TXPR closed at 548.21, down 1.38% on the day. Volume today was 1.51-million, tied for third-highest of the past 21 trading days.
That’s below all-time low for the TXPR price index, barring the depths of the COVID Catastrophe:
The prior non-COVID low close was reached on 2016-1-18, with TXPR at 549.26. This is wild. And at a time when widespread and substantial dividend increases are as certain as anything ever gets in this wicked world! We can argue about how widespread and how substantial, but really!
CPD closed at 10.95, down 1.00% on the day. Volume was 99,270, near the median of the past 21 trading days.
ZPR closed at 9.16, down 1.19% on the day. Volume was 230,090, well above the median of the past 21 trading days.
Five-year Canada yields were up slightly to 3.62% today.
US inflation numbers came in high:
Prices continued to climb at a brutally rapid pace in September, with a key inflation index increasing at the fastest rate in 40 years, bad news for the Federal Reserve as it struggles to wrestle the cost of living back under control.
Overall inflation climbed 8.2 percent over the year through September, according to the latest Consumer Price Index report on Thursday, a slight moderation from August but more than what economists had expected.
Even more worrisome, underlying inflation trends are headed in the wrong direction. After stripping out fuel and food — which are volatile and removed to get a better sense of the trajectory — prices climbed 6.6 percent over the year through September. That was the quickest rate since 1982.
…
While wages are not climbing quickly enough to keep up with inflation, they are rising much more rapidly than is typical. Average hourly earnings for rank-and-file workers climbed 5.8 percent over the year through September. Those pay gains hovered around 2 percent or 3 percent in the decade leading up to the pandemic.It is not just service costs increasing. Grocery bills were up across the board in September, with increases in the cost of fruit, vegetables and bakery products. The price of apples rose 5 percent from the previous month, while lettuce gained 6.8 percent and flour 2 percent.
Meanwhile, there was good fiscal news in Ottawa:
Parliamentary Budget Officer Yves Giroux says in a new report that this year’s federal budget deficit is on pace to come in at $25.8-billion, which would be a significant improvement over the $52.8-billion estimate in the Liberal government’s April budget.
The independent officer of Parliament released an economic and fiscal outlook Thursday. The report updates projections for federal spending and revenue in light of the latest economic data and federal spending announcements, including the Liberals’ recently announced $4.6-billion affordability plan aimed at assisting low-income Canadians with higher costs of living.
While higher inflation and a relatively strong economy have boosted federal tax revenues above previous projections, higher interest rates are also forcing Ottawa to spend more to service the higher debt load that built up during the COVID-19 pandemic.
“Despite the projected decline in the budgetary deficit, public debt charges are projected to more than double from their 2020-21 level (of $20.4-billion), reaching $47.6-billion in 2027-28 due to higher interest rates and the additional accumulation of debt,” the report states.
Well, we can hope that this windfall revenue doesn’t immediately get spent, but I don’t advise counting on it. Never mind the fact that fiscal policy is currently diametrically opposed to monetary policy – we are all Albertans now. If you got it, spend it! Politicians of all stripes will be quick to bleat that the debt to GDP ratio is going down (or is at least projected to) – but nobody in their right mind considers that impressive. If a COVID-level public spending emergency explodes next week, do we have the financial capacity to cope with it? I doubt it – but nobody’s talking about the pain it will take to regain that flexibility. Pain requires the immediate prospect of a failed bond auction, like in 1994.
