TXPR closed at 521.30, down 1.11% on the day after setting a new 52-week low. Volume today was 1.34-million, highest of the past 21 trading days.
CPD closed at 10.34, down 1.24% on the day after setting a new 52-week low. Volume was 38,640, below the median of the past 21 trading days.
ZPR closed at 8.55, down 1.16% on the day after setting a new 52-week low. Volume was 98,600, fifth-lowest of the past 21 trading days.
Five-year Canada yields up to 3.55% today.
It’s hard to tell what’s going on here – perhaps the market has entered a self-reinforcing declining phase that will only stop when some institutional money is put on the table? All I can really say is … it’s time to take off your hat and fill it with preferred shares! ‘Be fearful when others are greedy …’
The Boston Fed has released a ‘Current Policy Perspective’ By Falk Bräuning and Viacheslav Sheremirov titled The Historical Effects of Banking Distress on Economic Activity:
The failures of several U.S. regional banks have stimulated discussions about the macroeconomic effects of a likely credit contraction triggered by the recent banking turmoil. Drawing on historical evidence from advanced economies, this study documents a sizable and persistent decline in output and rise in unemployment following non-systemic financial distress. The effects of a systemic banking crisis are two to four times as large. High corporate leverage exacerbates banking turmoil, whereas high bank capitalization and a relatively large share of market financing in corporate debt mitigate it. These channels approximately offset one another so that the estimates tailored to the current U.S. economy are in line with the average effect.
…
The non-systemic financial distress episodes are distributed more evenly than the systemic crises. Such episodes include those that occurred in the United Kingdom in the mid-1970s, mid-1980s, and early 1990s; in Germany in the late 1970s; in Canada in the mid-1980s; in the United States in the late 1980s (the savings and loan crisis); in Australia and Italy in the early 1990s; in France in the mid-1990s; and others. For six countries, the Global Financial Crisis was also an episode of non-systemic distress. Thus, history provides substantial variation in the geography, time, and severity of financial distress to identify its impact on the economy
…
In lieu of concluding remarks, this study performs back-of-the-envelope calculations of the effect of non-systemic financial distress, similar in size to the typical episode in the sample, on domestic output. These calculations combine the latest observations of debt over GDP, bank loans over business debt, and the bank capital ratio for the United States with the estimates discussed above. The negative effect of relatively high corporate leverage in the United States is almost entirely offset by the positive effects of relatively high bank capitalization and a relatively small share of bank loans in business debt. The resulting estimate of output decline one year after the onset of non-systemic financial distress equals 1.4 percent, which is statistically indistinguishable from the 1.3 percent estimated in the full sample without accounting for heterogeneity.
There is speculation that the US debt limit showdown will end with everybody doing some grandstanding:
Top White House officials and Republican lawmakers were closing in on Thursday on a deal that would raise the debt limit for two years while capping federal spending on everything but the military and veterans for the same period. Officials were racing to cement an agreement in time to avert a federal default that is projected in just one week.
The deal taking shape would allow Republicans to say that they were reducing some federal spending — even as spending on the military and veterans’ programs would continue to grow — and allow Democrats to say they had spared most domestic programs from significant cuts.
Negotiators from both sides were talking into the evening and beginning to draft legislative text, though some details remained in flux.
A deal would be a Good Thing because, for instance:
On Wednesday evening, Fitch fired its first shot across the government’s bow, placing the United States’ rating on watch for a downgrade, a move that “reflects increased political partisanship that is hindering reaching a resolution to raise or suspend the debt limit,” the agency’s analysts warned.
The United States has never deliberately reneged on its debt in the modern era, but even a brief default would alter the perception of debt-ceiling brinkmanship as political theater and turn it into a real risk to the creditworthiness of the government, Moody’s has warned.
“Our view is that we would need to reflect that permanently in the rating,” said William Foster, the lead analyst for the United States at the rating agency. The agency has said that if the Treasury Department misses one interest payment, its credit rating would be lowered by a notch. For the United States to regain its previous top rating, according to Mr. Foster, lawmakers would have to significantly alter the debt limit or remove it entirely.
