PrefLetter

PrefLetter : Subscription Restrictions

I have just had the disclaimer of PrefLetter (Coming Soon!) prepared. Everybody will be familiar with these things – I needed to ensure that the work was clearly labelled as generic and that there were prohibitions against redistribution or other abuse.

Very disappointing. Not only did counsel cross out EVERY SINGLE MENTION of “thumbscrews” in the prohibition, but I am advised that “evisceration” is no longer considered a legal remedy. Hell.

And I’ve learnt about the subscription restrictions. As I am licensed in Ontario, I am able to sell subscriptions to any Ontario resident; there are also exemptions in place such that I can sell subscriptions to Quebec residents who are registered in Quebec. But nobody else, not unless I get registered in other provinces. I will, however, maintain a list of the business I’m losing due to these restrictions and will apply for registration anywhere I think I can at least break even.

The various levels of restriction seem a little strange to me:

  • I can accept investments in Malachite Aggressive Preferred Fund across Canada, provided the investor either meets the accreditation rules, or invests $150,000+.
  • I can offer segregated account management to Ontario residents only.
  • I can licence my software to anybody in Ontario, or to locally registered entities anywhere else in Canada.
  • I can sell subscriptions to PrefLetter to anybody in Ontario and registered entities in Quebec (there are a few other exemptions in Quebec, but listing them takes up a LOT of space).

I find it most peculiar, really. Especially the part about being able to offer a registered financial advisor in, say, Saskatchewan, a license for my software but not a subscription to my newsletter.

Market Action

March 21, 2007

First day of spring and in celebration I went out with an industry buddy for a very good dinner.

I then returned to the grindstone to find that I had some kind of strange internet connectivity problem … I’ve worked around it (different ISP, different geographical location) and HIMIPref™ has been updated with today’s closing quotes & volumes and a few dividend records … but I’ve run out of time!

I will review the day on the 22nd.

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 4.09% 3.94% 74,695 3.84 1 0.0000% 1,051.1
Fixed-Floater 4.96% 3.64% 99,900 4.64 5 -0.1729% 1,042.6
Floater 4.72% -18.92% 76,868 0.32 3 +0.0262% 1,054.2
Op. Retract 4.70% 2.75% 76,919 2.11 17 +0.0333% 1,035.0
Split-Share 5.00% 3.50% 177,651 3.36 14 -0.1166% 1,051.9
Interest Bearing 6.51% 4.99% 65,453 2.31 5 -0.0706% 1,040.7
Perpetual-Premium 5.01% 3.74% 233,255 5.22 53 +0.0078% 1,059.0
Perpetual-Discount 4.52% 4.53% 879,379 14.48 10 -0.1637% 1,067.3
Major Price Changes
Issue Index Change Notes
BNA.PR.A SplitShare -1.9011% On relatively heavy volume of 12,238 shares (volume-average is 1,538) to close at 25.80-25, pre-tax bid-YTW of 4.55% based on a call 2007-10-31 at $25.50
FFN.PR.A SplitShare +1.0368% Now with a pre-tax bid-YTW of 2.55% based on a bid of $10.72 and a hardMaturity 2009-12-1 at $10.00. It would seem the market is expecting the upcoming meeting to extend term.
Volume Highlights
Issue Index Volume Notes
FAL.PR.H Scraps (Would be perpetualPremium, but there are yield concerns) 402,000 Now with a pre-tax bid-YTW of 3.02% based on a bid of $25.90 and a call 2008-4-30 at $25.00
RY.PR.A PerpetualDiscount 206,500 With a pre-tax bid-YTW of 4.48% based on a bid of $25.00 and a limitMaturity.
RY.PR.F PerpetualDiscount 120,775 Pre-tax bid-YTW of 4.51% based on a bid of $24.75 and a limitMaturity.
NTL.PR.F Scraps (Would be ratchet rate, but there are extreme credit concerns) 107,295  
BAM.PR.M PerpetualPremium 105,300 With a pre-tax bid-YTW of 4.72% based on a bid of $25.08 and a call 2016-3-1 at $25.00
PWF.PR.K PerpetualPremium 104,920 Pre-tax bid-YTW of 4.31% based on a bid of $26.25 and a call 2014-11-30 at $25.00.

There were twenty-six other “$25 p.v. equivalent” index-included issues with over 10,000 shares traded today.

Better Communication, Please!

W.PR.H / W.PR.J Dividends

There is no information on the website and there has been no press release.

An inquiry has been sent via http://www.duke-energy.com/investors/contact/addresses.asp.

