Canada’s economic growth picked up at the start of the year, but the results fell short of expectations and follow an extended period of stagnation as the country struggles with higher interest rates.
Real gross domestic product rose at an annualized rate of 1.7 per cent in the first quarter, Statistics Canada said Friday in a report, undershooting analyst expectations of 2.2 per cent and Bank of Canada estimates of 2.8 per cent. Statscan also revised fourth-quarter growth down to 0.1 per cent annualized from 1 per cent.
Friday’s GDP report was the last major economic release before the Bank of Canada’s policy announcement on June 5, one of the most anticipated decisions in recent memory.
Investors are leaning toward an interest rate cut next week, which would mark the start of a policy easing cycle. To help it curb inflation, the Bank of Canada hiked its benchmark interest rate to 5 per cent from emergency lows of 0.25 per cent over a series of decisions in 2022 and 2023.
…
Interest rate swaps, which capture market expectations of monetary policy, were pricing in a near 80-per-cent chance that the central bank trims its policy interest rate by a quarter-percentage-point, according to Bloomberg data as of Friday morning.
Ninepoint Partners LP was mentioned here on December 23, 2023 due to its efforts to introduce Canadian Large Cap Leaders Split Corp., which has made a decent start in its life as a SplitShare Corporation. Now they’re being mentioned again for a less happy reason:
Ninepoint Partners LP will stop paying cash distributions on three private debt funds that collectively manage $2-billion in assets and will also skip the current redemption window on its flagship private debt fund, preventing investors from cashing out in the second quarter.
…
“After reviewing our various liquidity options, Ninepoint Partners and our subadvisors have determined that the best path forward to preserve liquidity and balance the long-term goals of these three affected funds is to redirect future distribution into additional units rather than cash distributions starting July 1, 2024,” Ninepoint said in a statement to The Globe.In its memos to investment advisers, Ninepoint did not specify why it has halted cash distributions on the three funds. The asset manager wrote that it has been “reviewing various options with the aim of creating liquidity for the fund,” adding that, “at this time, liquidity generated will be used to honour ongoing commitments to portfolio companies, satisfy the fund’s redemption provisions, and meet operational requirements.”
Ninepoint is also changing some redemption protocols. Typically, its private debt investors are able to cash out once a quarter, up to a maximum of 5 per cent of total fund assets. This quarter, it is skipping redemptions altogether on the $1.2-billion fund it co-manages with Third Eye.
“Currently, the fund is unable to make redemption payments due to having insufficient net cash for this purpose,” Ninepoint wrote in a memo to advisers. “The fund must balance redemptions with its obligations to allocate sufficient resources to effectively execute its long-term strategy, ultimately benefiting all unitholders.”
Holy Smokes. Cutting off redemptions is bad enough, but they’ve cut off distributions too, which sounds much more serious. I’d like to get a look at their books … are they carrying a big proportion of defaulting bonds? Or a big proportion of Pay-In-Kind bonds, which are really zero-coupon bonds dressed up? Or do they, for some reason, sincerely believe that stopping distributions in order to fund redemptions is a good idea? Stay tuned! Thanks to Assiduous Reader pugwash for the heads-up!
Meanwhile, in US political news (no, I’m not going to write about what you think I’m going to write about):
Salem Media Group, the right-wing talk radio network owner, issued a public apology and said it would stop distributing a discredited 2020 election conspiracy theory film after a Georgia man wrongly accused of voter fraud sued the company for defamation.
The Georgia man, Mark Andrews, said in his 2022 lawsuit that “2000 Mules,” a film and book by far-right activist Dinesh D’Souza contained a string of bogus claims about the 2020 election, leading to threats of violence against him and his family.
Andrews said the film, which has been repeatedly promoted by Donald Trump and widely circulated in right-wing media as supposed proof that the 2020 election was stolen, had severely damaged his reputation.
…
In the “2000 Mules” film, Andrews was featured on video with his face blurred depositing his ballot, along with those belonging to his family, into a drop box in what the film purported was a so-called “mule” operation.“What you are seeing is a crime,” a voiceover from D’Souza declared. “These are fraudulent votes.”
Salem said in its Friday statement that it “relied on representations” that D’Souza had made.
“We have learned that the Georgia Bureau of Investigation has cleared Mr. Andrews of illegal voting activity in connection with the event depicted in 2000 Mules,” the company said.
… and:
Donald Trump’s former lawyer Rudy Giuliani is one step closer to being disbarred.
The professional responsibility board in Washington, DC, recommended Friday that the ex-New York mayor and federal prosecutor lose his law license because of his involvement in a bogus 2020 election fraud lawsuit.