… and DBRS has warned:
DBRS, Inc. (DBRS Morningstar) placed the United States of America’s Long-Term Foreign and Local Currency – Issuer Ratings of AAA Under Review with Negative Implications. In addition, DBRS Morningstar placed the United States of America’s Short-Term Foreign and Local Currency – Issuer Ratings of R-1 (high) Under Review with Negative Implications.
The Under Review with Negative Implications reflects the risk of Congress failing to increase or suspend the debt ceiling in a timely manner. If Congress does not act, the U.S. federal government will not be able to pay all of its obligations. The precise timing of when the federal government will exhaust available cash and extraordinary measures, the so-called X-date, is somewhat unclear. However, Treasury Secretary Janet Yellen reiterated her warning on May 22 that the X-date could come as early as June 1. Judging from the latest data on daily net inflows into the Treasury General Account, we believe it is reasonable to assume the X-date could arrive within weeks if not days.
While we still expect Congress to raise the debt ceiling before Treasury runs out of available resources, there is a risk of Congressional inaction as the X-date approaches. DBRS Morningstar would consider any missed payment of interest or principal as a default. In such a scenario, the relevant U.S. Issuer Ratings would be downgraded to “Selective Default.”
But it’s a big world. BIS has released a committee report titled Central bank digital currencies: ongoing policy perspectives:
In 2021, this group noted there was a balance between facilitating adoption of any CBDC to realise policy objectives and managing any potential excess demand for CBDC. CBDC design will need to account for potentially wide ranges of demand or CBDC adoption in the early/introductory stages, and preparedness for market stresses or other extraordinary scenarios must be there from the outset. To the extent that any central bank wishes to actively shape demand for CBDC, as part of its larger policy toolkit, there is likely no one-size-fits-all solution for whether pricing or quantity control approaches are most suitable, either in the introductory phase or over time (see Box 3). In designing and implementing any measures, central banks would need to be mindful of central bank balance sheets, interaction with bank regulation and how CBDC compares with other forms of money.
CBDCs, if issued, must be interoperable with other forms of money and existing payment systems. Two key issues are how CBDC would connect with instant payment infrastructure,7 and how CBDC transactions could be processed at point of sale (PoS) terminals. Similar to its role in existing infrastructure and a diverse set of industries, international standardisation could be highly beneficial in supporting the development of the CBDC ecosystem.
Decisions to deepen technology investments will also carry meaningful cost. Testing and development of solutions has not yet led any member of this group to make firm choices around one technology or system design, although such choices are likely to occur in the coming years. For example, the use of blockchain within CBDC systems remains a possibility, although it is currently not deemed essential to the functioning of a potential CBDC system (see Box 4).
…
Many experiments with wholesale CBDC for cross-border payments have enabled a wider set of participants to have direct access to central bank systems. Broadening access arrangements to a wider set of participants (domestically and/or internationally) would be a significant policy choice that could also be undertaken without CBDC. Therefore, further work is needed to understand how value could be drawn through issuing a wholesale CBDC – particularly what it may provide over and above upgrades and improvements to existing systems. Making improvements with CBDCs may also require central banks to consider the role of further governance and standardisation or alignment in areas beyond messaging standards.
