I was pleased to see that Atlantic Power ‘fessed up to their error regarding the reset rate for AZP.PR.B. Very impressive! It isn’t “making no errors” that makes you good; errors happen all the time. It’s recognizing, acknowledging and fixing errors that makes you good.
I just wish Husky Energy was as prompt! I have used their online form to contact Investor Relations:
I would appreciate greater detail regarding the reset rate for HSE.PR.C announced December 2, specifically the Government of Canada 5-Year Bond Yield used as the basis for this calculation.
Can you please tell me the effective date and time that the Government of Canada 5-Year Bond Yield was measured for the purpose of this calculation?
Sincerely,
I urge anybody who has a spare minute today to similarly contact the company to ask this question. This is a brief, simple question regarding a matter of fact and while I appreciate that they have a lot going on at the moment, this is my third eMail to them. First be polite, then be annoying, that’s my motto!
Shaw Communications issued 30-Year Notes today:
Shaw Communications Inc. (“Shaw” or the “Corporation”) announced today the terms of an offering of C$800 million of senior notes, comprised of C$500 million principal amount of 3.30% senior notes due 2029 (the “2029 Notes”) and C$300 million principal amount of 4.25% senior notes due 2049 (the “2049 Notes”, and together with the 2029 Notes, the “Notes”).
SJR.PR.A currently yields 6.59% (equivalent to interest of 8.57%) and SJR.PR.B yields 6.89% (equivalent to interest of 8.96%), based on GOC yields of 1.54% and 1.66% respectively. A Straight Perpetual would probably yield a little less, given the current state of the markets, but that’s quite a spread! No wonder that they – and nobody else, either – aren’t issuing new preferreds!
| HIMIPref™ Preferred Indices These values reflect the December 2008 revision of the HIMIPref™ Indices Values are provisional and are finalized monthly |
|||||||
| 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 | 0.3779 % | 1,973.2 |
| FixedFloater | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.3779 % | 3,620.8 |
| Floater | 6.12 % | 6.33 % | 50,954 | 13.31 | 4 | 0.3779 % | 2,086.7 |
| OpRet | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.2198 % | 3,430.7 |
| SplitShare | 4.65 % | 4.45 % | 44,031 | 3.86 | 7 | 0.2198 % | 4,097.0 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.2198 % | 3,196.7 |
| Perpetual-Premium | 5.55 % | -12.88 % | 55,946 | 0.09 | 10 | -0.1837 % | 3,040.6 |
| Perpetual-Discount | 5.29 % | 5.38 % | 69,203 | 14.79 | 25 | 0.0517 % | 3,265.7 |
| FixedReset Disc | 5.64 % | 5.74 % | 195,234 | 14.27 | 66 | 0.3857 % | 2,088.0 |
| Deemed-Retractible | 5.18 % | 5.26 % | 70,573 | 14.96 | 27 | -0.0141 % | 3,215.5 |
| FloatingReset | 6.32 % | 6.62 % | 129,739 | 13.09 | 2 | 1.1932 % | 2,434.5 |
| FixedReset Prem | 5.12 % | 3.70 % | 131,535 | 1.56 | 20 | -0.0507 % | 2,627.9 |
| FixedReset Bank Non | 1.95 % | 3.99 % | 62,683 | 2.09 | 3 | 0.2337 % | 2,710.1 |
| FixedReset Ins Non | 5.53 % | 5.80 % | 125,460 | 14.21 | 22 | 0.4004 % | 2,118.8 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| TRP.PR.G | FixedReset Disc | -1.41 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-12-05 Maturity Price : 17.45 Evaluated at bid price : 17.45 Bid-YTW : 6.45 % |
| SLF.PR.I | FixedReset Ins Non | -1.16 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-12-05 Maturity Price : 17.94 Evaluated at bid price : 17.94 Bid-YTW : 5.89 % |
| CM.PR.Q | FixedReset Disc | 1.11 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-12-05 Maturity Price : 18.20 Evaluated at bid price : 18.20 Bid-YTW : 5.98 % |
