A day enlivened by the CrowdStrike-Microsoft Outage:
Wall Street’s main indexes fell on Friday, deepening a sell-off driven by tech stocks and mixed earnings, while investors assessed the impact of a global cyber outage that knocked down CrowdStrike’s shares to an over two-month low.
Cybersecurity firm CrowdStrike slumped 11.2 per cent after an update to one of its products appeared to trigger an outage that affected customers using Microsoft’s Windows Operating System, disrupting businesses across sectors.
Major U.S. airlines ordered ground stops citing communication issues, with the Euronext exchange and London Stock Exchange Group’s Workspace news and data platform also facing issues. LSEG later said its data and services were back online.
Microsoft slipped 0.7 per cent to an over one-month low, on track for a four-day decline, driven by a rout in tech stocks.
I’m beginning to think that legislation making software providers with a market share greater than X liable for screw-ups via class actions would be a good idea. Cap the potential liability because otherwise nobody in their right mind would write software, but, by golly, make it hurt! They won’t notice, otherwise.
The culture of not caring about the quality of one’s work is becoming pervasive. I believe it’s related to the growing lack of trust in institutions, but I’ll have to wait until I’m reincarnated with a new career to look into that one properly.
| HIMIPref™ Preferred Indices These values reflect the December 2008 revision of the HIMIPref™ Indices Values are provisional and are finalized monthly |
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| 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 | -0.3057 % | 2,177.0 |
| FixedFloater | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.3057 % | 4,175.6 |
| Floater | 10.65 % | 10.85 % | 24,540 | 8.90 | 2 | -0.3057 % | 2,406.4 |
| OpRet | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.1573 % | 3,510.9 |
| SplitShare | 4.76 % | 6.59 % | 30,697 | 1.23 | 6 | 0.1573 % | 4,192.8 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.1573 % | 3,271.4 |
| Perpetual-Premium | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.1985 % | 2,719.8 |
| Perpetual-Discount | 6.33 % | 6.47 % | 58,053 | 13.25 | 28 | -0.1985 % | 2,965.8 |
| FixedReset Disc | 5.13 % | 7.02 % | 113,749 | 12.50 | 49 | -0.3038 % | 2,635.7 |
| Insurance Straight | 6.07 % | 6.35 % | 65,337 | 13.40 | 21 | 0.0746 % | 2,940.5 |
| FloatingReset | 9.15 % | 8.90 % | 28,756 | 10.47 | 4 | 0.2176 % | 2,800.0 |
| FixedReset Prem | 5.82 % | 6.24 % | 248,601 | 2.96 | 8 | 0.1038 % | 2,537.7 |
| FixedReset Bank Non | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.3038 % | 2,694.2 |
| FixedReset Ins Non | 5.27 % | 6.64 % | 89,761 | 13.07 | 14 | -0.7624 % | 2,789.3 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| BN.PF.E | FixedReset Disc | -7.69 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2054-07-19 Maturity Price : 17.40 Evaluated at bid price : 17.40 Bid-YTW : 8.46 % |
| MFC.PR.Q | FixedReset Ins Non | -5.34 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2054-07-19 Maturity Price : 21.80 Evaluated at bid price : 22.15 Bid-YTW : 6.80 % |
| PWF.PR.L | Perpetual-Discount | -4.24 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2054-07-19 Maturity Price : 18.95 Evaluated at bid price : 18.95 Bid-YTW : 6.77 % |
| MFC.PR.F | FixedReset Ins Non | -4.04 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2054-07-19 Maturity Price : 16.40 Evaluated at bid price : 16.40 Bid-YTW : 6.90 % |
| BN.PR.Z | FixedReset Disc | -3.31 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2054-07-19 Maturity Price : 20.48 Evaluated at bid price : 20.48 Bid-YTW : 7.79 % |
| SLF.PR.G | FixedReset Ins Non | -2.63 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2054-07-19 Maturity Price : 16.65 Evaluated at bid price : 16.65 Bid-YTW : 6.98 % |
| BN.PF.H | FixedReset Disc | -2.48 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2054-07-19 Maturity Price : 23.16 Evaluated at bid price : 23.60 Bid-YTW : 7.79 % |
| BIP.PR.A | FixedReset Disc | -2.28 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2054-07-19 Maturity Price : 21.83 Evaluated at bid price : 22.33 Bid-YTW : 7.62 % |
| BN.PF.D | Perpetual-Discount | -1.40 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2054-07-19 Maturity Price : 18.29 Evaluated at bid price : 18.29 Bid-YTW : 6.78 % |
| BIP.PR.B | FixedReset Disc | -1.22 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2054-07-19 Maturity Price : 23.86 Evaluated at bid price : 24.25 Bid-YTW : 7.98 % |
| BIK.PR.A | FixedReset Prem | 1.54 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2029-04-01 Maturity Price : 25.00 Evaluated at bid price : 25.65 Bid-YTW : 6.97 % |
