TXPR closed at 635.45, up 0.96% on the day. Volume today was 2.22-million, third-highest of the past 21 trading days.
CPD closed at 12.45, up 0.24% on the day. Volume was 34,180, lowest of the past 21 trading days.
ZPR closed at 10.47 up 0.48% on the day. Volume of 129,610 was below the median of the past 21 trading days.
Five-year Canada yields were down to 2.65% today.
The SEC is proposing a new rule on fund names:
The Securities and Exchange Commission (the “Commission”) is proposing to amend the rule under the Investment Company Act of 1940 (the “Investment Company Act” or the “Act”) that addresses certain broad categories of investment company names that are likely to mislead investors about an investment company’s investments and risks. The proposed amendments to this rule are designed to increase investor protection by improving and clarifying the requirement for certain funds to adopt a policy to invest at least 80% of their assets in accordance with the investment focus that the fund’s name suggests, updating the rule’s notice requirements, and establishing recordkeeping requirements. The Commission also is proposing enhanced prospectus disclosure requirements for terminology used in fund names, and additional requirements for funds to report information on Form N-PORT regarding compliance with the proposed names-related regulatory requirements.
As far as I can tell though, hedge funds will not be required to change their names to ‘levered up to hell ‘n’ gone’ funds.
In the Frozen North, Blake’s provides Ten Securities Law Fun Facts:
Unlike in the U.S., it is still the case in Canada that posting of material information to an issuer’s website “will not, by itself, be likely to satisfy the “generally disclosed requirement”, meaning that material information should always be first published by way of a press release issued over a newswire (which can be much more expensive than a posting on a company’s own website). Further to National Policy 51-201 Disclosure Standards, as currently drafted: “Investors’ access to the Internet is not yet sufficiently widespread such that a Web site posting alone would be a means of dissemination ‘calculated to effectively reach the marketplace’” and “As technology evolves and as more investors gain access to the Internet, it may be that postings to certain companies’ Web sites alone could satisfy the ‘generally disclosed’ requirement.”
…
The Ontario securities law compendium text colloquially known as the “blue book” weighed 4.0lbs in 2004, while the current edition weighs 7.8lbs. Also, while on the topic of “blue”, there is scientific evidence that, until modern times, humans did not actually see the colour blue, meaning that from an anthropocentric perspective, blue did not exist.
We can hope that at some time, enough investors will have gained access to the Internet to allow website posts to meet the ‘generally disclosed’ requirement. But it may take a while, given the expense highlighted by MobileSyrup.com:
The study examined the cost for 135 countries and based life expectancy on the global average of 72 years. Canada lands at 103 on the list, which shows residents will spend an average of $67 a month on the service. Out of the countries examined, only 32 countries charge residents more for internet access.
DBRS has rated some new LRCNs, but I have no further information:
DBRS Limited (DBRS Morningstar) assigned a provisional rating of BBB (high) with a Stable trend to iA Financial Corporation Inc.’s (iA or the Company) Limited Recourse Capital Notes Series 2022-1 and a provisional rating of Pfd-2 with a Stable trend to the Company’s Non-Cumulative Preferred Shares Series A.
PerpetualDiscounts now yield 5.84%, equivalent to 7.59% interest at the standard equivalency factor of 1.3x. Long corporates now yield 4.97%, so the pre-tax interest-equivalent spread (in this context, the “Seniority Spread”) has narrowed to 260bp from the 270bp reported May 18.
