First Republic finally succumbed:
Regulators seized control of First Republic Bank and sold it to JPMorgan Chase on Monday, a dramatic move aimed at curbing a two-month banking crisis that has rattled the financial system.
First Republic, whose assets were battered by the rise in interest rates, had struggled to stay alive after two other lenders collapsed last month, spooking depositors and investors.
First Republic was taken over by the Federal Deposit Insurance Corporation and immediately sold to JPMorgan. The deal was announced hours before U.S. markets are set to open, and after a scramble by officials over the weekend.
…
JPMorgan will “assume all of the deposits and substantially all of the assets of First Republic Bank,” the F.D.I.C. said in a statement. The regulator estimated that its insurance fund would have to pay out about $13 billion to cover First Republic’s losses. JPMorgan also said that the F.D.I.C. would provide it with $50 billion in financing.
…
By last week, after an alarming earnings report in which the bank disclosed that customers had withdrawn more than half of its deposits, it became clear that there was no option outside a government takeover.
…
Like the other two failed banks — Silicon Valley Bank and Signature — First Republic collapsed under the weight of loans and investments that lost billions of dollars in value as the Federal Reserve rapidly raised interest rates to fight inflation.
…
Other regional lenders, like Utah’s Zions Bank and PacWest of Los Angeles, have firmed their footing faster than First Republic, and bank analysts do not see another collapse as imminent. The stocks of every other bank in the S&P 500 stock index rose on Friday even as First Republic’s shares ended the day down more than 40 percent in anticipation of the government takeover.
Sic transit gloria mundi!
I still have no time to catch up on all the links I have saved …
| 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 | 0.0417 % | 2,306.5 |
| FixedFloater | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.0417 % | 4,423.9 |
| Floater | 9.77 % | 9.96 % | 34,647 | 9.53 | 2 | 0.0417 % | 2,549.5 |
| OpRet | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.0610 % | 3,360.9 |
| SplitShare | 5.00 % | 7.29 % | 45,881 | 2.59 | 7 | -0.0610 % | 4,013.7 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.0610 % | 3,131.6 |
| Perpetual-Premium | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.0538 % | 2,771.7 |
| Perpetual-Discount | 6.16 % | 6.23 % | 51,431 | 13.57 | 34 | 0.0538 % | 3,022.4 |
| FixedReset Disc | 5.78 % | 7.66 % | 84,804 | 12.03 | 63 | -0.3094 % | 2,145.6 |
| Insurance Straight | 6.06 % | 6.14 % | 69,367 | 13.68 | 19 | 0.2191 % | 2,966.4 |
| FloatingReset | 10.41 % | 10.86 % | 50,707 | 8.86 | 2 | 0.0676 % | 2,404.1 |
| FixedReset Prem | 6.94 % | 6.56 % | 326,472 | 12.82 | 1 | -0.2759 % | 2,327.4 |
| FixedReset Bank Non | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.3094 % | 2,193.2 |
| FixedReset Ins Non | 5.95 % | 7.28 % | 82,140 | 12.15 | 11 | 0.0000 % | 2,342.1 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| PWF.PR.P | FixedReset Disc | -3.23 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-01 Maturity Price : 12.00 Evaluated at bid price : 12.00 Bid-YTW : 8.66 % |
| NA.PR.G | FixedReset Disc | -1.87 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-01 Maturity Price : 21.00 Evaluated at bid price : 21.00 Bid-YTW : 7.04 % |
| BN.PF.A | FixedReset Disc | -1.51 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-01 Maturity Price : 18.32 Evaluated at bid price : 18.32 Bid-YTW : 8.34 % |
| IFC.PR.C | FixedReset Disc | -1.49 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-01 Maturity Price : 17.88 Evaluated at bid price : 17.88 Bid-YTW : 7.44 % |
| PWF.PF.A | Perpetual-Discount | -1.47 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-01 Maturity Price : 18.13 Evaluated at bid price : 18.13 Bid-YTW : 6.25 % |
| TD.PF.B | FixedReset Disc | -1.46 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-01 Maturity Price : 16.90 Evaluated at bid price : 16.90 Bid-YTW : 7.81 % |
| TRP.PR.C | FixedReset Disc | -1.39 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-01 Maturity Price : 11.34 Evaluated at bid price : 11.34 Bid-YTW : 9.11 % |
| POW.PR.B | Perpetual-Discount | -1.36 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-01 Maturity Price : 21.44 Evaluated at bid price : 21.70 Bid-YTW : 6.22 % |
| MFC.PR.M | FixedReset Ins Non | -1.18 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-01 Maturity Price : 16.80 Evaluated at bid price : 16.80 Bid-YTW : 8.02 % |
| IFC.PR.A | FixedReset Ins Non | -1.13 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-01 Maturity Price : 17.45 Evaluated at bid price : 17.45 Bid-YTW : 7.05 % |
| CM.PR.O | FixedReset Disc | -1.09 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-01 Maturity Price : 17.31 Evaluated at bid price : 17.31 Bid-YTW : 7.70 % |
| TRP.PR.G | FixedReset Disc | -1.01 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-01 Maturity Price : 16.58 Evaluated at bid price : 16.58 Bid-YTW : 8.37 % |
