As earlier reported on PrefBlog, there was a 50% conversion from the FixedReset, SLF.PR.G, to the FloatingReset SLF.PR.J
SLF.PR.G will pay 2.275% (on its par value of $25), or $0.142188 per share per quarter, until its next exchange date of 2020-6-30. SLF.PR.J will pay the three month Canada treasury bill rate, plus 141bp, reset quarterly, throughout its existence.
As both of these issues are issued by an insurance holding company and neither has an NVCC clause, I have added a DeemedMaturity entry to the call schedule; I am therefore assuming that these will be called at par on or before 2025-6-30. See the heading “DeemedRetractibles” on the Format of PrefLetter page for more information. Please note carefully that this is the result of my analysis and is neither a binding commitment of the issuer nor guaranteed in any way.
Vital statistics are:
| SLF.PR.G | FixedReset | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 16.27 Bid-YTW : 7.48 % |
| SLF.PR.J | FloatingReset | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 16.50 Bid-YTW : 7.31 % |
At the indicated bid prices, the break-even three-month bill rate (the average bill rate at which the total return of the two elements of the Strong Pair will be equal until the next Exchange Date) is 1.08%, so far above the average for all investment grade FixedReset / FloatingReset Strong Pairs (irrespective of Exchange Date) of 0.36% that this pair constitutes an outlier. If the average rate exceeds 1.08% then SLF.PR.J will outperform SLF.PR.G over the period (measured from today’s bid prices).
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Could this issue, SLF.PR.J, be added to prefinfo.com? Also SLF.PR.F could be highlighted in red on that site as it has been redeemed.