Dates are:

Ex-Date : 3/28

Record Date: 3/30

PayDate : 4/15

Update, 2007-03-27 : Actually, this is kind of funny. Duke Energy at first denied any knowledge of any preferred shares whatsoever. When advised that the TSX listed their website as being the official source for information on these two issues, they said :

These issues are paid by Westcoast Energy Inc, through Spectra Energy.  The information would be provided by Spectra Energy.  I know that there is a press release available on their website, if you search their website for “dividends.”  The press release was issued on March 5 or March 6, but it will only provide the recently declared dividends.  You will need to contact Spectra Energy directly for this information.

Spectra? Who the hell is Spectra?

Anyway, I did find the relevant press release There is no indication that is was distributed via any industry-standard conduits, such as CCN Matthews or Canada Newswire

Better Communication, Please!

TCA.PR.X / TCA.PR.Y Dividends

These are not listed on the website and there is no press release.

An inquiry has been sent to webmaster-e@transcanada.com.

The information is:

Ex-Date : 3/28

Record Date : 3/30

Pay Date : 4/30 (TCA.PR.X) and 5/1 (TCA.PR.Y)

 Update, 2007-3-22 Investor Relations has responded with a link to the press release, which I presume is not picked up by the “News” link on the TSX quotes for the prefs since the press release was coded only for the common, TRP.

I have replied to IR asking if they will report the dividend information in the Investor Centre, similarly to the common share dividends.

New Issues

New Issue : Scotiabank 4.5% Perpetuals

Scotiabank has announced (via CCN Matthews)

a domestic public offering of 12 million, 4.50% non-cumulative preferred shares Series 15 (the “Preferred Shares Series 15”) at a price of $25.00 per share, for an aggregate amount of $300 million.

The Bank has agreed to sell the Preferred Shares Series 15 to a syndicate of underwriters led by Scotia Capital Inc. on a bought deal basis. The Bank has granted to the underwriters an over-allotment option to purchase up to an additional $45 million of the Preferred Shares Series 15. This over-allotment option is exercisable at any time up to 30 days after closing.

Closing is expected to occur on or after April 5, 2007.

I have no details on the call schedule as yet, but will post more, later, when I do.

I’m pleased to see this! Scotiabank has lots of Tier 1 Capital room for new issuance!

Update & Bump 3/21 : The redemption schedule is

BNS Ser 15 Embedded Options
Option From To Price
Redemption 2012-07-27 2013-07-26 26.000000
Redemption 2013-07-27 2014-07-26 25.750000
Redemption 2014-07-27 2015-07-26 25.500000
Redemption 2015-07-27 2016-07-26 25.250000
Redemption 2016-07-27 INFINITE DATE 25.000000

and some comparatives are:

Scotia Bank 4.45% Perp New Issue & Comparatives
Data BNS.PR.? BNS.PR.L RY.PR.E
Price due to base-rate  22.80  22.93  22.92
Price due to short-term  -0.32  -0.32  -0.32
Price due to long-term  1.28  1.28  1.28
Price to to Cumulative Dividends  0.00  0.00  0.00
Price due to Liquidity  1.67  1.67  1.68
Price due to error  -0.05  -0.05  -0.05
Curve Price (Taxable Curve)  25.38  25.51  25.50
Dividend Rate $1.125 $1.125 $1.125
Quote 3/20 25.00 Issue  25.10-19  25.20-24
YTW (after tax)  3.58%  3.60%  3.58%
YTW Date  2016-8-26 / Infinite  Infinite  2016-3-25 / Infinite
Credit Rating (DBRS) Pfd-1 Pfd-1 Pfd-1
YTW (Pre-Tax)  4.50% 4.53%  4.51% 
YTW Modified Duration (Pre-Tax)  7.67  16.29  7.33
YTW Pseudo-Convexity (Pre-Tax)  -61.97  -52.65  -61.67
Market Action

