Issue Comments

FFN.PR.A : Meeting to Extend Term?

Financial 15 Split II Corp. has not had many of its preferred shares redeemed since issue:

Financial 15 Split II Preferreds Outstanding
Period Action Shares
2004-10-15 Issue 6,700,000
FY 2006 Redemption (49,900)
Current Outstanding   6,650,100

The shares are not redeemable by the company (the “Redemption” in the table above is actually Shareholder Retraction, but I’m following the language of the Annual Report): capital unitholders who wish to retract must tender a pref, or get the company to buy one in the market on their behalf.
The company has announced that:

they will hold a special meeting of the shareholders on April 24, 2007. Shareholders of each Fund are being asked to consider a special resolution to amend the articles of Fund to extend the mandatory redemption date for the Class A Shares and the Preferred Shares of each Corp. to December 1, 2014.

This will be a good deal if the 5.25% dividend isn’t decreased simultaneously! I’ll write more as details become available.

Issue Comments

FTN.PR.A : Meeting to extend term?

Financial 15 Split Corp. is in the happy position of having increased its preferred shares outstanding since issue:

Financial 15 Preferreds Outstanding
Period Action Shares
2003-11-14 Issue 10,600,000
FY 2004 Issue 300,000
FY 2006 Redemption (190,762)
Current Outstanding   10,709,238

The shares are not redeemable by the company (the “Redemption” in the table above is actually Shareholder Retraction, but I’m following the language of the Annual Report): capital unitholders who wish to retract must tender a pref, or get the company to buy one in the market on their behalf.

The company has announced that:

they will hold a special meeting of the shareholders on April 24, 2007. Shareholders of each Fund are being asked to consider a special resolution to amend the articles of Fund to extend the mandatory redemption date for the Class A Shares and the Preferred Shares of each Corp. to December 1, 2014.

This will be a good deal if the 5.25% dividend isn’t decreased simultaneously! I’ll write more as details become available.

Issue Comments

DFN.PR.A : Meeting to Extend Term?

Dividend 15 Split Corp. is a fairly unusual split-share corporation, in that they have been able to increase the number of shares outstanding since they were first traded 2004-3-16:

DFN.PR.A Shares Outstanding
Date Action Shares
2004-3-16 Issue @ $10.00 8,400,000
FY 2006 Issue @ $10.75 1,215,000
FY 2006 Redemption (211,500)
Current Outstanding   9,403,500

This issue has redemption terms I like: there ain’t none. Just the maturity 2009-12-1. Capital unitholders who wish to retract have to go out and buy a matching pref (or have the company do so on their behalf). 

The company has now announced that

it will hold a special meeting of the shareholders on April 24, 2007. Shareholders of each Fund are being asked to consider a special resolution to amend the articles of Fund to extend the mandatory redemption date for the Class A Shares and the Preferred Shares to December 1, 2014.

No word on whether there will be a simultaneous decrease in the dividends payable – but if there isn’t, then the annual dividend of $0.525 (5.25% of par) makes this seem like a good deal!

I’ll write more when the details of the resolutions are release on SEDAR.

Issue Comments

Dundee Wealth Management Preferred Settles

The new issue from Dundee Wealth Management, announced February 22, settled with a sigh today, closing at 24.80-90 on volume of 125,850 shares. It opened at 24.75 and managed to recover to 24.95 before finding its level. Scotia provided an afternoon flourish by crossing 50,000 shares at 24.90.

The issue has been entered into the HIMIPref™ database with a securityCode of A45150, replacing the preIssue code of P25007. A reorgDataEntry has been processed.

More later.

Later, more: I have updated the table of comparatives:

Dundee Wealth New Issue & Comparitives
Data DW.PR.A BAM.PR.J DC.PR.A
Price due to base-rate 24.65 26.23 25.19
Price due to short-term -0.47 -0.49 -0.45
Price due to long-term 1.71 1.77 1.64
Price to to Cumulative Dividends 0.00 0.00 0.00
Price due to SplitShareCorp 0.00 0.00 0.00
Price due to Retractibility 1.09 1.20 0.99
Price due to Liquidity 0.80 -0.17 0.00
Price due to Floating Rate 0.00 0.00 0.00
Price due to Credit Spread (2) 0.00 -0.32 0.00
Price due to Credit Spread (3) -0.90 0.00 -0.82
Price due to Credit Spread (High) 0.00 0.00 0.00
Price due to Credit Spread (Low) 0.00 -0.27 -0.22
Price due to error 0.01 0.04 0.07
Curve Price (Taxable Curve) 26.89 28.00 26.40
Quote 3/13 24.80-90 27.82-97 25.35-50
YTW (after tax) 3.88% 3.20% 3.96%
YTW Date 2017-3-12 2014-4-30 2016-6-29
Credit Rating (DBRS) Pfd-3 Pfd-2(low) Pfd-3(low)
YTW (Pre-Tax) 4.88% 4.04% 4.97%
YTW Modified Duration (Pre-Tax) 7.91 6.01 7.33
YTW Pseudo-Convexity (Pre-Tax) 0.2 -3.3 0.2

