S&P downgraded Hydro One today:
•The Government of Ontario recently implemented legislation, requiring Hydro One’s board of directors to establish a new executive compensation framework for the board, CEO, and other executives. The legislation also amends the current Ontario Energy Board Act, requiring the Ontario Energy Board to exclude any compensation paid to the CEO and other executives from consumer rates.
•We consider such action as a governance deficiency related to Hydro One’s ownership structure and are lowering our management and governance (M&G) assessment on Hydro One Ltd. (HOL) and Hydro One Inc. (HOI) to fair from satisfactory.
•At the same time, we are lowering the issuer credit ratings on both HOL and HOI by one notch to ‘A-‘ from ‘A’, reflecting the change in our M&G assessment.
•We are also lowering the issue-level rating on HOI’s senior unsecured debt to ‘A-‘, the rating on its commercial paper program to ‘A-2’, and the global short-term and Canadian National Scale ratings to ‘A-1 (Low)’.•All ratings remain on CreditWatch with negative implications.
Well done, Doug Ford! Does anybody want to try their hand at calculating how much the downgrade may be expected to cost us due to increased interest charges on Hydro One’s debt as it rolls over?:
•Hydro One Inc. currently has $9,923 billion [sic] in public long-term debt outstanding.
| 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 | 1.9422 % | 3,096.1 |
| FixedFloater | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 1.9422 % | 5,681.2 |
| Floater | 3.51 % | 3.69 % | 38,818 | 18.11 | 4 | 1.9422 % | 3,274.1 |
| OpRet | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.0873 % | 3,229.9 |
| SplitShare | 4.61 % | 4.61 % | 57,677 | 4.82 | 5 | 0.0873 % | 3,857.2 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.0873 % | 3,009.6 |
| Perpetual-Premium | 5.54 % | -0.72 % | 50,396 | 0.13 | 12 | 0.0361 % | 2,919.8 |
| Perpetual-Discount | 5.41 % | 5.52 % | 56,894 | 14.54 | 22 | 0.0810 % | 3,005.4 |
| FixedReset Disc | 4.16 % | 4.93 % | 137,931 | 15.72 | 41 | -0.0264 % | 2,578.2 |
| Deemed-Retractible | 5.15 % | 5.92 % | 62,538 | 5.39 | 27 | 0.1277 % | 3,000.7 |
| FloatingReset | 3.31 % | 3.94 % | 40,144 | 5.68 | 5 | 0.3344 % | 2,864.5 |
| FixedReset Prem | 4.84 % | 4.18 % | 173,474 | 2.89 | 35 | 0.1070 % | 2,565.9 |
| FixedReset Bank Non | 3.19 % | 3.57 % | 64,395 | 0.44 | 9 | 0.0271 % | 2,572.5 |
| FixedReset Ins Non | 4.29 % | 5.13 % | 95,442 | 5.46 | 22 | 0.3857 % | 2,574.9 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| BAM.PR.R | FixedReset Disc | -2.27 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-09-13 Maturity Price : 20.58 Evaluated at bid price : 20.58 Bid-YTW : 5.21 % |
| BAM.PF.F | FixedReset Disc | -1.59 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-09-13 Maturity Price : 23.89 Evaluated at bid price : 24.37 Bid-YTW : 5.16 % |
| CU.PR.C | FixedReset Disc | -1.10 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-09-13 Maturity Price : 21.98 Evaluated at bid price : 22.40 Bid-YTW : 4.88 % |
| MFC.PR.R | FixedReset Ins Non | -1.00 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2022-03-19 Maturity Price : 25.00 Evaluated at bid price : 25.72 Bid-YTW : 3.96 % |
| BAM.PR.N | Perpetual-Discount | 1.13 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-09-13 Maturity Price : 20.90 Evaluated at bid price : 20.90 Bid-YTW : 5.70 % |
