Monday’s settlement of RY.PR.L provided one data point and here’s another … it looks like we may state fairly conclusively that the market is currently pricing the Fixed Reset issues as if the market price will be $25 at the time of the first call – whether that is due to a call or a reset of the dividend to a market comparable number.
| TD.PR.C and some comparators | |||||
| Ticker | Fixed | Reset | Quote | Yield to 5-year call |
Yield to limitMaturity |
| TD.PR.C | 5.60% | +274bp | 25.00-01 | 5.64% | 5.59% |
| RY.PR.L | 5.60% | +267bp | 24.92-95 | 5.71% | 5.57% |
| TD.PR.Y | 5.10% | +168bp | 23.92-09 | 6.13% | 4.89% |
| RY.PR.I | 5.00% | +193bp | 23.61-99 | 6.42% | 5.17% |
| TD.PR.A | 5.00% | +196bp | 23.80-00 | 6.27% | 5.15% |
| TD.PR.S | 5.00% | +160bp | 24.05-28 | 5.94% | 4.76% |
The issue seems to have been well-received: I updated the issue announcement post with news that the greenshoe had been partially exercised.
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