March 20, 2007

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 4.09% 3.92% 77,563 3.85 1 -0.3557% 1,051.1
Fixed-Floater 4.96% 3.47% 98,961 4.64 5 +0.0395% 1,044.4
Floater 4.72% -18.72% 78,534 0.32 3 +0.0394% 1,053.9
Op. Retract 4.71% 2.66% 75,429 2.12 17 -0.0210% 1,034.6
Split-Share 4.99% 2.04% 180,075 3.33 14 +0.1509% 1,053.1
Interest Bearing 6.50% 4.70% 66,284 2.32 5 -0.0077% 1,041.5
Perpetual-Premium 5.00% 3.82% 234,024 5.15 53 +0.0229% 1,058.9
Perpetual-Discount 4.52% 4.52% 891,025 11.62 10 +0.0164% 1,069.1
Major Price Changes
Issue Index Change Notes
GWO.PR.E OpRet -1.0409% Still on credit watch by DBRS as the market awaits information regarding their financing of the Putnam purchase. This issue has an issuer bid outstanding, although no shares were purchased under last year’s plan. Now with a pre-tax bid-YTW of 2.41% based on a bid of 26.62 and a call 2009-4-30 at $25.50 … if the company waits until the first possible par-value call, 2011-4-30, it will have yielded 3.00%; and if the issue lasts until its softMaturity 2014-3-30, it will have yielded 3.64%. Take your pick!
Volume Highlights
Issue Index Volume Notes
CM.PR.D PerpetualPremium 507,468 The last two trades of note were a Desjardins cross of 50,000 at 27.07 and a TD cross of 50,000 at 27.08. Now with a pre-tax bid-YTW of 2.90% based on a bid of $27.01 and a call 2008-5-30 at $26.00. Sounds pricy to me!
BNS.PR.K PerpetualPremium 263,800 The closing trade was RBC’s cross of 100,000 at $26.18. Now with a pre-tax bid-YTW of 4.12% based on a bid of $26.25 and a call 2014-5-28 at $25.00. Note that Scotiabank has announced a new issue.
CM.PR.H PerpetualPremium 203,250 RBC crossed 100,000 at $26.18, then National Bank crossed 90,000 at $26.15. Now with a pre-tax bid-YTW of 4.18% based on a bid of $26.15 and a call 2014-4-29 at $25.00.
PWF.PR.J OpRet 156,649 Desjardins crossed 150,000 at $27.00. Now with a pre-tax bid-YTW of 2.10% based on a bid of 26.90 and a call 2008-5-30 at $26.00. I discussed earlier the chances of it getting redeemed before its time. And I haven’t changed my mind since then!
SLF.PR.E PerpetualDiscount 115,418 Now with a pre-tax bid-YTW of 4.52% based on a bid of $24.91 and a limitMaturity.
BAM.PR.B FloatingRate 102,050 Nesbitt crossed 100,000 at 24.90.

There were thirteen other “$25 p.v. equivalent” index-included issues with over 10,000 shares traded today.

HIMI Preferred Indices

HIMIPref™ Indices : July, 1998

All indices were assigned a value of 1000.0 as of December 31, 1993.

HIMI Index Values 1998-07-31
Index Closing Value (Total Return) Issues Mean Credit Quality Median YTW Median DTW Median Daily Trading Mean Current Yield
Ratchet 1,637.1 0 0 0 0 0 0
FixedFloater 1,584.1 9 2.00 4.59% 3.9 271M 5.05%
Floater 1,541.6 5 1.80 4.61% 0.7 115M 5.08%
OpRet 1,353.8 33 1.24 4.16% 3.8 70M 6.15%
SplitShare 1,389.8 5 1.59 5.49% 7.1 352M 5.43%
Interest-Bearing 1,353.8 0 0 0 0 0 0
Perpetual-Premium 1,272.9 6 1.00 5.07% 10.0 207M 6.28%
Perpetual-Discount 1,251.6 0 0 0 0 0 0

Index Constitution, 1998-07-31, Pre-rebalancing

Index Constitution, 1998-07-31, Post-rebalancing

Market Action

March 19, 2007

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 4.06% 3.81% 80,757 3.85 1 +0.3968% 1,054.9
Fixed-Floater 4.96% 3.49% 101,384 4.63 5 -0.0392% 1,044.0
Floater 4.72% -18.68% 75,096 0.32 3 +0.1318% 1,053.5
Op. Retract 4.70% 2.72% 75,282 2.13 17 +0.0886% 1,034.9
Split-Share 5.04% 1.51% 175,057 3.11 15 +0.1651% 1,051.5
Interest Bearing 6.50% 4.41% 66,126 2.32 5 -0.2035% 1,041.6
Perpetual-Premium 5.00% 3.81% 235,750 5.15 53 +0.0183% 1,058.7
Perpetual-Discount 4.52% 4.52% 900,035 12.58 10 +0.0485% 1,068.9
Major Price Changes
Issue Index Change Notes
There were no index-included issues with notable price moves today.
Volume Highlights
Issue Index Volume Notes
DC.PR.A Scraps (Would be OpRet, but there are credit-rating concerns) 192,948 Another day of heavy trading. Now with a pre-tax bid-YTW of 4.96% based on a bid of $25.09 and a softMaturity 2016-6-29 at $25.00.
YPG.PR.A Scraps (Would be OpRet, but there are credit-rating concerns) 148,770 National Bank crossed 135,000 at $24.60. Now with a pre-tax bid-YTW of 4.62% based on a bid of $24.60 and a softMaturity 2012-12-30 at $25.00.
BMO.PR.J PerpetualPremium 118,240 Now with a pre-tax bid-YTW of 4.52% based on a bid of $25.19 and either a call 2016-3-26 at $25.00, or a limitMaturity, take your pick.
BAM.PR.M PerpetualPremium 108,150 Now with a pre-tax bid-YTW of 4.71% based on a bid of $25.08 and a call 2016-3-1 at $25.00.
RY.PR.B PerpetualPremium 103,795 RBC crossed 100,000 at $25.70. Now with a pre-tax bid-YTW of 4.43% based on a bid of $25.60 and a call 2015-9-23 at $25.00.
RY.PR.D PerpetualPremium 97,000 RBC crossed 40,000 at $25.25, then Nesbitt crossed 50,000 at the same price. Now with a pre-tax bid-YTW of 4.55% based on a bid of $25.20 and a limitMaturity.
HSB.PR.D PerpetualPremium 28,060 Now with a pre-tax bid-YTW of 4.21% based on a bid of $26.30 and a call 2015-1-30 at $25.00