| TRP.PR.D | FixedReset Disc | 1.24 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-09-13 Maturity Price : 22.22 Evaluated at bid price : 22.95 Bid-YTW : 5.00 % |
| IFC.PR.E | Deemed-Retractible | 1.52 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.05 Bid-YTW : 5.92 % |
| BAM.PR.K | Floater | 1.62 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-09-13 Maturity Price : 17.50 Evaluated at bid price : 17.50 Bid-YTW : 3.69 % |
| BAM.PR.C | Floater | 1.63 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-09-13 Maturity Price : 17.37 Evaluated at bid price : 17.37 Bid-YTW : 3.72 % |
| IFC.PR.C | FixedReset Ins Non | 1.72 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 23.39 Bid-YTW : 5.32 % |
| PWF.PR.A | Floater | 2.00 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-09-13 Maturity Price : 21.42 Evaluated at bid price : 21.42 Bid-YTW : 3.04 % |
| TRP.PR.B | FixedReset Disc | 2.08 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-09-13 Maturity Price : 17.17 Evaluated at bid price : 17.17 Bid-YTW : 4.91 % |
| BAM.PR.B | Floater | 2.50 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-09-13 Maturity Price : 17.52 Evaluated at bid price : 17.52 Bid-YTW : 3.69 % |
| MFC.PR.L | FixedReset Ins Non | 2.66 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 22.80 Bid-YTW : 6.02 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| TD.PF.K | FixedReset Disc | 946,070 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-09-13 Maturity Price : 23.13 Evaluated at bid price : 24.92 Bid-YTW : 4.73 % |
| BIP.PR.F | FixedReset Disc | 154,600 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-09-13 Maturity Price : 23.13 Evaluated at bid price : 24.95 Bid-YTW : 5.06 % |
| BNS.PR.H | FixedReset Prem | 136,300 | YTW SCENARIO Maturity Type : Call Maturity Date : 2022-01-26 Maturity Price : 25.00 Evaluated at bid price : 26.11 Bid-YTW : 3.66 % |
| BMO.PR.S | FixedReset Disc | 56,619 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-09-13 Maturity Price : 22.77 Evaluated at bid price : 23.42 Bid-YTW : 4.83 % |
| CM.PR.Q | FixedReset Disc | 51,300 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-09-13 Maturity Price : 23.41 Evaluated at bid price : 24.48 Bid-YTW : 4.93 % |
| BAM.PR.B | Floater | 33,400 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-09-13 Maturity Price : 17.52 Evaluated at bid price : 17.52 Bid-YTW : 3.69 % |
| There were 10 other index-included issues trading in excess of 10,000 shares. | |||
| Wide Spread Highlights | ||
| Issue | Index | Quote Data and Yield Notes |
| SLF.PR.B | Deemed-Retractible | Quote: 22.74 – 23.50 Spot Rate : 0.7600 Average : 0.4266 YTW SCENARIO |
| BAM.PR.R | FixedReset Disc | Quote: 20.58 – 21.33 Spot Rate : 0.7500 Average : 0.4512 YTW SCENARIO |
| BAM.PF.F | FixedReset Disc | Quote: 24.37 – 24.94 Spot Rate : 0.5700 Average : 0.3452 YTW SCENARIO |
| BAM.PF.B | FixedReset Disc | Quote: 23.50 – 23.90 Spot Rate : 0.4000 Average : 0.2367 YTW SCENARIO |
| SLF.PR.J | FloatingReset | Quote: 20.05 – 20.50 Spot Rate : 0.4500 Average : 0.2931 YTW SCENARIO |
| BAM.PR.X | FixedReset Disc | Quote: 19.06 – 19.49 Spot Rate : 0.4300 Average : 0.2805 YTW SCENARIO |
“Hydro One Inc. currently has $9,923 billion in public long-term debt outstanding.”
Either that comma is supposed to be a dot or that b is supposed to be an m. 😉
Geez, don’t look at me. I just copy-pasted!
But I’ve stuck a “sic” in there, anyway.