Pop quiz! What do the securities and airline industries have in common?:
If these customers can’t use laptops or wi-fi and have to waste half their day going through security, they may abandon airlines at a faster rate than they are already, turning instead to modern business tools such as the web and teleconferencing, Kokonis said. Over the past year, he added, international premium flights were down 30 to 35 per cent.
What makes this even worse, [Robert] Mann [president of R.W. Mann & Company Inc., a consultancy in Port Washington, N.Y.] said, is that most in the industry realize new security measures are essentially political moves aimed at assuaging the public.
“It’s security theatre,” Mann said, noting that “there are a lot of us in the business that roll our eyes when these things happen.”
CIBC has issued covered bonds:
Series CB3 (CHF 375 million) covered bonds have a coupon rate of 1.75% and a maturity date of January 30, 2015. Series CB4 (CHF 300 million) covered bonds have a coupon rate of three-month CHF LIBOR plus 0.1% and a maturity date of December 30, 2011.
Swiss Government 5-years (there must be a cool name for them!) are now yielding 0.16%. Three month CHF LIBOR is 0.25%.
The last Canadian 5-Year NHA MBS auction was on October 16 with an average yield of 3.268%, as part of the Insured Mortgage Purchase Plan. Five year Canadas averaged 2.71% in October.
Preferred shares got on the up escalator today, although volume remained seasonably light. PerpetualDiscounts were up 31bp, while FixedResets gained 22bp, taking yields down to … 3.59%!
PerpetualDiscounts now yield 5.86%, equivalent to 8.20% interest at the standard equivalency factor of 1.4x. Long Corporates are now a hair over 6.0%, with a total return of -1.63% on the month-to-date, so the pre-tax interest-equivalent spread is now about 220bp, slightly tighter than the 225bp reported on December 16, but still wider than “Credit Crunch Normal” of 200bp and far above the long-term range of 100-150bp.
| HIMIPref™ Preferred Indices These values reflect the December 2008 revision of the HIMIPref™ Indices Values are provisional and are finalized monthly |
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| 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 | 0.5149 % | 1,620.7 |
| FixedFloater | 5.67 % | 3.82 % | 37,670 | 19.00 | 1 | 0.5238 % | 2,749.3 |
| Floater | 2.42 % | 2.83 % | 107,699 | 20.15 | 3 | 0.5149 % | 2,024.7 |
| OpRet | 4.84 % | -1.69 % | 120,224 | 0.10 | 15 | 0.4590 % | 2,332.8 |
| SplitShare | 6.44 % | -6.24 % | 195,292 | 0.08 | 2 | 0.0222 % | 2,085.6 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.4590 % | 2,133.1 |
| Perpetual-Premium | 5.85 % | 5.69 % | 73,882 | 2.30 | 7 | -0.0113 % | 1,886.1 |
| Perpetual-Discount | 5.80 % | 5.86 % | 192,709 | 14.12 | 68 | 0.3133 % | 1,799.9 |
| FixedReset | 5.39 % | 3.59 % | 324,259 | 3.84 | 41 | 0.2250 % | 2,174.7 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| CIU.PR.A | Perpetual-Discount | -1.25 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2039-12-30 Maturity Price : 19.71 Evaluated at bid price : 19.71 Bid-YTW : 5.91 % |
| MFC.PR.A | OpRet | 1.02 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2010-07-19 Maturity Price : 26.25 Evaluated at bid price : 26.72 Bid-YTW : 0.87 % |
| POW.PR.D | Perpetual-Discount | 1.12 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2039-12-30 Maturity Price : 20.78 Evaluated at bid price : 20.78 Bid-YTW : 6.04 % |
| TD.PR.Q | Perpetual-Discount | 1.13 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2039-12-30 Maturity Price : 24.87 Evaluated at bid price : 25.10 Bid-YTW : 5.67 % |
| TRI.PR.B | Floater | 1.14 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2039-12-30 Maturity Price : 21.25 Evaluated at bid price : 21.25 Bid-YTW : 1.85 % |
| SLF.PR.A | Perpetual-Discount | 1.19 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2039-12-30 Maturity Price : 20.35 Evaluated at bid price : 20.35 Bid-YTW : 5.88 % |
| ELF.PR.G | Perpetual-Discount | 1.42 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2039-12-30 Maturity Price : 18.06 Evaluated at bid price : 18.06 Bid-YTW : 6.61 % |
| NA.PR.N | FixedReset | 1.51 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2013-09-14 Maturity Price : 25.00 Evaluated at bid price : 26.94 Bid-YTW : 3.31 % |
| CIU.PR.B | FixedReset | 2.00 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2014-07-01 Maturity Price : 25.00 Evaluated at bid price : 28.62 Bid-YTW : 3.40 % |
| BAM.PR.H | OpRet | 2.06 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2010-01-29 Maturity Price : 25.50 Evaluated at bid price : 26.30 Bid-YTW : -29.72 % |
| BAM.PR.J | OpRet | 2.19 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2014-04-30 Maturity Price : 26.00 Evaluated at bid price : 27.03 Bid-YTW : 4.21 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| CM.PR.K | FixedReset | 65,650 | Nesbitt crossed 60,800 at 26.65. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-08-30 Maturity Price : 25.00 Evaluated at bid price : 26.60 Bid-YTW : 3.74 % |
| BMO.PR.M | FixedReset | 40,400 | Nesbitt crossed 10,700 at 26.85, then another 28,500 at the same price. YTW SCENARIO Maturity Type : Call Maturity Date : 2013-09-24 Maturity Price : 25.00 Evaluated at bid price : 26.80 Bid-YTW : 3.06 % |
| IGM.PR.B | Perpetual-Discount | 32,915 | Recent Inventory Blow-out. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2039-12-30 Maturity Price : 24.13 Evaluated at bid price : 24.33 Bid-YTW : 6.12 % |
| BNS.PR.T | FixedReset | 32,400 | CIBC bought 18,500 from National at 28.15. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-05-25 Maturity Price : 25.00 Evaluated at bid price : 28.14 Bid-YTW : 3.47 % |
| CM.PR.H | Perpetual-Discount | 28,096 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2039-12-30 Maturity Price : 20.60 Evaluated at bid price : 20.60 Bid-YTW : 5.83 % |
| MFC.PR.D | FixedReset | 27,667 | YTW SCENARIO Maturity Type : Call Maturity Date : 2014-07-19 Maturity Price : 25.00 Evaluated at bid price : 28.15 Bid-YTW : 3.68 % |
| There were 21 other index-included issues trading in excess of 10,000 shares. | |||