| FTS.PR.H | FixedReset Disc | 1.60 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2054-07-19 Maturity Price : 15.25 Evaluated at bid price : 15.25 Bid-YTW : 7.72 % |
| IFC.PR.A | FixedReset Ins Non | 1.64 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2054-07-19 Maturity Price : 19.20 Evaluated at bid price : 19.20 Bid-YTW : 6.67 % |
| PVS.PR.K | SplitShare | 2.28 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2029-05-31 Maturity Price : 25.00 Evaluated at bid price : 23.80 Bid-YTW : 5.75 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| BMO.PR.T | FixedReset Disc | 326,366 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2054-07-19 Maturity Price : 23.61 Evaluated at bid price : 24.76 Bid-YTW : 5.71 % |
| PWF.PR.Z | Perpetual-Discount | 301,734 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2054-07-19 Maturity Price : 20.10 Evaluated at bid price : 20.10 Bid-YTW : 6.44 % |
| BN.PF.E | FixedReset Disc | 240,459 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2054-07-19 Maturity Price : 17.40 Evaluated at bid price : 17.40 Bid-YTW : 8.46 % |
| CU.PR.E | Perpetual-Discount | 199,735 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2054-07-19 Maturity Price : 19.30 Evaluated at bid price : 19.30 Bid-YTW : 6.46 % |
| RY.PR.N | Perpetual-Discount | 191,578 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2054-07-19 Maturity Price : 23.97 Evaluated at bid price : 24.25 Bid-YTW : 5.12 % |
| SLF.PR.G | FixedReset Ins Non | 190,686 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2054-07-19 Maturity Price : 16.65 Evaluated at bid price : 16.65 Bid-YTW : 6.98 % |
| IFC.PR.F | Insurance Straight | 187,834 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2054-07-19 Maturity Price : 22.14 Evaluated at bid price : 22.14 Bid-YTW : 6.05 % |
| MFC.PR.F | FixedReset Ins Non | 178,024 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2054-07-19 Maturity Price : 16.40 Evaluated at bid price : 16.40 Bid-YTW : 6.90 % |
| BIP.PR.A | FixedReset Disc | 154,872 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2054-07-19 Maturity Price : 21.83 Evaluated at bid price : 22.33 Bid-YTW : 7.62 % |
| There were 21 other index-included issues trading in excess of 10,000 shares. | |||
| Wide Spread Highlights | ||
| Issue | Index | Quote Data and Yield Notes |
| BN.PF.E | FixedReset Disc | Quote: 17.40 – 19.25 Spot Rate : 1.8500 Average : 1.1172 YTW SCENARIO |
| PWF.PR.L | Perpetual-Discount | Quote: 18.95 – 20.50 Spot Rate : 1.5500 Average : 0.8658 YTW SCENARIO |
| MFC.PR.Q | FixedReset Ins Non | Quote: 22.15 – 24.00 Spot Rate : 1.8500 Average : 1.2409 YTW SCENARIO |
| IFC.PR.C | FixedReset Ins Non | Quote: 20.92 – 22.25 Spot Rate : 1.3300 Average : 0.7708 YTW SCENARIO |
| IFC.PR.E | Insurance Straight | Quote: 21.55 – 23.22 Spot Rate : 1.6700 Average : 1.2408 YTW SCENARIO |
| CU.PR.C | FixedReset Disc | Quote: 20.70 – 21.88 Spot Rate : 1.1800 Average : 0.8193 YTW SCENARIO |
James:
I see RY issued a new institutional NVCC Fixed Reset Pref (see press release from July 17 below) at an initial 6.698% with a reset spread of 3.4%! Although institutional, new issues should breathe some life into the Pref market. After 3 RY Pref redemptions in 2024 of issues with Reset Spreads of 2.21 to 2.38% in favour of LRCNs, 3.4% seems a little shocking and would seem to cast some doubt on potential redemption of RY.PR.J in May 2025 (Reset Spread = 2.74%).
Your thoughts?
Is this going to back up an LRCN – i.e. a sale to ComputerShare?
Is the “pretend debt” of LRCN model breaking down?
Is this somehow cheaper than a public pref issue?
What is the yield premium for a non-marketable Pref?
Implications for other outstanding RY Prefs?
Thanks
Prefhound
Royal Bank of Canada announces Institutional NVCC Preferred Share Issue
TORONTO, July 17, 2024 – Royal Bank of Canada (TSX: RY) and (NYSE: RY) today announced a domestic public offering of Non-Cumulative 5-Year Fixed Rate Reset First Preferred Shares, Series BW (“Preferred Shares Series BW”).
Royal Bank of Canada will issue to certain institutional investors 600 thousand Preferred Shares Series BW priced at $1,000 per share to raise gross proceeds of $600 million.
The Preferred Shares Series BW will yield 6.698 per cent annually, payable semi-annually, as and when declared by the Board of Directors of Royal Bank of Canada, for the initial period ending November 24, 2029. Thereafter, the dividend rate will reset every five years at a rate equal to 3.40 per cent over the 5-year Government of Canada bond yield.
Subject to regulatory approval, the bank may redeem the Preferred Shares Series BW in whole or in part at par, during the period from October 24, 2029 to and including November 24, 2029 and during the period from October 24 to and including November 24 every five years thereafter, on not less than 15 days and not more than 60 days’ notice.