 at 24.00. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-05-15 Maturity Price : 23.70 Evaluated at bid price : 24.00 Bid-YTW : 5.25 % |
| There were 27 other index-included issues trading in excess of 10,000 shares. | |||
| Wide Spread Highlights | ||
| Issue | Index | Quote Data and Yield Notes |
| PWF.PR.K | Perpetual-Discount | Quote: 23.88 – 24.20 Spot Rate : 0.3200 Average : 0.2259 YTW SCENARIO |
| SLF.PR.H | FixedReset | Quote: 25.32 – 25.50 Spot Rate : 0.1800 Average : 0.1071 YTW SCENARIO |
| ENB.PR.A | Perpetual-Premium | Quote: 25.29 – 25.52 Spot Rate : 0.2300 Average : 0.1642 YTW SCENARIO |
| BAM.PF.D | Perpetual-Discount | Quote: 22.42 – 22.59 Spot Rate : 0.1700 Average : 0.1096 YTW SCENARIO |
| TRP.PR.D | FixedReset | Quote: 25.12 – 25.28 Spot Rate : 0.1600 Average : 0.1078 YTW SCENARIO |
| BAM.PF.A | FixedReset | Quote: 26.00 – 26.18 Spot Rate : 0.1800 Average : 0.1319 YTW SCENARIO |