CU Inc. has announced:
that it will issue $580,000,000 of 2.963% Debentures maturing on September 7, 2049, at a price of $100.00 to yield 2.963%. This issue was sold by RBC Dominion Securities Inc., BMO Nesbitt Burns Inc., TD Securities Inc., Scotia Capital Inc., CIBC World Markets Inc. and MUFG Securities (Canada), Ltd. Proceeds from the issue will be used to finance capital expenditures, to repay existing indebtedness, and for other general corporate purposes.
CIU.PR.A, a Straight Perpetual, 4.60% that was announced 2007-4-3. Its credit quality with respect to the CIU corporate structure was discussed long ago.
CIU.PR.A closed 2019-9-3 at 20.91-53 to yield 5.54%-34. Call it a midpoint of 5.44%, and the interest equivalent of that with a conversion factor of 1.3x is 7.07%. Therefore, the Seniority Spread between this issue and the new bond is about 411bp, slightly but not significantly tighter than the 420bp reported for the more general measures of bond and preferred yields on August 28.
This follows my highlighting of the IGM.PR.B refunding on 2019-5-1 and the TRP long bond on 2019-4-10.
This data point supports the accuracy of the Seniority Spread calculated every Wednesday on PrefBlog, with long-term charts being published periodically, eg (chart end-date 2019-8-9):
Click for Big
It also highlights just how cheap Straight Preferreds are compared to long-term corporate bonds!