| SLF.PR.G | FixedReset Ins Non | 1.18 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-12-05 Maturity Price : 12.90 Evaluated at bid price : 12.90 Bid-YTW : 5.70 % |
| MFC.PR.R | FixedReset Ins Non | 1.27 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-12-05 Maturity Price : 23.38 Evaluated at bid price : 24.65 Bid-YTW : 5.33 % |
| IFC.PR.A | FixedReset Ins Non | 1.28 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-12-05 Maturity Price : 14.22 Evaluated at bid price : 14.22 Bid-YTW : 5.90 % |
| GWO.PR.N | FixedReset Ins Non | 1.32 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-12-05 Maturity Price : 13.01 Evaluated at bid price : 13.01 Bid-YTW : 5.40 % |
| BAM.PF.E | FixedReset Disc | 1.35 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-12-05 Maturity Price : 16.57 Evaluated at bid price : 16.57 Bid-YTW : 6.32 % |
| BAM.PR.X | FixedReset Disc | 1.39 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-12-05 Maturity Price : 13.10 Evaluated at bid price : 13.10 Bid-YTW : 6.30 % |
| BAM.PF.G | FixedReset Disc | 1.40 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-12-05 Maturity Price : 18.05 Evaluated at bid price : 18.05 Bid-YTW : 6.20 % |
| EMA.PR.C | FixedReset Disc | 1.45 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-12-05 Maturity Price : 17.45 Evaluated at bid price : 17.45 Bid-YTW : 6.25 % |
| PWF.PR.P | FixedReset Disc | 1.59 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-12-05 Maturity Price : 12.75 Evaluated at bid price : 12.75 Bid-YTW : 6.13 % |
| SLF.PR.H | FixedReset Ins Non | 1.68 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-12-05 Maturity Price : 15.75 Evaluated at bid price : 15.75 Bid-YTW : 5.76 % |
| TRP.PR.B | FixedReset Disc | 1.80 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-12-05 Maturity Price : 11.30 Evaluated at bid price : 11.30 Bid-YTW : 6.22 % |
| HSE.PR.E | FixedReset Disc | 1.82 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-12-05 Maturity Price : 17.36 Evaluated at bid price : 17.36 Bid-YTW : 7.38 % |
| MFC.PR.Q | FixedReset Ins Non | 1.86 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-12-05 Maturity Price : 18.61 Evaluated at bid price : 18.61 Bid-YTW : 5.69 % |
| BAM.PF.B | FixedReset Disc | 1.87 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-12-05 Maturity Price : 18.02 Evaluated at bid price : 18.02 Bid-YTW : 6.01 % |
| PWF.PR.A | Floater | 1.98 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-12-05 Maturity Price : 11.86 Evaluated at bid price : 11.86 Bid-YTW : 5.89 % |
| SLF.PR.J | FloatingReset | 2.57 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-12-05 Maturity Price : 12.75 Evaluated at bid price : 12.75 Bid-YTW : 6.02 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| BMO.PR.T | FixedReset Disc | 127,985 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-12-05 Maturity Price : 16.54 Evaluated at bid price : 16.54 Bid-YTW : 5.70 % |
| HSE.PR.A | FixedReset Disc | 116,100 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-12-05 Maturity Price : 10.70 Evaluated at bid price : 10.70 Bid-YTW : 7.50 % |
| GWO.PR.P | Deemed-Retractible | 83,810 | YTW SCENARIO Maturity Type : Call Maturity Date : 2020-01-04 Maturity Price : 25.00 Evaluated at bid price : 25.00 Bid-YTW : 0.72 % |
| RY.PR.Z | FixedReset Disc | 75,658 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-12-05 Maturity Price : 16.88 Evaluated at bid price : 16.88 Bid-YTW : 5.58 % |
| BMO.PR.E | FixedReset Disc | 64,980 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-12-05 Maturity Price : 19.42 Evaluated at bid price : 19.42 Bid-YTW : 5.67 % |
| TRP.PR.E | FixedReset Disc | 62,940 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-12-05 Maturity Price : 15.80 Evaluated at bid price : 15.80 Bid-YTW : 6.18 % |