| 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 | -1.8985 % | 2,135.4 |
| FixedFloater | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -1.8985 % | 4,095.7 |
| Floater | 10.55 % | 10.76 % | 25,346 | 8.87 | 2 | -1.8985 % | 2,360.4 |
| OpRet | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.1039 % | 3,357.4 |
| SplitShare | 5.01 % | 6.84 % | 39,614 | 2.56 | 7 | 0.1039 % | 4,009.5 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.1039 % | 3,128.4 |
| Perpetual-Premium | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -1.6091 % | 2,650.4 |
| Perpetual-Discount | 6.44 % | 6.53 % | 42,369 | 13.13 | 34 | -1.6091 % | 2,890.1 |
| FixedReset Disc | 6.10 % | 8.50 % | 85,804 | 11.17 | 63 | -1.1853 % | 2,042.0 |
| Insurance Straight | 6.35 % | 6.43 % | 58,889 | 13.22 | 19 | -1.4470 % | 2,831.8 |
| FloatingReset | 10.84 % | 11.49 % | 52,369 | 8.37 | 2 | -0.5496 % | 2,349.7 |
| FixedReset Prem | 6.97 % | 6.85 % | 325,529 | 12.51 | 1 | 0.2783 % | 2,320.1 |
| FixedReset Bank Non | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -1.1853 % | 2,087.3 |
| FixedReset Ins Non | 6.17 % | 7.73 % | 81,119 | 11.61 | 11 | -0.6188 % | 2,261.2 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| PWF.PR.F | Perpetual-Discount | -18.75 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-25 Maturity Price : 16.90 Evaluated at bid price : 16.90 Bid-YTW : 7.89 % |
| GWO.PR.P | Insurance Straight | -9.87 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-25 Maturity Price : 19.00 Evaluated at bid price : 19.00 Bid-YTW : 7.26 % |
| BMO.PR.Y | FixedReset Disc | -6.59 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-25 Maturity Price : 15.88 Evaluated at bid price : 15.88 Bid-YTW : 8.94 % |
| BN.PF.I | FixedReset Disc | -4.90 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-25 Maturity Price : 19.03 Evaluated at bid price : 19.03 Bid-YTW : 9.05 % |
| CU.PR.I | FixedReset Disc | -4.26 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-25 Maturity Price : 21.61 Evaluated at bid price : 22.02 Bid-YTW : 7.62 % |
| BN.PF.C | Perpetual-Discount | -3.95 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-25 Maturity Price : 17.50 Evaluated at bid price : 17.50 Bid-YTW : 7.07 % |
| MFC.PR.F | FixedReset Ins Non | -3.88 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-25 Maturity Price : 11.40 Evaluated at bid price : 11.40 Bid-YTW : 9.38 % |
| BN.PF.F | FixedReset Disc | -3.16 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-25 Maturity Price : 15.30 Evaluated at bid price : 15.30 Bid-YTW : 10.13 % |
| BN.PF.B | FixedReset Disc | -3.13 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-25 Maturity Price : 15.50 Evaluated at bid price : 15.50 Bid-YTW : 9.87 % |
| BN.PR.B | Floater | -3.00 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-25 Maturity Price : 11.01 Evaluated at bid price : 11.01 Bid-YTW : 10.97 % |
| TRP.PR.C | FixedReset Disc | -2.86 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-25 Maturity Price : 10.20 Evaluated at bid price : 10.20 Bid-YTW : 10.66 % |
| CM.PR.T | FixedReset Disc | -2.84 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-25 Maturity Price : 21.53 Evaluated at bid price : 21.53 Bid-YTW : 7.82 % |
| BN.PR.M | Perpetual-Discount | -2.78 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-25 Maturity Price : 17.50 Evaluated at bid price : 17.50 Bid-YTW : 6.92 % |
| BN.PF.D | Perpetual-Discount | -2.70 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-25 Maturity Price : 18.00 Evaluated at bid price : 18.00 Bid-YTW : 6.94 % |
| POW.PR.A | Perpetual-Discount | -2.45 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-25 Maturity Price : 21.51 Evaluated at bid price : 21.51 Bid-YTW : 6.62 % |
| BIP.PR.A | FixedReset Disc | -2.42 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-25 Maturity Price : 16.13 Evaluated at bid price : 16.13 Bid-YTW : 10.25 % |
| RY.PR.Z | FixedReset Disc | -2.42 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-25 Maturity Price : 16.15 Evaluated at bid price : 16.15 Bid-YTW : 8.65 % |
| BN.PF.H | FixedReset Disc | -2.41 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-25 Maturity Price : 20.26 Evaluated at bid price : 20.26 Bid-YTW : 8.94 % |