| 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 | 3.96 % | 4.63 % | 18,125 | 18.11 | 1 | -0.6111 % | 2,548.5 |
| FixedFloater | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.0744 % | 4,952.8 |
| Floater | 4.17 % | 4.16 % | 40,868 | 17.02 | 3 | 0.0744 % | 2,854.3 |
| OpRet | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.4754 % | 3,514.6 |
| SplitShare | 4.84 % | 5.15 % | 39,362 | 3.24 | 8 | 0.4754 % | 4,197.2 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.4754 % | 3,274.8 |
| Perpetual-Premium | 5.90 % | 5.96 % | 68,030 | 13.92 | 1 | 0.0000 % | 2,958.2 |
| Perpetual-Discount | 5.75 % | 5.84 % | 61,686 | 14.13 | 35 | 0.4136 % | 3,231.4 |
| FixedReset Disc | 4.59 % | 5.79 % | 121,956 | 14.28 | 59 | 0.3433 % | 2,544.4 |
| Insurance Straight | 5.67 % | 5.85 % | 90,835 | 14.03 | 20 | 0.6375 % | 3,161.3 |
| FloatingReset | 4.74 % | 5.13 % | 56,902 | 15.20 | 2 | 0.3120 % | 2,609.5 |
| FixedReset Prem | 5.10 % | 5.11 % | 122,093 | 2.05 | 9 | 0.1607 % | 2,586.7 |
| FixedReset Bank Non | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.3433 % | 2,600.9 |
| FixedReset Ins Non | 4.45 % | 5.71 % | 71,693 | 14.56 | 15 | 0.5284 % | 2,696.2 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| TRP.PR.D | FixedReset Disc | -6.63 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-05-25 Maturity Price : 18.30 Evaluated at bid price : 18.30 Bid-YTW : 6.79 % |
| TRP.PR.E | FixedReset Disc | -1.50 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-05-25 Maturity Price : 19.06 Evaluated at bid price : 19.06 Bid-YTW : 6.41 % |
| BAM.PR.T | FixedReset Disc | -1.08 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-05-25 Maturity Price : 18.40 Evaluated at bid price : 18.40 Bid-YTW : 6.40 % |
| POW.PR.C | Perpetual-Discount | 1.01 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-05-25 Maturity Price : 24.68 Evaluated at bid price : 25.00 Bid-YTW : 5.87 % |
| BNS.PR.I | FixedReset Disc | 1.01 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-05-25 Maturity Price : 23.52 Evaluated at bid price : 23.90 Bid-YTW : 5.35 % |
| CCS.PR.C | Insurance Straight | 1.04 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-05-25 Maturity Price : 22.12 Evaluated at bid price : 22.40 Bid-YTW : 5.66 % |
| GWO.PR.Q | Insurance Straight | 1.09 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-05-25 Maturity Price : 22.06 Evaluated at bid price : 22.35 Bid-YTW : 5.85 % |
| BIP.PR.A | FixedReset Disc | 1.11 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-05-25 Maturity Price : 22.30 Evaluated at bid price : 22.80 Bid-YTW : 6.42 % |
| CU.PR.J | Perpetual-Discount | 1.18 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-05-25 Maturity Price : 20.54 Evaluated at bid price : 20.54 Bid-YTW : 5.81 % |
| GWO.PR.N | FixedReset Ins Non | 1.21 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-05-25 Maturity Price : 14.22 Evaluated at bid price : 14.22 Bid-YTW : 6.19 % |
| BAM.PR.N | Perpetual-Discount | 1.22 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-05-25 Maturity Price : 20.75 Evaluated at bid price : 20.75 Bid-YTW : 5.82 % |
| BMO.PR.E | FixedReset Disc | 1.22 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-05-25 Maturity Price : 23.63 Evaluated at bid price : 24.04 Bid-YTW : 5.53 % |
| POW.PR.D | Perpetual-Discount | 1.25 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-05-25 Maturity Price : 21.54 Evaluated at bid price : 21.80 Bid-YTW : 5.80 % |
| MIC.PR.A | Perpetual-Discount | 1.39 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-05-25 Maturity Price : 21.58 Evaluated at bid price : 21.90 Bid-YTW : 6.26 % |
| PWF.PF.A | Perpetual-Discount | 1.40 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-05-25 Maturity Price : 20.30 Evaluated at bid price : 20.30 Bid-YTW : 5.61 % |
| BMO.PR.T | FixedReset Disc | 1.40 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-05-25 Maturity Price : 21.00 Evaluated at bid price : 21.00 Bid-YTW : 5.68 % |
| CM.PR.S | FixedReset Disc | 1.54 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-05-25 Maturity Price : 23.05 Evaluated at bid price : 23.72 Bid-YTW : 5.39 % |
