Anybody want to buy a railcar leasing operation, cheap?
CIT Group Inc., the commercial lender seeking to avoid collapse, may sell units that lease railcars and aircraft to raise cash, said a person with knowledge of its plans.
The railcar business is the most likely to be sold, and CIT has identified about a half dozen potentially interested bidders, the person said, speaking on condition of anonymity because the talks are private. No final decisions on which units will be kept or sold have been made, the person said. CIT put the unit up for sale last year, only to take it off the market when bids came in below expectations, the person said.
They’re making the bond tender more coercive:
CIT Group Inc., the 101-year-old commercial lender seeking to avoid collapse, reworked its tender offer for $1 billion of notes maturing next month to encourage investors to deliver the debt to the company sooner.
Investors that tender their notes by July 31 will get $775 plus a $50 early delivery payment for every $1,000 of securities they own, the New York-based company said today in a regulatory filing. That compares with a previous offer of $800 plus an early payment of $25, CIT said. The offer expires on Aug. 14.
I’d happily tender for $825 … provided I got 200 common shares as well as the cash. Why should the creditors give a free gift to the owners?
Guido Tabellini of Bocconi University writes a review article for VoxEU, Lessons for the future: Ideas and rules for the world in the aftermath of the storm, Part I:
It’s time to start drawing conclusions about the global crisis. This column, the first of a two-part series, assesses the causes and nature of the problems. Although the crisis originated in financial market failings, policymakers are much to blame. Regulatory failure amplified private sector errors, and poorly planned policy responses exacerbated the troubles.
…
There are two aspects of regulation that have amplified the effects of the initial shock: (i) the procyclicality of leverage, induced by constraints on banks’ equity, and (ii) accounting principles that require assets to be evaluated according to their market value. In case of a loss on investments, which erodes the capital of financial intermediaries, capital adequacy constraints under the Basel accord require reduced leverage and thus force banks to sell assets to obtain liquidity. The problem is thus exacerbated: forced sales reduce the market price of assets, worsening the balance sheets of other investors and inducing further forced sales of assets, in a vicious circle.
Volume was off a bit on the day, but the market continued onwards and upwards. Price volatility was reduced, with only BNA.PR.A showing a loss of more than 1% among the HIMIPref™ index included issues.
| 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 | 1.0204 % | 1,181.2 |
| FixedFloater | 7.25 % | 5.43 % | 36,484 | 16.73 | 1 | 1.4885 % | 2,118.3 |
| Floater | 3.22 % | 3.87 % | 77,054 | 17.70 | 3 | 1.0204 % | 1,475.7 |
| OpRet | 4.95 % | -2.18 % | 139,808 | 0.09 | 15 | 0.0937 % | 2,228.4 |
| SplitShare | 6.05 % | 6.65 % | 93,001 | 4.13 | 4 | -0.1182 % | 1,937.5 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.0937 % | 2,037.6 |
| Perpetual-Premium | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.3829 % | 1,818.3 |
| Perpetual-Discount | 6.11 % | 6.15 % | 158,003 | 13.67 | 71 | 0.3829 % | 1,674.6 |
| FixedReset | 5.51 % | 4.15 % | 589,205 | 4.21 | 40 | 0.2672 % | 2,092.5 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| BNA.PR.A | SplitShare | -1.18 % | Called for redemption (which means the YTW Scenario shown below does not apply!). YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2010-09-30 Maturity Price : 25.00 Evaluated at bid price : 25.10 Bid-YTW : 6.65 % |
| CM.PR.D | Perpetual-Discount | 1.02 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2039-07-24 Maturity Price : 23.46 Evaluated at bid price : 23.75 Bid-YTW : 6.07 % |
| RY.PR.L | FixedReset | 1.11 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2014-03-26 Maturity Price : 25.00 Evaluated at bid price : 26.49 Bid-YTW : 4.10 % |
| IAG.PR.A | Perpetual-Discount | 1.14 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2039-07-24 Maturity Price : 17.75 Evaluated at bid price : 17.75 Bid-YTW : 6.56 % |
| BNS.PR.T | FixedReset | 1.17 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2014-05-25 Maturity Price : 25.00 Evaluated at bid price : 27.62 Bid-YTW : 3.88 % |
| PWF.PR.K | Perpetual-Discount | 1.23 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2039-07-24 Maturity Price : 19.75 Evaluated at bid price : 19.75 Bid-YTW : 6.31 % |
| CM.PR.E | Perpetual-Discount | 1.24 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2039-07-24 Maturity Price : 22.69 Evaluated at bid price : 22.90 Bid-YTW : 6.14 % |
| SLF.PR.F | FixedReset | 1.26 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2014-07-30 Maturity Price : 25.00 Evaluated at bid price : 27.35 Bid-YTW : 4.19 % |
| BNS.PR.N | Perpetual-Discount | 1.34 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2039-07-24 Maturity Price : 21.91 Evaluated at bid price : 22.00 Bid-YTW : 6.00 % |
| POW.PR.C | Perpetual-Discount | 1.47 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2039-07-24 Maturity Price : 22.37 Evaluated at bid price : 22.78 Bid-YTW : 6.41 % |
| BAM.PR.G | FixedFloater | 1.49 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2039-07-24 Maturity Price : 25.00 Evaluated at bid price : 15.00 Bid-YTW : 5.43 % |
| BAM.PR.M | Perpetual-Discount | 1.55 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2039-07-24 Maturity Price : 16.41 Evaluated at bid price : 16.41 Bid-YTW : 7.34 % |
| MFC.PR.C | Perpetual-Discount | 2.00 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2039-07-24 Maturity Price : 18.37 Evaluated at bid price : 18.37 Bid-YTW : 6.21 % |
| TRI.PR.B | Floater | 2.72 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2039-07-24 Maturity Price : 16.25 Evaluated at bid price : 16.25 Bid-YTW : 2.43 % |
| MFC.PR.B | Perpetual-Discount | 2.93 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2039-07-24 Maturity Price : 18.96 Evaluated at bid price : 18.96 Bid-YTW : 6.22 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| SLF.PR.A | Perpetual-Discount | 82,219 | RBC bought blocks of 13,200 and 10,700 shares from National Bank at 18.77. Nesbitt crossed 15,000 at 18.76. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2039-07-24 Maturity Price : 18.74 Evaluated at bid price : 18.74 Bid-YTW : 6.42 % |
| RY.PR.R | FixedReset | 59,010 | National crossed 30,000 at 27.99. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-03-26 Maturity Price : 25.00 Evaluated at bid price : 27.87 Bid-YTW : 3.47 % |
| TD.PR.R | Perpetual-Discount | 57,100 | Desjardins crossed 50,000 at 23.85. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2039-07-24 Maturity Price : 23.59 Evaluated at bid price : 23.77 Bid-YTW : 5.91 % |
| MFC.PR.E | FixedReset | 55,960 | RBC crossed 37,400 at 26.75. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-10-19 Maturity Price : 25.00 Evaluated at bid price : 26.75 Bid-YTW : 4.30 % |
| BNS.PR.K | Perpetual-Discount | 52,050 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2039-07-24 Maturity Price : 20.54 Evaluated at bid price : 20.54 Bid-YTW : 5.88 % |
| BNS.PR.N | Perpetual-Discount | 38,817 | Desardins bought 10,000 from National Bank at 22.00. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2039-07-24 Maturity Price : 21.91 Evaluated at bid price : 22.00 Bid-YTW : 6.00 % |
| There were 38 other index-included issues trading in excess of 10,000 shares. | |||