Giuliani’s law license had already been suspended due to his work boosting Trump’s false assertions about his electoral loss. It is up to the DC Court of Appeals to decide whether to permanently disbar Giuliani.
… and this is also a Good Thing. Though the mills of God grind slowly; yet they grind exceeding small!
| 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 | 0.5819 % | 2,310.8 |
| FixedFloater | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.5819 % | 4,432.1 |
| Floater | 10.41 % | 10.74 % | 65,256 | 8.88 | 1 | 0.5819 % | 2,554.2 |
| OpRet | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.0674 % | 3,447.0 |
| SplitShare | 4.88 % | 6.48 % | 28,688 | 1.36 | 8 | -0.0674 % | 4,116.5 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.0674 % | 3,211.8 |
| Perpetual-Premium | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.1760 % | 2,709.7 |
| Perpetual-Discount | 6.33 % | 6.53 % | 51,212 | 13.11 | 27 | 0.1760 % | 2,954.8 |
| FixedReset Disc | 5.23 % | 7.30 % | 119,820 | 11.92 | 54 | -0.0646 % | 2,605.6 |
| Insurance Straight | 6.28 % | 6.37 % | 58,950 | 13.42 | 21 | -0.9408 % | 2,890.6 |
| FloatingReset | 8.99 % | 9.21 % | 32,303 | 10.10 | 2 | -0.7927 % | 2,816.4 |
| FixedReset Prem | 6.91 % | 6.47 % | 204,405 | 3.05 | 2 | -0.0785 % | 2,535.7 |
| FixedReset Bank Non | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.0646 % | 2,663.5 |
| FixedReset Ins Non | 4.98 % | 6.81 % | 105,886 | 13.14 | 14 | 2.4088 % | 2,852.1 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| CU.PR.C | FixedReset Disc | -3.53 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2054-05-31 Maturity Price : 20.50 Evaluated at bid price : 20.50 Bid-YTW : 7.30 % |
| GWO.PR.I | Insurance Straight | -2.80 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2054-05-31 Maturity Price : 17.41 Evaluated at bid price : 17.41 Bid-YTW : 6.47 % |
| SLF.PR.H | FixedReset Ins Non | -2.20 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2054-05-31 Maturity Price : 19.53 Evaluated at bid price : 19.53 Bid-YTW : 6.96 % |
| BIP.PR.F | FixedReset Disc | -1.74 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2054-05-31 Maturity Price : 20.35 Evaluated at bid price : 20.35 Bid-YTW : 8.12 % |
| BN.PF.E | FixedReset Disc | -1.52 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2054-05-31 Maturity Price : 18.15 Evaluated at bid price : 18.15 Bid-YTW : 8.55 % |
| CM.PR.P | FixedReset Disc | -1.42 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2054-05-31 Maturity Price : 22.19 Evaluated at bid price : 22.90 Bid-YTW : 6.47 % |
| MFC.PR.Q | FixedReset Ins Non | -1.29 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2054-05-31 Maturity Price : 22.73 Evaluated at bid price : 23.75 Bid-YTW : 6.50 % |
| CCS.PR.C | Insurance Straight | -1.27 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2054-05-31 Maturity Price : 19.36 Evaluated at bid price : 19.36 Bid-YTW : 6.59 % |
| GWO.PR.M | Insurance Straight | -1.20 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2054-05-31 Maturity Price : 22.21 Evaluated at bid price : 22.48 Bid-YTW : 6.45 % |
| MFC.PR.I | FixedReset Ins Non | -1.06 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2054-05-31 Maturity Price : 23.08 Evaluated at bid price : 24.34 Bid-YTW : 6.61 % |
| TD.PF.D | FixedReset Disc | 1.00 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2054-05-31 Maturity Price : 22.73 Evaluated at bid price : 23.23 Bid-YTW : 6.78 % |
| IFC.PR.A | FixedReset Ins Non | 1.02 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2054-05-31 Maturity Price : 19.83 Evaluated at bid price : 19.83 Bid-YTW : 6.83 % |
| BIP.PR.E | FixedReset Disc | 1.19 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2054-05-31 Maturity Price : 21.80 Evaluated at bid price : 22.15 Bid-YTW : 7.58 % |
| BN.PR.M | Perpetual-Discount | 1.21 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2054-05-31 Maturity Price : 18.40 Evaluated at bid price : 18.40 Bid-YTW : 6.59 % |
| GWO.PR.Q | Insurance Straight | 1.29 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2054-05-31 Maturity Price : 20.25 Evaluated at bid price : 20.25 Bid-YTW : 6.37 % |
