A Subdued Opening for CM.PR.I

CM.PR.I, the new issue discussed November 6, commenced trading today and closed at $24.91-92 on volume of 288,892 shares, having traded in the range 24.89-99 throughout the day.

It is a little difficult to understand why the issue did not rise on the first day, as it appears to be attractive by a wide variety of measures, but such is life in the preferred market! Nothing ever works exactly as expected!

In the earlier post, I compared the issue to the roughly comparable CM.PR.H, so I’ll update that comparison now and we’ll see what we see!

Changes from the November 6 calculation in brackets
Base Rate 24.05 (+0.03) 23.78 (-0.05)
Price due to short-term 0.08 (-0.01) 0.09 (-0.01)
Price due to long-term 0.59 (+0.07) 0.57 (+0.09)
Price due to error 0.02 (Unch) 0.02 (+0.01)
Price due to Credit Spread (Low) -0.54 (Unch) -0.53 (-0.04)
Intrinsic (subject to rounding error) 24.20 (+0.09) 23.93 (Unch)
Price due to Liquidity 1.60 (+0.02) 1.56 (-0.02)
Total (subject to rounding error) $25.79 (+0.10) $25.49 (-0.02)

The CM.PR.H closed at 25.38-50, 10×73, today, so the CM.PR.I has some company in looking cheap!

As one can see, the curve moved against the new issue in the week or so since the last analysis and now “likes” the slightly greater dividend (and hence chance of call) of the CM.PR.H more than it did.

To look at this more closely, we can examine the output from the optionCashFlowEffectAnalysisBox, which I’ll blog about at some future date.

CM.PR.I has been added to the HIMIPref™ database with the securityCode A42018, replacing the “PreIssue” code of P50007.

17 Responses to “A Subdued Opening for CM.PR.I”

  1. […] PrefBlog Canadian Preferred Shares – Data and Discussion « A Subdued Opening for CM.PR.I […]

  2. […] A new issue, that traded more on its second day of trading than on its first! “What’s up with CM.PR.I?” my correspondent today asked. To which I answer: “Yield!”. That’s the nice thing about fixed-income. Something’s always up. The issue closed today at $24.83-89, 20×252, so there are a lot of people willing to sell the issue at a discount from issue price (or, I should say, at least one person with a lot of shares!) The question regarding why it’s not trading at a premium puzzles me, quite frankly. Look at the Portfolio Evaluation for the Perpetual Premium Index. You’ve got a Sunlife issue there, rated Pfd-1(low) by DBRS, trading just a hair lower (in pre-tax YTW terms) than the IAG.PR.A – which are only Pfd-2(high) and have a much lower volume. The CM.PR.I are not only trading with a higher YTW than the Industrial Alliance issue, but are only six basis points lower-yielding (six PRE-TAX basis points!) than the WN.PR.E, which is only Pfd-2(low). It’s all rather odd, really, but I’ll take a stab at providing not just one, but two explanations:  […]

  3. […] The new issue continues to lead the volume list. […]

  4. […] Another recent new issue, closing with a bid-YTW of 4.74%. An attractive issue at $24.88-90. […]

  5. […] A recent new issue, closed at 24.89-94 for a pre-tax bid-YTW of 4.74% […]

  6. […] Desjardins crossed 100,000 at $27.15, then another 51,600 at the same price about three and have hours later. I’d like to meet the purchaser, shake his hand, take him out to dinner, talk a little business and maybe sell him the rights to the Toronto Airport Bridge. The pre-tax bid-YTW is 1.97% based on a bid of $26.95 and a call 2008-5-30 at $25.75. The purchaser may be hoping it hangs on until its softMaturity 2013-4-29 at $25.00, at which point it will have yielded 3.77%, but really! The thing pays $1.238 and CIBC just issued a perpetual that paid only 1.175. You can stretch a point, talk about the savings that CIBC will realize by waiting, adjust the “effective cost” … but to get what? 3.77% at the bid? There’s other fish in the sea. Comparable yields computed from the closing ask price of $27.19 are 1.34% and 3.60%. […]

  7. […] Recent new issue, pre-tax bid-YTW of 4.66% based on a bid of $25.20 and a call 2016-3-1 at $25.00. […]

  8. […] Boring recent new issue. Now with a pre-tax bid-YTW of 4.63% based on a call 2016-3-1 and a bid of 25.26 […]

  9. […] Recent new issue, pre-tax bid-YTW now 4.63% based on a bid of $25.27 and a call at $25.00 2016-3-1. […]

  10. […] Recent new issue. Pre-tax bid-YTW of 4.61% based on a bid of 25.31 and a call on 2016-3-1 at 25.00 […]

  11. […] Recent new issue. Now with a pre-tax bid-YTW of 4.57% based on a bid of $25.40 and a call 2016-3-1 at $25.00 […]

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