CPX.PR.G Closes Steady on Good Volume

Capital Power Corporation has announced:

it has closed its previously announced offering of 8,000,000 Cumulative Minimum Rate Reset Preference Shares, Series 7 (the “Series 7 Shares”) at a price of $25.00 per Series 7 Share for aggregate gross proceeds of $200 million on a bought deal basis with a syndicate of underwriters, led by TD Securities Inc. and CIBC Capital Markets.

The Series 7 Shares will begin trading today on the TSX under the symbol CPX.PR.G.

CPX.PR.G is a FixedReset, 6.00%+526M600, announced September 22. It will be tracked by HIMIPref™ but relegated to the Scraps index on credit concerns. DBRS has rated it Pfd-3(low) [Stable] in line with the corporation’s other preferred share issues.

The issue traded 530,562 shares today in a range of 24.75-00 before closing at 24.99-00, 8×199. Vital statistics are:

Maturity Type : Limit Maturity
Maturity Date : 2046-10-04
Maturity Price : 23.14
Evaluated at bid price : 24.99
Bid-YTW : 5.96 %

Implied Volatility analysis simply leads to a repetition of my previous analysis – this is a very expensive issue.

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