| There were 68 other index-included issues trading in excess of 10,000 shares. | |||
| Wide Spread Highlights | ||
| Issue | Index | Quote Data and Yield Notes |
| IAF.PR.G | FixedReset Ins Non | Quote: 18.35 – 18.83 Spot Rate : 0.4800 Average : 0.3510 YTW SCENARIO |
| IFC.PR.G | FixedReset Ins Non | Quote: 18.04 – 18.45 Spot Rate : 0.4100 Average : 0.2975 YTW SCENARIO |
| POW.PR.C | Perpetual-Premium | Quote: 25.60 – 25.89 Spot Rate : 0.2900 Average : 0.1809 YTW SCENARIO |
| TRP.PR.G | FixedReset Disc | Quote: 17.45 – 17.83 Spot Rate : 0.3800 Average : 0.2811 YTW SCENARIO |
| POW.PR.D | Perpetual-Discount | Quote: 23.09 – 23.35 Spot Rate : 0.2600 Average : 0.1698 YTW SCENARIO |
| PVS.PR.F | SplitShare | Quote: 25.40 – 25.69 Spot Rate : 0.2900 Average : 0.2055 YTW SCENARIO |
Very interesting again related to the Shaw communications issue.
I’m beginning to think that even if we totally ignore the Dividend Grossing up, preferreds offer a remarkable value.
e.g. IFC.PR.F generates about 5.45% at today’s price. IFC’s 25 year bond is at about 3.3%.
Even if we discard the dividend gross up, the delta is more than 2%.
Does it make up for the extra risk of holding the preferreds?
enjoy it , skeptical , while it lasts . the longer int rates stay down the more likely low int bonds will be sold and the prefs called
Yes…that means we should be buying the low coupon perpetuals as they are the last ones that will get called. Although given the very anemic state of Canadian economy, low or lower rates will persist.
Shaw Communications …. 30 year notes
I find this amusing. Really amusing. In the back of my mind, I wonder if the entity will be around in 30 years given the move to streaming and custom content by portals and the explosion of mobile apps. Just my opinion.
I find this amusing. Really amusing. In the back of my mind, I wonder if the entity will be around in 30 years given the move to streaming and custom content by portals and the explosion of mobile apps. Just my opinion.
And how would this streaming run? Who will provide the bandwidth for mobile and wired transmission? Shaw is one of the few entities that doesn’t have any legacy media operations, perhaps with Telus. Rogers is saddled with old media and Bell is deeply entrenched with Corus. Shaw very smartly sold Corus and picked up Freedom. I think that was one of the best swaps done in Canadian businesses in the recent memory.
Shaw owns the internet backbone in Western Canada along with a rapidly growing Freedom mobile carrier which could become a viable competitor in the next decade. Credit rating agencies tend to agree with that as reported here a few days ago.
Short of any Foreign major entry in the telecom arena, IMHO Shaw will only get stronger from here.
A realistic possibility- Shaw gets bought out by the Big 3 for a hefty premium while CRTC keeps on doing what it does the best- Snooze. 🙂
“No wonder that they – and nobody else, either – aren’t issuing new preferreds!”
I’ve been intrigued by this for a few months. We have to go back to May to see a new issue.
I started tracking the total number of preferred shares extant on the TSX in early October with the idea that I might see a steady decline in outstanding sharees (NCIBs, SIBs, etc.). Only the overnight marketing of DFN.PR.A in late October has increased the share count during this time. Despite some shrinkage, the overall market (by my count) has risen 0.05% since Oct. 13th due to this issue.
It seems to me that falling or flat supply, coupled with some new demand (perhaps those GIC refugees or the nascent international interest mentioned recently by James) ought to improving pricing in the market.