| 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 | -0.5348 % | 2,323.8 |
| FixedFloater | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.5348 % | 4,457.0 |
| Floater | 7.89 % | 7.96 % | 42,692 | 11.43 | 2 | -0.5348 % | 2,568.6 |
| OpRet | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.0303 % | 3,386.4 |
| SplitShare | 4.96 % | 6.51 % | 34,002 | 3.06 | 7 | 0.0303 % | 4,044.1 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.0303 % | 3,155.4 |
| Perpetual-Premium | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.8036 % | 2,596.1 |
| Perpetual-Discount | 6.56 % | 6.68 % | 72,109 | 12.98 | 33 | -0.8036 % | 2,830.9 |
| FixedReset Disc | 5.43 % | 7.68 % | 92,702 | 12.12 | 63 | -0.9665 % | 2,203.7 |
| Insurance Straight | 6.54 % | 6.65 % | 79,088 | 13.00 | 19 | -1.1411 % | 2,750.7 |
| FloatingReset | 8.98 % | 9.36 % | 36,152 | 10.08 | 2 | 0.3322 % | 2,451.2 |
| FixedReset Prem | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.9665 % | 2,332.3 |
| FixedReset Bank Non | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.9665 % | 2,252.6 |
| FixedReset Ins Non | 5.55 % | 8.03 % | 43,114 | 11.84 | 14 | 0.1288 % | 2,282.4 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| IFC.PR.E | Insurance Straight | -8.14 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-10-13 Maturity Price : 19.75 Evaluated at bid price : 19.75 Bid-YTW : 6.65 % |
| RY.PR.J | FixedReset Disc | -7.60 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-10-13 Maturity Price : 18.11 Evaluated at bid price : 18.11 Bid-YTW : 8.05 % |
| BMO.PR.E | FixedReset Disc | -4.04 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-10-13 Maturity Price : 21.16 Evaluated at bid price : 21.16 Bid-YTW : 7.42 % |
| TD.PF.D | FixedReset Disc | -3.77 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-10-13 Maturity Price : 19.15 Evaluated at bid price : 19.15 Bid-YTW : 7.57 % |
| RY.PR.H | FixedReset Disc | -3.67 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-10-13 Maturity Price : 18.35 Evaluated at bid price : 18.35 Bid-YTW : 7.71 % |
| BAM.PR.X | FixedReset Disc | -3.44 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-10-13 Maturity Price : 15.16 Evaluated at bid price : 15.16 Bid-YTW : 8.56 % |
| BAM.PF.D | Perpetual-Discount | -3.14 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-10-13 Maturity Price : 18.50 Evaluated at bid price : 18.50 Bid-YTW : 6.70 % |
| GWO.PR.Y | Insurance Straight | -3.13 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-10-13 Maturity Price : 17.00 Evaluated at bid price : 17.00 Bid-YTW : 6.69 % |
| BAM.PR.R | FixedReset Disc | -2.95 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-10-13 Maturity Price : 13.50 Evaluated at bid price : 13.50 Bid-YTW : 9.59 % |
| BAM.PR.T | FixedReset Disc | -2.81 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-10-13 Maturity Price : 14.19 Evaluated at bid price : 14.19 Bid-YTW : 9.24 % |
| TD.PF.K | FixedReset Disc | -2.78 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-10-13 Maturity Price : 21.00 Evaluated at bid price : 21.00 Bid-YTW : 7.29 % |
| CU.PR.J | Perpetual-Discount | -2.75 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-10-13 Maturity Price : 17.70 Evaluated at bid price : 17.70 Bid-YTW : 6.83 % |
| CU.PR.C | FixedReset Disc | -2.63 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-10-13 Maturity Price : 18.91 Evaluated at bid price : 18.91 Bid-YTW : 7.73 % |
| IFC.PR.I | Perpetual-Discount | -2.36 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-10-13 Maturity Price : 21.63 Evaluated at bid price : 21.93 Bid-YTW : 6.20 % |
| TD.PF.C | FixedReset Disc | -2.33 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-10-13 Maturity Price : 18.02 Evaluated at bid price : 18.02 Bid-YTW : 7.71 % |
| TD.PF.E | FixedReset Disc | -2.31 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-10-13 Maturity Price : 19.44 Evaluated at bid price : 19.44 Bid-YTW : 7.49 % |
| CU.PR.I | FixedReset Disc | -2.27 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2025-12-01 Maturity Price : 25.00 Evaluated at bid price : 23.65 Bid-YTW : 6.66 % |