| BN.PR.N | Perpetual-Discount | -2.40 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-25 Maturity Price : 17.52 Evaluated at bid price : 17.52 Bid-YTW : 6.92 % |
| POW.PR.D | Perpetual-Discount | -2.32 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-25 Maturity Price : 19.35 Evaluated at bid price : 19.35 Bid-YTW : 6.57 % |
| PWF.PR.P | FixedReset Disc | -2.30 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-25 Maturity Price : 11.90 Evaluated at bid price : 11.90 Bid-YTW : 9.26 % |
| GWO.PR.G | Insurance Straight | -2.27 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-25 Maturity Price : 20.28 Evaluated at bid price : 20.28 Bid-YTW : 6.53 % |
| TRP.PR.G | FixedReset Disc | -2.26 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-25 Maturity Price : 15.15 Evaluated at bid price : 15.15 Bid-YTW : 9.55 % |
| BN.PR.X | FixedReset Disc | -2.08 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-25 Maturity Price : 13.66 Evaluated at bid price : 13.66 Bid-YTW : 9.46 % |
| FTS.PR.G | FixedReset Disc | -2.06 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-25 Maturity Price : 16.65 Evaluated at bid price : 16.65 Bid-YTW : 8.45 % |
| PWF.PF.A | Perpetual-Discount | -2.05 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-25 Maturity Price : 17.65 Evaluated at bid price : 17.65 Bid-YTW : 6.46 % |
| RY.PR.N | Perpetual-Discount | -1.99 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-25 Maturity Price : 20.69 Evaluated at bid price : 20.69 Bid-YTW : 5.96 % |
| GWO.PR.R | Insurance Straight | -1.99 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-25 Maturity Price : 18.72 Evaluated at bid price : 18.72 Bid-YTW : 6.53 % |
| MFC.PR.N | FixedReset Ins Non | -1.98 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-25 Maturity Price : 15.36 Evaluated at bid price : 15.36 Bid-YTW : 8.95 % |
| BN.PF.G | FixedReset Disc | -1.96 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-25 Maturity Price : 13.99 Evaluated at bid price : 13.99 Bid-YTW : 10.48 % |
| FTS.PR.M | FixedReset Disc | -1.96 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-25 Maturity Price : 16.03 Evaluated at bid price : 16.03 Bid-YTW : 8.97 % |
| PWF.PR.R | Perpetual-Discount | -1.95 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-25 Maturity Price : 21.09 Evaluated at bid price : 21.09 Bid-YTW : 6.61 % |
| BN.PR.T | FixedReset Disc | -1.87 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-25 Maturity Price : 13.15 Evaluated at bid price : 13.15 Bid-YTW : 10.04 % |
| BIP.PR.E | FixedReset Disc | -1.81 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-25 Maturity Price : 20.59 Evaluated at bid price : 20.59 Bid-YTW : 8.10 % |
| FTS.PR.K | FixedReset Disc | -1.79 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-25 Maturity Price : 15.35 Evaluated at bid price : 15.35 Bid-YTW : 8.92 % |
| SLF.PR.D | Insurance Straight | -1.67 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-25 Maturity Price : 18.30 Evaluated at bid price : 18.30 Bid-YTW : 6.19 % |
| TD.PF.J | FixedReset Disc | -1.64 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-25 Maturity Price : 20.95 Evaluated at bid price : 20.95 Bid-YTW : 7.29 % |
| MFC.PR.C | Insurance Straight | -1.60 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-25 Maturity Price : 17.81 Evaluated at bid price : 17.81 Bid-YTW : 6.33 % |
| PWF.PR.E | Perpetual-Discount | -1.59 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-25 Maturity Price : 21.08 Evaluated at bid price : 21.08 Bid-YTW : 6.61 % |
| MFC.PR.M | FixedReset Ins Non | -1.58 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-25 Maturity Price : 15.60 Evaluated at bid price : 15.60 Bid-YTW : 8.99 % |
| CU.PR.C | FixedReset Disc | -1.58 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-25 Maturity Price : 18.11 Evaluated at bid price : 18.11 Bid-YTW : 7.88 % |
| BN.PF.A | FixedReset Disc | -1.57 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-25 Maturity Price : 17.50 Evaluated at bid price : 17.50 Bid-YTW : 9.26 % |
