YPG Holdings has released its 3Q09 financials with some information of interest to holders of the captioned issues. According to the Management Discussion & Analysis:
On June 9, 2009, YPG Holdings Inc. received approval from the Toronto Stock Exchange on its notice of intention to make a normal course issuer bid for its preferred shares Series 1 and 2 through the facilities of the Toronto Stock Exchange from June 11, 2009 to June 10, 2010, in accordance with applicable regulations of the Toronto Stock Exchange. Under its normal course issuer bid, the Fund intends to purchase for cancellation up to 1,200,000 and 800,000 of its series of preferred shares outstanding on June 9, 2009. These figures represent 10% of the public float of each series of preferred shares outstanding on June 9, 2009. Since June 11, 2009, 39,500 Preferred Shares Series 1 and 328,632 Preferred Shares series 2 were repurchased at average prices of $22.71 and $17.87, respectively. The total cost of repurchasing preferred shares in the second and third quarters of 2009 amounted to $6.8 million, including brokerage fees.
As of the second quarter, the amount repurchased – in the three weeks or so between NCIB approval and quarter end – the amount was derisory:
As at June 30, 2009, the Fund purchased for cancellation 8,800 Series 1 shares of the Fund for a total cash consideration of $0.2 million including brokerage fees at an average price of $22.47 per Series 1 share and 12,600 Series 2 shares of the Fund for a total cash consideration of $0.2 million including brokerage fees at an average price of $17.43 per Series 2 share.
YPG recorded a third quarter loss on goodwill writedown, but for a company like YPG – which is, basically, all goodwill – balance sheet values are of limited utility. It is operating cash flow that’s important; this was down, but not by more than one would expect in a vicious recession.
YPG.PR.A and YPG.PR.B were last mentioned on PrefBlog in connection with YPG’s issuance of 5-Year MTNs. YPG.PR.A and YPG.PR.B are both tracked by HIMIPref™ but are relegated to the Scraps subindex on credit concerns.
It is nice to see that Yellow Pages recognizes what a great deal YPG.PR.B is — yielding more than 10% to redemption/retraction in 8 years. Their PR.B shares purchased were about 8X as high as PR.A.
Presumably they are using the money from the recent Fixed Reset PR.C which was issued at 6.75% so are earning a nice 3.5% spread. However, with PR.C having fallen to $22-ish for a 7.7% yield, we may not see so many repurchases in the near future.
It’s not often you can extend term and pick up 350bp!
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