| BMO.PR.T | FixedReset Disc | -2.20 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-10-13 Maturity Price : 18.19 Evaluated at bid price : 18.19 Bid-YTW : 7.75 % |
| GWO.PR.I | Insurance Straight | -2.06 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-10-13 Maturity Price : 17.15 Evaluated at bid price : 17.15 Bid-YTW : 6.63 % |
| TRP.PR.G | FixedReset Disc | -2.04 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-10-13 Maturity Price : 16.80 Evaluated at bid price : 16.80 Bid-YTW : 8.69 % |
| PWF.PF.A | Perpetual-Discount | -2.02 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-10-13 Maturity Price : 16.95 Evaluated at bid price : 16.95 Bid-YTW : 6.67 % |
| SLF.PR.H | FixedReset Ins Non | -1.96 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-10-13 Maturity Price : 15.00 Evaluated at bid price : 15.00 Bid-YTW : 8.36 % |
| NA.PR.G | FixedReset Disc | -1.87 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-10-13 Maturity Price : 21.00 Evaluated at bid price : 21.00 Bid-YTW : 7.48 % |
| CU.PR.E | Perpetual-Discount | -1.85 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-10-13 Maturity Price : 18.55 Evaluated at bid price : 18.55 Bid-YTW : 6.72 % |
| NA.PR.S | FixedReset Disc | -1.83 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-10-13 Maturity Price : 18.75 Evaluated at bid price : 18.75 Bid-YTW : 7.73 % |
| RY.PR.M | FixedReset Disc | -1.80 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-10-13 Maturity Price : 18.51 Evaluated at bid price : 18.51 Bid-YTW : 7.57 % |
| PWF.PR.G | Perpetual-Discount | -1.76 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-10-13 Maturity Price : 22.07 Evaluated at bid price : 22.30 Bid-YTW : 6.63 % |
| CM.PR.S | FixedReset Disc | -1.70 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-10-13 Maturity Price : 21.61 Evaluated at bid price : 21.97 Bid-YTW : 6.85 % |
| BAM.PF.B | FixedReset Disc | -1.66 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-10-13 Maturity Price : 16.57 Evaluated at bid price : 16.57 Bid-YTW : 9.16 % |
| POW.PR.C | Perpetual-Discount | -1.52 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-10-13 Maturity Price : 21.71 Evaluated at bid price : 21.96 Bid-YTW : 6.64 % |
| GWO.PR.Q | Insurance Straight | -1.44 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-10-13 Maturity Price : 19.23 Evaluated at bid price : 19.23 Bid-YTW : 6.77 % |
| GWO.PR.T | Insurance Straight | -1.42 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-10-13 Maturity Price : 19.50 Evaluated at bid price : 19.50 Bid-YTW : 6.68 % |
| PWF.PR.Z | Perpetual-Discount | -1.40 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-10-13 Maturity Price : 19.70 Evaluated at bid price : 19.70 Bid-YTW : 6.56 % |
| BAM.PR.K | Floater | -1.38 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-10-13 Maturity Price : 12.13 Evaluated at bid price : 12.13 Bid-YTW : 7.96 % |
| BAM.PF.F | FixedReset Disc | -1.35 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-10-13 Maturity Price : 16.85 Evaluated at bid price : 16.85 Bid-YTW : 9.14 % |
| BMO.PR.S | FixedReset Disc | -1.34 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-10-13 Maturity Price : 19.18 Evaluated at bid price : 19.18 Bid-YTW : 7.55 % |
| BAM.PR.N | Perpetual-Discount | -1.31 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-10-13 Maturity Price : 18.06 Evaluated at bid price : 18.06 Bid-YTW : 6.65 % |
| BIP.PR.A | FixedReset Disc | -1.29 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-10-13 Maturity Price : 16.78 Evaluated at bid price : 16.78 Bid-YTW : 9.74 % |
| RY.PR.N | Perpetual-Discount | -1.26 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-10-13 Maturity Price : 20.34 Evaluated at bid price : 20.34 Bid-YTW : 6.13 % |
| BAM.PR.M | Perpetual-Discount | -1.25 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-10-13 Maturity Price : 18.16 Evaluated at bid price : 18.16 Bid-YTW : 6.61 % |