| NA.PR.W | FixedReset Disc | -1.54 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-25 Maturity Price : 16.00 Evaluated at bid price : 16.00 Bid-YTW : 8.64 % |
| CM.PR.Y | FixedReset Disc | -1.53 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-25 Maturity Price : 22.00 Evaluated at bid price : 22.60 Bid-YTW : 7.70 % |
| POW.PR.C | Perpetual-Discount | -1.50 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-25 Maturity Price : 22.71 Evaluated at bid price : 22.95 Bid-YTW : 6.41 % |
| BN.PF.J | FixedReset Disc | -1.47 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-25 Maturity Price : 20.80 Evaluated at bid price : 20.80 Bid-YTW : 7.92 % |
| CM.PR.Q | FixedReset Disc | -1.47 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-25 Maturity Price : 16.80 Evaluated at bid price : 16.80 Bid-YTW : 8.57 % |
| BMO.PR.E | FixedReset Disc | -1.43 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-25 Maturity Price : 20.01 Evaluated at bid price : 20.01 Bid-YTW : 7.69 % |
| TRP.PR.D | FixedReset Disc | -1.42 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-25 Maturity Price : 14.55 Evaluated at bid price : 14.55 Bid-YTW : 9.96 % |
| GWO.PR.H | Insurance Straight | -1.40 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-25 Maturity Price : 18.95 Evaluated at bid price : 18.95 Bid-YTW : 6.52 % |
| TRP.PR.B | FixedReset Disc | -1.40 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-25 Maturity Price : 9.86 Evaluated at bid price : 9.86 Bid-YTW : 10.78 % |
| PWF.PR.Z | Perpetual-Discount | -1.38 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-25 Maturity Price : 20.01 Evaluated at bid price : 20.01 Bid-YTW : 6.52 % |
| CU.PR.E | Perpetual-Discount | -1.38 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-25 Maturity Price : 19.34 Evaluated at bid price : 19.34 Bid-YTW : 6.37 % |
| POW.PR.G | Perpetual-Discount | -1.37 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-25 Maturity Price : 21.26 Evaluated at bid price : 21.53 Bid-YTW : 6.60 % |
| MFC.PR.B | Insurance Straight | -1.35 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-25 Maturity Price : 18.28 Evaluated at bid price : 18.28 Bid-YTW : 6.38 % |
| ELF.PR.H | Perpetual-Discount | -1.30 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-25 Maturity Price : 21.20 Evaluated at bid price : 21.20 Bid-YTW : 6.59 % |
| BMO.PR.W | FixedReset Disc | -1.23 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-25 Maturity Price : 16.00 Evaluated at bid price : 16.00 Bid-YTW : 8.63 % |
| SLF.PR.E | Insurance Straight | -1.10 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-25 Maturity Price : 18.90 Evaluated at bid price : 18.90 Bid-YTW : 6.06 % |
| TD.PF.L | FixedReset Disc | -1.10 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-25 Maturity Price : 21.97 Evaluated at bid price : 22.55 Bid-YTW : 7.43 % |
| PWF.PR.K | Perpetual-Discount | -1.03 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-25 Maturity Price : 19.20 Evaluated at bid price : 19.20 Bid-YTW : 6.53 % |
| GWO.PR.I | Insurance Straight | -1.00 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-25 Maturity Price : 17.82 Evaluated at bid price : 17.82 Bid-YTW : 6.43 % |
| TRP.PR.A | FixedReset Disc | 2.64 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-25 Maturity Price : 12.83 Evaluated at bid price : 12.83 Bid-YTW : 10.13 % |
| MFC.PR.I | FixedReset Ins Non | 2.68 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-25 Maturity Price : 21.52 Evaluated at bid price : 21.80 Bid-YTW : 7.14 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| MFC.PR.M | FixedReset Ins Non | 46,200 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-25 Maturity Price : 15.60 Evaluated at bid price : 15.60 Bid-YTW : 8.99 % |
| CU.PR.G | Perpetual-Discount | 41,500 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-25 Maturity Price : 18.50 Evaluated at bid price : 18.50 Bid-YTW : 6.12 % |
| SLF.PR.E | Insurance Straight | 37,082 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-25 Maturity Price : 18.90 Evaluated at bid price : 18.90 Bid-YTW : 6.06 % |
| TD.PF.B | FixedReset Disc | 34,500 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-25 Maturity Price : 16.45 Evaluated at bid price : 16.45 Bid-YTW : 8.50 % |