| GWO.PR.M | Insurance Straight | -1.01 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-01 Maturity Price : 23.15 Evaluated at bid price : 23.41 Bid-YTW : 6.27 % |
| CU.PR.E | Perpetual-Discount | 1.03 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-01 Maturity Price : 20.55 Evaluated at bid price : 20.55 Bid-YTW : 6.08 % |
| SLF.PR.E | Insurance Straight | 1.26 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-01 Maturity Price : 19.35 Evaluated at bid price : 19.35 Bid-YTW : 5.89 % |
| GWO.PR.P | Insurance Straight | 1.35 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-01 Maturity Price : 21.53 Evaluated at bid price : 21.79 Bid-YTW : 6.27 % |
| MFC.PR.F | FixedReset Ins Non | 1.88 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-01 Maturity Price : 12.48 Evaluated at bid price : 12.48 Bid-YTW : 8.22 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| TD.PF.C | FixedReset Disc | 129,348 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-01 Maturity Price : 16.96 Evaluated at bid price : 16.96 Bid-YTW : 7.70 % |
| BMO.PR.T | FixedReset Disc | 54,148 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-01 Maturity Price : 16.98 Evaluated at bid price : 16.98 Bid-YTW : 7.72 % |
| TD.PF.E | FixedReset Disc | 53,468 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-01 Maturity Price : 18.30 Evaluated at bid price : 18.30 Bid-YTW : 7.55 % |
| BMO.PR.W | FixedReset Disc | 52,137 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-01 Maturity Price : 16.93 Evaluated at bid price : 16.93 Bid-YTW : 7.70 % |
| TD.PF.A | FixedReset Disc | 51,182 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-01 Maturity Price : 17.05 Evaluated at bid price : 17.05 Bid-YTW : 7.65 % |
| IFC.PR.A | FixedReset Ins Non | 51,085 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-01 Maturity Price : 17.45 Evaluated at bid price : 17.45 Bid-YTW : 7.05 % |
| There were 12 other index-included issues trading in excess of 10,000 shares. | |||
| Wide Spread Highlights | ||
| Issue | Index | Quote Data and Yield Notes |
| TRP.PR.E | FixedReset Disc | Quote: 15.10 – 17.45 Spot Rate : 2.3500 Average : 1.8907 YTW SCENARIO |
| POW.PR.C | Perpetual-Discount | Quote: 23.49 – 24.40 Spot Rate : 0.9100 Average : 0.5409 YTW SCENARIO |
| BN.PR.K | Floater | Quote: 12.01 – 12.80 Spot Rate : 0.7900 Average : 0.4854 YTW SCENARIO |
| TD.PF.J | FixedReset Disc | Quote: 22.28 – 22.99 Spot Rate : 0.7100 Average : 0.5268 YTW SCENARIO |
| POW.PR.B | Perpetual-Discount | Quote: 21.70 – 22.35 Spot Rate : 0.6500 Average : 0.4843 YTW SCENARIO |
| GWO.PR.N | FixedReset Ins Non | Quote: 12.01 – 12.42 Spot Rate : 0.4100 Average : 0.2638 YTW SCENARIO |
This pref issue is not mentioned here but I keep wondering why CIU.PR.A almost always trades lower than CU.PR.G and CU.PR.F… and yet, yields 10bps more on par value (4.6% vs. 4.5%).
Sure, CU INC. only has 2 preferreds and CIU.PR.A is the only perpetual while Canadian Utilities has a few more with PR.F and PR.G having the lowest coupon but I don’t believe the risk of being called explains the ongoing price difference.
Today for example, CU.PR.F traded in a $19.15/$19.3 range and CU.PR.G around $19.02/05 when CIU.PR.A hasn’t crossed the $19 for a while now.
I am not sure how accurate it is but according to the company’s website, CU INC.’s preferred shares (CIU) are rated marginally higher than Canadian Utilities preferreds so it adds to the intrigue.
Maybe more experienced investors will have a very easy answer 🙂 but I don’t see it.
It’s the liquidity. CU.PR.F & G have 9 million and 7 million shares issued respectively; while CIU.PR.A has only 4.6 million. F & G are easier to trade so command a premium over CIU.PR.A
CU.PR.J has 8 million shares out. Yet, it also routinely trades at higher yields as compared to the H/F/G series.
A couple of Enbridge prefs got reset:
TSX: ENB.PR.F
“With respect to any Series F Shares that remain outstanding after June 1, 2023, holders thereof will be entitled to receive quarterly fixed cumulative preferential cash dividends, as and when declared by the Board of Directors of Enbridge. The new annual dividend rate applicable to the Series F Shares for the five-year period commencing on June 1, 2023 to, but excluding, June 1, 2028 will be 5.538 percent, being equal to the five-year Government of Canada bond yield of 3.028 percent determined as of today plus 2.51 percent in accordance with the terms of the Series F Shares.”
ENB.PR.V
With respect to any Series 1 Shares that remain outstanding after June 1, 2023, holders thereof will be entitled to receive quarterly fixed cumulative preferential cash dividends, as and when declared by the Board of Directors of Enbridge. The new annual dividend rate applicable to the Series 1 Shares for the five-year period commencing on June 1, 2023 to, but excluding, June 1, 2028 will be 6.7037 percent, being equal to the five-year United States Treasury bond yield of 3.5637 percent determined as of today plus 3.14 percent in accordance with the terms of the Series 1 Shares.
[…] Thanks to Assiduous Reader Fuzzybear for bringing this to my attention! […]