| GWO.PR.L | Insurance Straight | -1.22 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-10-13 Maturity Price : 21.00 Evaluated at bid price : 21.00 Bid-YTW : 6.80 % |
| BMO.PR.Y | FixedReset Disc | -1.15 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-10-13 Maturity Price : 18.84 Evaluated at bid price : 18.84 Bid-YTW : 7.61 % |
| IFC.PR.C | FixedReset Disc | -1.15 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-10-13 Maturity Price : 16.31 Evaluated at bid price : 16.31 Bid-YTW : 8.45 % |
| CU.PR.G | Perpetual-Discount | -1.15 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-10-13 Maturity Price : 17.20 Evaluated at bid price : 17.20 Bid-YTW : 6.65 % |
| BAM.PF.H | FixedReset Disc | -1.12 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2025-12-31 Maturity Price : 25.00 Evaluated at bid price : 23.75 Bid-YTW : 6.86 % |
| POW.PR.G | Perpetual-Discount | -1.10 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-10-13 Maturity Price : 20.77 Evaluated at bid price : 20.77 Bid-YTW : 6.79 % |
| BMO.PR.F | FixedReset Disc | -1.09 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-10-13 Maturity Price : 23.09 Evaluated at bid price : 23.50 Bid-YTW : 7.43 % |
| FTS.PR.F | Perpetual-Discount | -1.08 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-10-13 Maturity Price : 19.25 Evaluated at bid price : 19.25 Bid-YTW : 6.47 % |
| MFC.PR.B | Insurance Straight | -1.05 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-10-13 Maturity Price : 17.88 Evaluated at bid price : 17.88 Bid-YTW : 6.59 % |
| CM.PR.Q | FixedReset Disc | -1.04 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-10-13 Maturity Price : 19.00 Evaluated at bid price : 19.00 Bid-YTW : 7.55 % |
| CM.PR.Y | FixedReset Disc | -1.04 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-10-13 Maturity Price : 23.38 Evaluated at bid price : 23.75 Bid-YTW : 7.32 % |
| TRP.PR.C | FixedReset Disc | -1.02 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-10-13 Maturity Price : 11.68 Evaluated at bid price : 11.68 Bid-YTW : 9.29 % |
| IFC.PR.F | Insurance Straight | 1.18 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-10-13 Maturity Price : 21.40 Evaluated at bid price : 21.40 Bid-YTW : 6.26 % |
| IAF.PR.I | FixedReset Ins Non | 1.18 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-10-13 Maturity Price : 21.35 Evaluated at bid price : 21.35 Bid-YTW : 7.44 % |
| IFC.PR.K | Perpetual-Discount | 1.19 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-10-13 Maturity Price : 21.25 Evaluated at bid price : 21.25 Bid-YTW : 6.24 % |
| BAM.PR.Z | FixedReset Disc | 1.24 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-10-13 Maturity Price : 20.45 Evaluated at bid price : 20.45 Bid-YTW : 8.06 % |
| PVS.PR.K | SplitShare | 1.36 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2029-05-31 Maturity Price : 25.00 Evaluated at bid price : 22.30 Bid-YTW : 6.61 % |
| CU.PR.F | Perpetual-Discount | 1.64 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-10-13 Maturity Price : 17.40 Evaluated at bid price : 17.40 Bid-YTW : 6.58 % |
| BNS.PR.I | FixedReset Disc | 1.76 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-10-13 Maturity Price : 20.85 Evaluated at bid price : 20.85 Bid-YTW : 7.15 % |
| MFC.PR.J | FixedReset Ins Non | 1.92 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-10-13 Maturity Price : 21.25 Evaluated at bid price : 21.25 Bid-YTW : 7.36 % |
| NA.PR.W | FixedReset Disc | 2.04 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-10-13 Maturity Price : 18.01 Evaluated at bid price : 18.01 Bid-YTW : 7.68 % |
| CM.PR.O | FixedReset Disc | 2.54 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-10-13 Maturity Price : 18.20 Evaluated at bid price : 18.20 Bid-YTW : 7.74 % |
| PWF.PR.P | FixedReset Disc | 8.18 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-10-13 Maturity Price : 11.90 Evaluated at bid price : 11.90 Bid-YTW : 9.25 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| IFC.PR.I | Perpetual-Discount | 81,630 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-10-13 Maturity Price : 21.63 Evaluated at bid price : 21.93 Bid-YTW : 6.20 % |