There were nine other “$25 p.v. equivalent” index-included issues with over 10,000 shares traded today.

HIMI Preferred Indices

HIMIPref™ Preferred Indices : June, 1998

All indices were assigned a value of 1000.0 as of December 31, 1993.

HIMI Index Values 1998-06-30
Index Closing Value (Total Return) Issues Mean Credit Quality Median YTW Median DTW Median Daily Trading Mean Current Yield
Ratchet 1,627.3 0 0 0 0 0 0
FixedFloater 1,575.1 9 2.00 4.59% 4.0 231M 5.06%
Floater 1,532.3 5 1.80 4.22% 0.1 161M 5.07%
OpRet 1,348.5 33 1.24 4.08% 3.9 85M 6.13%
SplitShare 1,378.5 5 1.60 5.23% 7.1 624M 5.43%
Interest-Bearing 1,348.5 0 0 0 0 0 0
Perpetual-Premium 1,261.5 5 1.00 5.09% 10.0 291M 6.49%
Perpetual-Discount 1,240.4 0 0 0 0 0 0

Index Constitution, 1998-06-30, Pre-rebalancing

Index Constitution, 1998-06-30, Post-rebalancing

Market Action

March 16, 2007

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 4.06% 3.88% 84,073 3.86 1 -0.4739% 1,050.7
Fixed-Floater 4.96% 3.38% 103,414 4.63 5 +0.2054% 1,044.4
Floater 4.73% -18.62% 76,561 5.58 3 -0.0391% 1,052.1
Op. Retract 4.71% 2.81% 76,341 2.16 17 -0.0263% 1,034.0
Split-Share 5.05% 2.40% 178,970 3.17 15 +0.1227% 1,049.8
Interest Bearing 6.49% 3.84% 66,043 2.33 5 +0.0397% 1,043.7
Perpetual-Premium 5.00% 3.83% 235,206 5.34 53 +0.0535% 1,058.5
Perpetual-Discount 4.52% 4.51% 920,443 12.58 10 +0.0486% 1,068.4
Major Price Changes
Issue Index Change Notes
There were no index-included issues with notable price moves today.
Volume Highlights
Issue Index Volume Notes
DC.PR.A Scraps (Would be OpRet, but there are credit-rating concerns) 245,200 Dundee crossed 137,300 for cash at 25.00 (Record Date is Monday 19, with a $0.3125 dividend payable … hmmm … given that $25.00 was the low price on the day, and the trade should be at a price greater than normal by the amount of the dividend if it is settling cum-dividend, the meaning of this trade is not clear to me. There’s a story there somewhere!) Desjardins crossed 100,000 at $25.10 (REGULAR settlement, EX-dividend). Now with a pre-tax bid-YTW of 4.97% based on a bid of $25.05 and a softMaturity 2016-6-29 at $25.00.
TOC.PR.B Scraps (Would be Floater, but there are volume concerns) 162,850 Global crossed 80,900 for cash at $26.19, then another 80,900 at $25.93. Ex-Dividend 3/15, Record date 3/19. Dividend amount 0.264658. Yawn.
SLF.PR.E PerpetualDiscount 106,750 Nesbitt crossed 100,000 at $24.95. Now with a pre-tax bid-YTW of 4.51% based on a bid of $24.94 and a limitMaturity.
IGM.PR.A OpRet 103,023 Now with a pre-tax bid-YTW of 2.13% based on a bid of $27.98 and a call 2009-7-30 at $26.00. Yield will be 3.60% if it lasts until the softMaturity 2013-06-29, but that’s not something I’m going to bet on!
BCE.PR.H Ratchet 100,200 Scotia crossed 50,000 at $25.20. Nesbitt did the same thing, three minutes later.
TD.PR.O PerpetualPremium 50,655 Now with a pre-tax bid-YTW of 4.08% based on a bid of $26.45 and a call 2014-11-30 at $25.00.
RY.PR.F PerpetualDiscount 33,919 Recent new issue. Now with a pre-tax bid-YTW of 4.50% based on a bid of $24.78 and a limitMaturity

There were twelve other “$25 p.v. equivalent” index-included issues with over 10,000 shares traded today.