Bondholders will be glad this horrible week is over, as bonds slipped again after the US Employment Numbers (and wage numbers!) came out.
The Teachers/BCE agreement has been released on SEDAR. I didn’t find much of interest, but there was one tidbit: a “Superior Bid” only has to target 50.1% of the common shareholders, but has to be deemed (by BCE’s board) to be financially superior for the Affected Shareholders – and the latter group includes preferreds! Now there’s something that could possibly cause some ill-feeling in the future!
| Note that these indices are experimental; the absolute and relative daily values are expected to change in the final version. In this version, index values are based at 1,000.0 on 2006-6-30 | |||||||
| Index | Mean Current Yield (at bid) | Mean YTW | Mean Average Trading Value | Mean Mod Dur (YTW) | Issues | Day’s Perf. | Index Value |
| Ratchet | 5.37% | 5.38% | 28,542 | 14.87 | 2 | +0.6542% | 1,018.5 |
| Fixed-Floater | 5.06% | 5.35% | 139,658 | 15.02 | 8 | -0.4563% | 997.8 |
| Floater | 4.67% | 0.11% | 76,973 | 4.25 | 4 | -0.2370% | 1,048.0 |
| Op. Retract | 4.84% | 4.11% | 87,589 | 3.29 | 16 | -0.1310% | 1,019.1 |
| Split-Share | 5.06% | 4.69% | 125,697 | 4.09 | 17 | -0.0755% | 1,042.9 |
| Interest Bearing | 6.20% | 6.30% | 69,095 | 4.46 | 3 | +0.2047% | 1,039.2 |
| Perpetual-Premium | 5.54% | 4.79% | 121,526 | 5.81 | 26 | -0.1722% | 1,021.3 |
| Perpetual-Discount | 5.09% | 5.12% | 390,600 | 14.91 | 38 | -0.0978% | 968.0 |
| Major Price Changes | |||
| Issue | Index | Change | Notes |
| BCE.PR.C | FixFloat | -2.8571% | |
| ELF.PR.F | PerpetualDiscount | -2.0656% | Now with a pre-tax bid-YTW of 5.49% based on a bid of 24.18 and a limitMaturity. |
| MIC.PR.A | PerpetualPremium | -1.1324% | Now with a pre-tax bid-YTW of 5.85% based on a bid of 25.32 and a call 2012-1-30 at 25.00. |
| TOC.PR.B | Floater | -1.1072% | Still on Credit Watch Negative. |
| BNA.PR.C | SplitShare | -1.0504% | Now with a pre-tax bid-YTW of 5.09% based on a bid of 23.55 and a hardMaturity 2019-1-10 at 25.00. |
| BCE.PR.Z | FixFloat | -1.0417% | |
| BCE.PR.H | Ratchet | +1.2685% | |
| MFC.PR.C | PerpetualDiscount | +1.3187% | Now with a pre-tax bid-YTW of 4.91% based on a bid of 23.05 and a limitMaturity. |
| Volume Highlights | |||
| Issue | Index | Volume | Notes |
| BNS.PR.K | PerpetualDiscount | 43,560 | Now with a pre-tax bid-YTW of 4.97% based on a bid of 24.13 and a limitMaturity. |
| BNS.PR.M | PerpetualDiscount | 26,070 | Now with a pre-tax bid-YTW of 5.02% based on a bid of 22.42 and a limitMaturity. |
| BAM.PR.K | Floater | 25,353 | |
| TD.PR.O | PerpetualDiscount | 24,500 | Now with a pre-tax bid-YTW of 4.99% based on a bid of 24.30 and a limitMaturity. |
| NA.PR.L | PerpetualDiscount | 21,900 | Now with a pre-tax bid-YTW of 4.97% based on a bid of 24.70 and a limitMaturity. |
There were ten other $25-equivalent index-included issues trading over 10,000 shares today.
I suspect that including the preferred shareholders in the definition of “Affected Shareholders” is intended to dissuade a private equity bid, as they are looking to load on debt. My guess is that it would be less likely to dissuade Telus, as Telus is not looking to load on debt, split it up and sell it, but operate it as a going concern. Thus, Telus would know that one day it must, in any event, deal with the preferred shares. The definition of “Affected Shareholder” just makes that day today, rather than some day off in the future.
And Teacher’s knows that BCE will likely fend off Telus by denying adequate access to the data room on the grounds that the data is far too commercially sensitive to be giving it to a direct competitor.
[…] Bonds had a strong day, on the back of an apparent flight to quality related to sub-prime mortgages in the US and the strength has now spread to Japan amidst muttering that maybe Japan holds too many Treasuries. What a difference a week makes, eh? It was just last Friday I was reporting on the extreme lousiness of the bond market, but Captain Quality has saved the day! I guess a lot of mortgage cheques didn’t arrive in the mail on Monday morning. […]