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Today’s Canada inflation release didn’t cause any problems:

Canada’s annual inflation rate slowed to 7.0 per cent in August largely driven by the price of gasoline falling, but the cost of groceries continues to climb.

In its latest monthly consumer price index (CPI) report, Statistics Canada said grocery prices rose at the fastest rate since 1981, with prices up 10.8 per cent compared with a year ago.
…
Statistics Canada said the 0.3 per cent decline in the CPI from July to August is the largest monthly decline since the early months of the pandemic.

The federal agency said transportation and shelter prices drove the deceleration in consumer prices.

Gas prices were up 22.1 per cent in August compared with a year ago, but down 18.8 per cent since June.

The Bank of Canada will be paying close attention to its preferred measures of core inflation, which tend to be less volatile and help the bank see through temporary changes in the consumer price index. Those measures all point to a slowdown in annual inflation in August as well.

The FDIC published a paper by Matthew D. Peppe and Haluk Unal titled Do Municipalities Pay More to Issue Unrated Bonds? :

Approximately 34% of local municipal bond issues were issued without ratings during 1998 to 2017. We study the circumstances that affect the decision to obtain a rating and whether unrated bonds, controlling for observable risk factors, are more expensive to issue than rated bonds. Results show that issuers are less likely to obtain ratings for smaller issues, negotiated offerings, and bonds with high proxies for risk such as coming from areas with low personal income. We estimate the effect of forgoing a rating on offering yields using a doubly-robust Inverse Probability Weighted Regression Adjustment that controls for confounding that arises from risk and other characteristics affecting both the choice to obtain a rating and the yield. We separately analyze revenue bonds, general obligation bonds, bank qualified, and not bank qualified bonds and find ratings decrease offering yields by 47, 49, 60, and 42 basis points respectively. The higher offering yields cost municipalities $22.5B in higher interest expense during our sample period. We find the choice of issuers to forgo ratings despite the substantial potential savings appears to be influenced by the dual underwriters who also work as advisors to the issuer. These underwriters benefit from not obtaining a rating because it lowers the price investors are willing to pay from the bond, but also lowers the price the underwriter must pay the issuer and thus increases the underwriter’s profit.

Gotta love that last line in the abstract!

Enbridge has issued some sub-debt – USD, 50-year term – I haven’t investigated further details.

This entry was posted on Tuesday, September 20th, 2022 at 9:19 pm and is filed under Market Action. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.