| GWO.PR.G | Insurance Straight | 1.57 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-05-25 Maturity Price : 22.33 Evaluated at bid price : 22.60 Bid-YTW : 5.84 % |
| TRP.PR.C | FixedReset Disc | 1.95 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-05-25 Maturity Price : 13.56 Evaluated at bid price : 13.56 Bid-YTW : 6.84 % |
| TRP.PR.A | FixedReset Disc | 2.06 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-05-25 Maturity Price : 16.84 Evaluated at bid price : 16.84 Bid-YTW : 6.63 % |
| PVS.PR.I | SplitShare | 2.11 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-10-31 Maturity Price : 25.00 Evaluated at bid price : 24.71 Bid-YTW : 5.10 % |
| MFC.PR.N | FixedReset Ins Non | 2.15 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-05-25 Maturity Price : 20.40 Evaluated at bid price : 20.40 Bid-YTW : 5.84 % |
| IAF.PR.B | Insurance Straight | 2.17 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-05-25 Maturity Price : 21.86 Evaluated at bid price : 22.10 Bid-YTW : 5.27 % |
| RY.PR.Z | FixedReset Disc | 2.41 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-05-25 Maturity Price : 21.25 Evaluated at bid price : 21.25 Bid-YTW : 5.62 % |
| GWO.PR.Y | Insurance Straight | 2.77 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-05-25 Maturity Price : 20.05 Evaluated at bid price : 20.05 Bid-YTW : 5.71 % |
| IFC.PR.A | FixedReset Ins Non | 2.81 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-05-25 Maturity Price : 19.40 Evaluated at bid price : 19.40 Bid-YTW : 5.71 % |
| BMO.PR.Y | FixedReset Disc | 2.83 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-05-25 Maturity Price : 21.45 Evaluated at bid price : 21.80 Bid-YTW : 5.67 % |
| NA.PR.S | FixedReset Disc | 6.34 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-05-25 Maturity Price : 21.45 Evaluated at bid price : 21.80 Bid-YTW : 5.71 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| IAF.PR.G | FixedReset Ins Non | 318,667 | YTW SCENARIO Maturity Type : Call Maturity Date : 2022-06-30 Maturity Price : 25.00 Evaluated at bid price : 25.16 Bid-YTW : 2.95 % |
| TD.PF.M | FixedReset Prem | 26,260 | YTW SCENARIO Maturity Type : Call Maturity Date : 2024-07-31 Maturity Price : 25.00 Evaluated at bid price : 25.00 Bid-YTW : 5.30 % |
| CM.PR.R | FixedReset Disc | 26,005 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-05-25 Maturity Price : 24.08 Evaluated at bid price : 24.93 Bid-YTW : 6.07 % |
| PWF.PR.K | Perpetual-Discount | 22,268 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-05-25 Maturity Price : 21.17 Evaluated at bid price : 21.17 Bid-YTW : 5.92 % |
| PWF.PR.G | Perpetual-Premium | 21,587 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-05-25 Maturity Price : 24.68 Evaluated at bid price : 25.00 Bid-YTW : 5.96 % |
| GWO.PR.Y | Insurance Straight | 15,515 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-05-25 Maturity Price : 20.05 Evaluated at bid price : 20.05 Bid-YTW : 5.71 % |
| There were 22 other index-included issues trading in excess of 10,000 shares. | |||
| Wide Spread Highlights | ||
| Issue | Index | Quote Data and Yield Notes |
| SLF.PR.H | FixedReset Ins Non | Quote: 19.25 – 23.64 Spot Rate : 4.3900 Average : 2.7910 YTW SCENARIO |
| BAM.PF.A | FixedReset Disc | Quote: 23.14 – 25.85 Spot Rate : 2.7100 Average : 1.6110 YTW SCENARIO |
| PWF.PR.P | FixedReset Disc | Quote: 14.80 – 17.14 Spot Rate : 2.3400 Average : 1.4135 YTW SCENARIO |
| GWO.PR.R | Insurance Straight | Quote: 20.77 – 22.64 Spot Rate : 1.8700 Average : 1.2096 YTW SCENARIO |
| TRP.PR.E | FixedReset Disc | Quote: 19.06 – 21.00 Spot Rate : 1.9400 Average : 1.3753 YTW SCENARIO |
| RY.PR.N | Perpetual-Discount | Quote: 23.85 – 25.20 Spot Rate : 1.3500 Average : 0.8364 YTW SCENARIO |
The new industrial alliance lrcn with 60 year term yields 6.61%, pre tax. The dividend equivalent is about 5.05 to 5.1%.
Which means all the perpetuals yielding more than 5.5 to 5.8% are still a steal.
What will change this?
Higher yields and widening spreads.
The lrcn is rate reset with a spread of 4.0%. So comparisons with perpetuals are not valid.