| NA.PR.C | FixedReset Disc | 78,462 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-10-13 Maturity Price : 22.91 Evaluated at bid price : 24.34 Bid-YTW : 7.16 % |
| TD.PF.I | FixedReset Disc | 40,331 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-10-13 Maturity Price : 22.80 Evaluated at bid price : 24.06 Bid-YTW : 6.83 % |
| TRP.PR.B | FixedReset Disc | 25,600 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-10-13 Maturity Price : 10.85 Evaluated at bid price : 10.85 Bid-YTW : 9.73 % |
| TD.PF.B | FixedReset Disc | 17,117 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-10-13 Maturity Price : 18.28 Evaluated at bid price : 18.28 Bid-YTW : 7.69 % |
| GWO.PR.I | Insurance Straight | 15,153 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-10-13 Maturity Price : 17.15 Evaluated at bid price : 17.15 Bid-YTW : 6.63 % |
| There were 12 other index-included issues trading in excess of 10,000 shares. | |||
| Wide Spread Highlights | ||
| Issue | Index | Quote Data and Yield Notes |
| MFC.PR.J | FixedReset Ins Non | Quote: 21.25 – 23.80 Spot Rate : 2.5500 Average : 1.4331 YTW SCENARIO |
| RY.PR.J | FixedReset Disc | Quote: 18.11 – 20.20 Spot Rate : 2.0900 Average : 1.3107 YTW SCENARIO |
| IFC.PR.E | Insurance Straight | Quote: 19.75 – 22.05 Spot Rate : 2.3000 Average : 1.6140 YTW SCENARIO |
| MFC.PR.L | FixedReset Ins Non | Quote: 16.27 – 18.60 Spot Rate : 2.3300 Average : 1.8387 YTW SCENARIO |
| BAM.PR.M | Perpetual-Discount | Quote: 18.16 – 19.55 Spot Rate : 1.3900 Average : 0.9489 YTW SCENARIO |
| GWO.PR.Y | Insurance Straight | Quote: 17.00 – 18.80 Spot Rate : 1.8000 Average : 1.3777 YTW SCENARIO |
No 7.5% dividend for you, says Pembina.
PPL.PF.C redeemed.
https://www.pembina.com/media-centre/news/details/135552/
So PPL.PF.E and PPL.PF.A likely to surge, ceteris paribus.
On the other hand, wow, TD is issuing a 8.125% rate reset with a rate reset delta of 4.075%:
…The LRCNs will bear interest at a rate of 8.125 per cent annually, payable quarterly, for the initial period ending on, but excluding, October 31, 2027. Thereafter, the interest rate on the LRCNs will reset every five years at a rate equal to the prevailing U.S. Treasury Rate plus 4.075 per cent. The LRCNs will mature on October 31, 2082. The expected closing date of the offering is October 17, 2022, subject to customary closing conditions.
Concurrently with the issuance of the LRCNs, TD will issue 1,750,000 Non-Cumulative 8.125% Fixed Rate Reset Preferred Shares, Series 30 (Non-Viability Contingent Capital (NVCC)) (“Preferred Shares Series 30”) to be held by Computershare Trust Company of Canada, as trustee for TD LRCN Limited Recourse Trust™ (the “Limited Recourse Trust”)…
https://stories.td.com/ca/en/news/2022-10-06-td-announces-non-viability-contingent-capital-at1-limited-re
Fairfax Financial Holdings: Intention to Make a Normal Course Issuer Bid for Subordinate Voting Shares and Preferred Shares
Fairfax is buying the shares at a discount, and cancelling them.
https://finance.yahoo.com/news/fairfax-financial-holdings-intention-normal-114500401.html
re ffh normal course issuer bid… is this just a mechanism that they could choose to purchase their own shares as opposed to a commitment that they will in fact do so? … have they actually purchased and cancelled any pref shares?
is this just a mechanism that they could choose to purchase their own shares as opposed to a commitment that they will in fact do so?
It’s just a mechanism; sometimes it’s followed by real money but far more often it’s just window dressing.
If you look at the Fairfax press release linked above (emphasis added):
[…] Thanks to Assiduous Reader skeptical for bringing this to my attention! […]
I am wondering if the greater tax efficiency of the LRCN for issuers is what is justifying a higher yield than prefs.
But why would issuers pay more than they have to get the raise the money they need.
I believe the issuers will pay more because they can deduct the payments as interest so there is a tax advantage.