| MFC.PR.M | FixedReset Ins Non | 1.39 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2054-05-31 Maturity Price : 21.51 Evaluated at bid price : 21.85 Bid-YTW : 6.89 % |
| CU.PR.D | Perpetual-Discount | 1.42 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2054-05-31 Maturity Price : 19.35 Evaluated at bid price : 19.35 Bid-YTW : 6.38 % |
| GWO.PR.H | Insurance Straight | 1.53 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2054-05-31 Maturity Price : 19.19 Evaluated at bid price : 19.19 Bid-YTW : 6.33 % |
| PWF.PR.S | Perpetual-Discount | 1.95 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2054-05-31 Maturity Price : 18.80 Evaluated at bid price : 18.80 Bid-YTW : 6.48 % |
| GWO.PR.N | FixedReset Ins Non | 2.06 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2054-05-31 Maturity Price : 15.25 Evaluated at bid price : 15.25 Bid-YTW : 7.64 % |
| MFC.PR.N | FixedReset Ins Non | 6.11 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2054-05-31 Maturity Price : 21.35 Evaluated at bid price : 21.35 Bid-YTW : 6.94 % |
| IFC.PR.C | FixedReset Ins Non | 38.63 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2054-05-31 Maturity Price : 21.59 Evaluated at bid price : 22.00 Bid-YTW : 6.80 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| TD.PF.C | FixedReset Disc | 361,477 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2054-05-31 Maturity Price : 22.23 Evaluated at bid price : 22.96 Bid-YTW : 6.45 % |
| TD.PF.B | FixedReset Disc | 185,395 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2054-05-31 Maturity Price : 23.35 Evaluated at bid price : 24.43 Bid-YTW : 6.14 % |
| FTS.PR.M | FixedReset Disc | 176,380 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2054-05-31 Maturity Price : 20.15 Evaluated at bid price : 20.15 Bid-YTW : 7.67 % |
| POW.PR.D | Perpetual-Discount | 77,000 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2054-05-31 Maturity Price : 19.50 Evaluated at bid price : 19.50 Bid-YTW : 6.52 % |
| RY.PR.H | FixedReset Disc | 68,176 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2054-05-31 Maturity Price : 23.48 Evaluated at bid price : 24.45 Bid-YTW : 6.10 % |
| TD.PF.A | FixedReset Disc | 65,050 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2054-05-31 Maturity Price : 22.93 Evaluated at bid price : 23.75 Bid-YTW : 6.25 % |
| There were 11 other index-included issues trading in excess of 10,000 shares. | |||
| Wide Spread Highlights | ||
| Issue | Index | Quote Data and Yield Notes |
| MFC.PR.M | FixedReset Ins Non | Quote: 21.85 – 23.50 Spot Rate : 1.6500 Average : 1.0279 YTW SCENARIO |
| GWO.PR.I | Insurance Straight | Quote: 17.41 – 18.50 Spot Rate : 1.0900 Average : 0.6917 YTW SCENARIO |
| BN.PF.B | FixedReset Disc | Quote: 20.07 – 20.90 Spot Rate : 0.8300 Average : 0.5519 YTW SCENARIO |
| CU.PR.C | FixedReset Disc | Quote: 20.50 – 21.25 Spot Rate : 0.7500 Average : 0.5148 YTW SCENARIO |
| BIP.PR.F | FixedReset Disc | Quote: 20.35 – 21.15 Spot Rate : 0.8000 Average : 0.5936 YTW SCENARIO |
| TD.PF.E | FixedReset Disc | Quote: 22.80 – 23.63 Spot Rate : 0.8300 Average : 0.6272 YTW SCENARIO |
Maybe issues with certain holdings arose in May.
With the exception of the 1 year performance of the Canadian Senior Debt Funds (rising interest rates), performance as of most recent valuations was not bad. Let’s re-visit when the May NAVs are posted next week.
Ninepoint Canadian Senior Debt Fund – Series F
Returns as of April 30, 2024
YTD: 1.95%
1 Yr: -12.58%
Annualized Distn Yield: 7.18%
12 month Trailing Yield: 2.87%
Ninepoint-TEC Private Credit Fund II
Returns as of April 30, 2024
YTD: 4.88%
1 Yr: 6.76%
Annualized Distn Yield: 8.42%
12 month Trailing Yield: 7.47%
Ninepoint Alternative Income Fund – Series F
Returns as of March 28, 2024
YTD: 3.95%
1 Yr: 1.93%
Annualized Distn Yield: 7.65%
12 month Trailing Yield: 6.69%
[…] although the spread has narrowed considerably despite a bounce upwards in May; on May 31, I reported median YTWs of 7.30% and 6.53%, respectively, for these two indices; compare with mean […]