SJR.PR.B, the new FloatingReset that has come into existence via partial exchange from SJR.PR.A, is now trading.
The 17% conversion rate has been reported previously; Assiduous Readers will remember that I recommended against conversion. SJR.PR.A now pays 2.791% (on par) until 2021-6-30, while SJR.PR.B will pay 3-month bills +200bp, reset quarterly.
SJR.PR.B closed July 4 with a quote of 12.01-50, 7×3. Surprisingly, 1,687 shares traded in a range of 12.30-00.
Vital statistics are:
| SJR.PR.A | FloatingReset | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2046-07-04 Maturity Price : 13.26 Evaluated at bid price : 13.26 Bid-YTW : 4.98 % |
| SJR.PR.B | FloatingReset | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2046-07-04 Maturity Price : 12.01 Evaluated at bid price : 12.01 Bid-YTW : 5.23 % |
The $1.25 price difference between the two elements of the Strong Pair (I told you not to convert!) implies a break-even three-month bill rate of -1.03% – at the low end of the range defined by the other junk Strong Pairs.
Click for Big