| TRP.PR.D | FixedReset Disc | 28,631 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-25 Maturity Price : 14.55 Evaluated at bid price : 14.55 Bid-YTW : 9.96 % |
| BN.PF.B | FixedReset Disc | 27,850 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-05-25 Maturity Price : 15.50 Evaluated at bid price : 15.50 Bid-YTW : 9.87 % |
| There were 16 other index-included issues trading in excess of 10,000 shares. | |||
| Wide Spread Highlights | ||
| Issue | Index | Quote Data and Yield Notes |
| PWF.PR.F | Perpetual-Discount | Quote: 16.90 – 20.90 Spot Rate : 4.0000 Average : 2.1806 YTW SCENARIO |
| CU.PR.E | Perpetual-Discount | Quote: 19.34 – 23.72 Spot Rate : 4.3800 Average : 2.8853 YTW SCENARIO |
| GWO.PR.P | Insurance Straight | Quote: 19.00 – 21.40 Spot Rate : 2.4000 Average : 1.4412 YTW SCENARIO |
| CU.PR.J | Perpetual-Discount | Quote: 18.67 – 22.00 Spot Rate : 3.3300 Average : 2.4282 YTW SCENARIO |
| MFC.PR.M | FixedReset Ins Non | Quote: 15.60 – 17.50 Spot Rate : 1.9000 Average : 1.1055 YTW SCENARIO |
| CU.PR.F | Perpetual-Discount | Quote: 18.05 – 20.00 Spot Rate : 1.9500 Average : 1.2768 YTW SCENARIO |
its the lack of ncib activity that has always perplexed me. with goc5yr at 3 in perpetuity (let alone 3.5 current or higher), double digit pref yields for investment grade make an awfully good use of capital
DR:
Agreed! I have been puzzling about this for years now …. especially whenever prefs “fall out of favour” and test 52-week lows … which happens all too often! Sigh! You would think that even companies like Enbridge and Brookfield … with so many prefs out … would benefit by nibbling away at sub-par outstanding issues and never bother with redemptions. Does it involve too much accounting and regulatory bookwork for them?
Cheers!
Talking about Brookfield… most of their prefs are being hammered this morning…
its the lack of ncib activity that has always perplexed me.
Companies often have idiosyncratic views about the status of their preferred shares. On the one hand, GWO’s Straight Perpetuals were trading at such high premia for so long (remember those days?) it was strange that they were not redeemed and replaced … but they thought of them differently, as discussed (for instance) in the 2010 Annual Report:
This language appears to have disappeared from their financial statements and website – make of that what you will!
On the other hand, Artis REIT seems to regard preferred shares as little more than fancy mortgages – as shown by the redemption of AX.PR.G. I remember the CFO bragging in some press release or Management Discussion that they could get mortgages for less than the price of preferreds, but I don’t seem to have written that down anywhere.
Speaking of the AX.PR.G redemption, how about that AX.PR.I, eh? It’s been absolutely clobbered since the company announced the term extension on March 31.
The Artis E series has also been hammered the past 2 months. The I series now yields approx 9.75%. If the 5 year bond rate is 3% at the end of August, then the E series yield will also be in the double digit range. Artis has re-purchased some of the prefs as part of their NCIB, more active as the decline gathered steam.
End of month window dressing may continue into Monday. And it appears that some institutions aren’t interested in collecting dividends. I noticed a heavy tape for issuers that go ex-div next Tuesday.
guess we’ve effectively had 3 meltdowns in the space now. the first two brought on by negative rate mania and this one oddly by the opposite!
i do recall brookfield being quite active with ncib activity in the first wave yrs back but other than that, struggle to think of any issuers that do use ncib’s on prefs (nice to hear at least AX is out there now). love to know of others if you do…
i pressed RCG’s CFO on why they don’t now that FCF abundant after reorg costs and buildout of head office complete and he said he felt they have a 30% ROC for recruitment of IAs (vs the 13.5% on prefs on reset basis)! imagine that, 30%! the delusion or infatuation to grow business is endless with most co’s