Here’s the press release that got in the email:
– iA Financial Corporation Inc. (the “Company”) announced today that it intends to issue $250 million aggregate principal amount of 6.611% Limited Recourse Capital Notes Series2022-1 (Subordinated Indebtedness) (the “Notes”) due June 30, 2082 (the “Offering”).
The Notes will mature on June 30, 2082. Interest on the Notes at the rate of 6.611% per annum will be payable in semi-annual installments in arrears on June 30 and December 31 in each year, commencing on December 31, 2022 and continuing until June 30, 2027. Starting on June 30, 2027 and on every fifth anniversary of such date thereafter until June 30, 2077 (each such date an “Interest Reset Date”), the interest rate on the Notes will be reset at an interest rate per annum equal to the prevailing 5-year Government of Canada Yield on the business day prior to such Interest Reset Date, plus 4.00%.
In connection with the issuance of the Notes, the Company will issue 250,000 Non-Cumulative 5-Year Rate Reset Class A Preferred Shares, Series A (the “Series A Shares”). These shares will be held by Computershare Trust Company of Canada, as trustee of a newly formed trust (the “Limited Recourse Trust”). In the event of a non-payment of interest or of the principal amount on the Notes when due, the recourse of each holder of Notes shall be limited to that holder’s pro rata share of the assets of the Limited Recourse Trust, which assets will consist of the Series A Shares, except in certain limited circumstances.
Subject to the prior approval of the Autorité des marchés financiers, the Company may, on June 30, 2027 and every five years thereafter during the period from May 31 to and including June 30, redeem the Notes, in whole or in part, on not less than 10 days’ and not more than 60 days’ prior written notice from the Company, at a redemption price which is equal to the aggregate of the principal amount of the Notes to be redeemed and any accrued and unpaid interest on such Notes up to, but excluding, the date of the redemption.
The Offering is being done on a best efforts agency basis by a syndicate of agents co-led by RBC Capital Markets, TD Securities and National Bank Financial Markets.
The lrcn is rate reset with a spread of 4.0%. So comparisons with perpetuals are not valid.
Here’s the press release:
– iA Financial Corporation Inc. (the “Company”) announced today that it intends to issue $250 million aggregate principal amount of 6.611% Limited Recourse Capital Notes Series2022-1 (Subordinated Indebtedness) (the “Notes”) due June 30, 2082 (the “Offering”).
The Notes will mature on June 30, 2082. Interest on the Notes at the rate of 6.611% per annum will be payable in semi-annual installments in arrears on June 30 and December 31 in each year, commencing on December 31, 2022 and continuing until June 30, 2027. Starting on June 30, 2027 and on every fifth anniversary of such date thereafter until June 30, 2077 (each such date an “Interest Reset Date”), the interest rate on the Notes will be reset at an interest rate per annum equal to the prevailing 5-year Government of Canada Yield on the business day prior to such Interest Reset Date, plus 4.00%.
In connection with the issuance of the Notes, the Company will issue 250,000 Non-Cumulative 5-Year Rate Reset Class A Preferred Shares, Series A (the “Series A Shares”). These shares will be held by Computershare Trust Company of Canada, as trustee of a newly formed trust (the “Limited Recourse Trust”). In the event of a non-payment of interest or of the principal amount on the Notes when due, the recourse of each holder of Notes shall be limited to that holder’s pro rata share of the assets of the Limited Recourse Trust, which assets will consist of the Series A Shares, except in certain limited circumstances.
Subject to the prior approval of the Autorité des marchés financiers, the Company may, on June 30, 2027 and every five years thereafter during the period from May 31 to and including June 30, redeem the Notes, in whole or in part, on not less than 10 days’ and not more than 60 days’ prior written notice from the Company, at a redemption price which is equal to the aggregate of the principal amount of the Notes to be redeemed and any accrued and unpaid interest on such Notes up to, but excluding, the date of the redemption.
The Offering is being done on a best efforts agency basis by a syndicate of agents co-led by RBC Capital Markets, TD Securities and National Bank Financial Markets.
[…] mentioned a new LRCN issued by iA Financial yesterday, but had no further information. A press release has been issued; Assiduous Reader skeptical has […]
[…] PerpetualDiscounts now yield 5.67%, equivalent to 7.37% interest at the standard equivalency factor of 1.3x. Long corporates now yield 4.88%, so the pre-tax interest-equivalent spread (in this context, the “Seniority Spread”) has narrowed to 250bp from the 260bp reported May 25. […]