| HIMI Index Changes, January 30, 2009 | |||
| Issue | From | To | Because |
| BCE.PR.S | Ratchet | Scraps | Volume |
| BAM.PR.G | FixFloat | Scraps | Volume |
| FAL.PR.B | Scraps | Ratchet | Volume |
The relegation of BCE.PR.S and BAM.PR.G reverses changes made at December month-end.
The addition of FAL.PR.B to the Ratchet index is highly annoying: the outstanding call for redemption has boosted its price considerably.
There were the following intra-month changes:
| HIMI Index Changes during January 2009 | |||
| Issue | Action | Index | Because |
| RY.PR.P | Add | FixedReset | New Issue |
| NA.PR.O | Add | FixedReset | New Issue |
| TD.PR.E | Add | FixedReset | New Issue |
| BNS.PR.T | Add | FixedReset | New Issue |
| RY.PR.R | Add | FixedReset | New Issue |
| NA.PR.P | Add | FixedReset | New Issue |
| TD.PR.G | Add | FixedReset | New Issue |
| BNS.PR.X | Add | FixedReset | New Issue |
I’d be interested in hearing your highly informed opinion on
a) whether this blizzard of issuance is over, and
b) the relative values of the call/reset options among what are very similar issues from one issuer, e.g. BNS.PR.S vs .T vs .X
a) Well, I’ll admit to a certain feeling of surprise? relief? interest? that nothing was announced today.
I suspect more is coming. OSFI has bent over backwards to give the banks all the issuance room they need and they are under political pressure to lend, lend, lend so we can spend, spend, spend. There is also at least some potential for buying banks in the States – Canadian banks can finance it, Americans can’t, not really.
So, throwing caution to wind and taking a view – especially since it doesn’t have any effect on my investment strategy – I’ll say we see more issues in February. Certainly the sizes of many of January’s issues got bumped up, and there is a lot of desire on the part of the brokerages [especially wholly-owned ones] who don’t have much else to sell at this point.
b) All have a 6.25% initial fixed rate.
S is +384 (but still isn’t trading)
T is +414
X is +446
Geez, Norbert, can’t you ever ask an easy one? I haven’t forgotten your other query, by the way, I’ve just put it on the back burner until I’ve thought of how to express my views.
Clearly it’s worth something. It will either increase the yield for the next period, or increase the certainty of redemption.
Whether I can express my math in those terms is another question! I’ll have to put that one on hold, too!
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