This is an interesting issue, a member of the PerpetualPremium index. It’s rated Pfd-2(low) by DBRS, where it was confirmed in their latest review of 2005-09-20. The issue had a closing quotation of 25.22-35 on the TSX on 2006-08-16.
The redemption schedule is:
- Redemption 2004-07-15 2005-07-14 26.000000
- Redemption 2005-07-15 2006-07-14 25.750000
- Redemption 2006-07-15 2007-07-14 25.500000
- Redemption 2007-07-15 2008-07-14 25.250000
- Redemption 2008-07-15 2999-12-29 25.000000
so it is currently trading at a discount to its current redemption price, but at a discount to its future redemption price.
Analysis of the schedule and its current price gives this calculation for portfolioYield (from the bid-side of the market):
- Call 2006-09-15 YTM: 26.33 % [Restricted: 2.16 %] (Prob: 10.32 %)
- Call 2006-10-15 YTM: 15.67 % [Restricted: 2.57 %] (Prob: 5.69 %)
- Call 2006-12-14 YTM: 10.54 % [Restricted: 3.46 %] (Prob: 5.64 %)
- Call 2007-04-13 YTM: 8.02 % [Restricted: 5.27 %] (Prob: 5.05 %)
- Call 2007-08-14 YTM: 6.23 % [Restricted: 6.19 %] (Prob: 7.39 %)
- Call 2008-08-14 YTM: 5.42 % [Restricted: 5.42 %] (Prob: 7.06 %)
- Limit Maturity 2036-08-16 YTM: 5.60 % [Restricted: 5.60 %] (Prob: 58.87 %)
and the cash flow analysis of the YTW scenario is:
- 2006-10-15 DIVIDEND 0.35 0.991246 0.35
- 2007-01-15 DIVIDEND 0.35 0.977971 0.34
- 2007-04-15 DIVIDEND 0.35 0.965158 0.34
- 2007-07-15 DIVIDEND 0.35 0.952372 0.33
- 2007-10-15 DIVIDEND 0.35 0.939618 0.33
- 2008-01-15 DIVIDEND 0.35 0.927035 0.32
- 2008-04-15 DIVIDEND 0.35 0.914755 0.32
- 2008-07-15 DIVIDEND 0.35 0.902637 0.32
- 2008-08-14 FINAL DIVIDEND 0.11 0.898677 0.10
- 2008-08-14 MATURITY 25.00 0.898677 22.47
The averageTradingValue of the shares (as defined by HIMIPref™) is only 34,088 … too small to attract institutional players, but quite large enough for the occasional retail purchaser.
The issue now has the highest YTW of any issue in the HIMI Proprietary PerpetualPremium index – even if we measure the YTW from the ask price of 25.35.
This entry was posted on Thursday, August 17th, 2006 at 1:33 pm and is filed under Issue Comments. You can follow any responses to this entry through the RSS 2.0 feed.
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W.PR.J
This is an interesting issue, a member of the PerpetualPremium index. It’s rated Pfd-2(low) by DBRS, where it was confirmed in their latest review of 2005-09-20. The issue had a closing quotation of 25.22-35 on the TSX on 2006-08-16.
The redemption schedule is:
so it is currently trading at a discount to its current redemption price, but at a discount to its future redemption price.
Analysis of the schedule and its current price gives this calculation for portfolioYield (from the bid-side of the market):
and the cash flow analysis of the YTW scenario is:
The averageTradingValue of the shares (as defined by HIMIPref™) is only 34,088 … too small to attract institutional players, but quite large enough for the occasional retail purchaser.
The issue now has the highest YTW of any issue in the HIMI Proprietary PerpetualPremium index – even if we measure the YTW from the ask price of 25.35.
This entry was posted on Thursday, August 17th, 2006 at 1:33 pm and is filed under Issue Comments. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.