Market Action

March 12, 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 4.01% 3.82% 83,868 3.88 1 0.3185% 1,050.7
Fixed-Floater 4.97% 3.45% 109,132 4.59 5 +0.0160% 1,041.6
Floater 4.70% -17.30% 74,613 11.03 3 +0.0916% 1,051.0
Op. Retract 4.70% 2.59% 76,216 2.14 17 +0.0623% 1,033.8
Split-Share 5.07% 0.44% 189,839 3.22 15 -0.0188% 1,044.1
Interest Bearing 6.47% 3.25% 67,295 2.33 5 +0.1062% 1,043.0
Perpetual-Premium 5.00% 3.69% 245,160 5.20 53 -0.0206% 1,057.1
Perpetual-Discount 4.53% 4.53% 788,287 12.16 9 +0.1294% 1,068.0
Major Price Changes
Issue Index Change Notes
SXT.PR.A SplitShare +1.1067% Makes at least some sense, since today is the first day of trading in post-redemption shares. I wonder if the sellers knew that?
Volume Highlights
Issue Index Volume Notes
SLF.PR.E PerpetualDiscount 220,785 RBC crossed 214,500 at 25.00. Did both sides pay a nickel a share? Nice work, if so! Now with a pre-tax bid-YTW of 4.49% based on a bid of $25.00 and a call 2016-4-30 at $25.00.
POW.PR.D PerpetualPremium 70,000 Scotia crossed 65,000 at $26.45. Now with a pre-tax bid-YTW of 4.27% based on a bid of $26.43 and a call 2014-11-30 at $25.00.
LBS.PR.A SplitShare 152,322 Scotia crossed 27,700 at $10.60 and 85,000 at 10.70. Now with a pre-tax bid-YTW of 4.31% based on a bid of $10.64 and a hardMaturity 2013-11-29 at $10.00
SLF.PR.A PerpetualPremium 54,050 Scotia crossed 50,000 at $25.74. Now with a pre-tax bid-YTW of 4.27% based on a bid of $25.71 and a call 2014-4-30 at $25.00.
BAM.PR.B Floater 47,165 Desjardins crossed 40,000 at $25.05.

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

PrefLetter

PrefLetter, March 2007

The March issue of PrefLetter has just been sent to those who have previously indicated that they would like to see a copy.

I am still on schedule for an official launch in April, but it might be tight! Not everything is under my control and there’s a lot of waiting around to do when starting a new venture.

If any other readers would like to see a free copy of the March prototype, please eMail me. Comments will be greatly appreciated, but are not compulsory.

Market Action

March 9, 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 4.02% 3.89% 87,318 3.88 1 0.0000% 1,047.4
Fixed-Floater 4.97% 3.48% 108,894 4.60 5 +0.0951% 1,041.4
Floater 4.71% -17.32% 71,942 11.02 3 +0.0264% 1,050.1
Op. Retract 4.70% 2.65% 77,098 2.15 17 -0.0983% 1,033.1
Split-Share 5.07% 1.31% 191,061 3.23 15 -0.0182% 1,044.3
Interest Bearing 6.47% 3.96% 67,036 2.33 5 +0.1659% 1,041.9
Perpetual-Premium 5.00% 3.56% 247,963 5.39 53 +0.0117% 1,057.3
Perpetual-Discount 4.53% 4.53% 792,348 13.15 9 -0.0040% 1,066.7
Major Price Changes
Issue Index Change Notes
TD.PR.M OpRet -1.5659% On volume of 700 shares – which was enough to knock the quote down to 27.03-59, 55×4. Now with a pre-tax bid-YTW of 2.90% based on the bid and a call 2009-5-30 at $26.00. If it survives until its softMaturity 2013-10-30 at $25.00, it will have yielded 3.42%
BAM.PR.I OpRet +1.3011% An issue with similar terms to the TD.PR.M – the main difference is the credit. It pays $1.375 p.a., as opposed $1.175 for TD.PR.M. It did not trade today, despite the efforts of the bidders to attract attention. Now with a pre-tax bid-YTW of 3.25% based on a bid of $27.25 and a call 2009-7-30 at $25.75 … it if makes it to its softMaturity 2013-12-30, the yield will have been 4.17%
Volume Highlights
Issue Index Volume Notes
PWF.PR.K PerpetualPremium 142,950 RBC crossed 139,000 at 26.20. Now with a pre-tax bid-YTW of 4.34% based on a bid of $26.16 and a call 2014-11-30 at 4.34%.
BAM.PR.M PerpetualPremium 116,200 Desjardins crossed 108,400 at $25.20. Now with a pre-tax bid-YTW of 4.77% based on a bid of $25.25 and a call 2016-03-01 at $25.00.
BCE.PR.S Scraps (would be “ratchet” with more volume) 102,500 Nesbitt crossed 100,000 at $25.20.
WN.PR.E PerpetualDiscount 62,359 Still on credit watch negative. Now with a pre-tax bid-YTW of 4.81% based on a bid of 25.08 and a limitMaturity
TD.PR.N OpRet 50,000 Nesbitt crossed 50,000 at 27.40. Now with a pre-tax bid-YTW of 2.37% based on a bid of $27.28 and a call 2009-5-30 at $26.00. Big Deal. Even if it survives until its softMaturity 2014-1-30, its yield will have been only 3.21% … basically a corporate bond, in fact, after taking account of the Ontario Equivalency Factor of 1.40.

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

Market Action

March 8, 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 4.01% 3.88% 90,918 3.89 1 0.0000% 1,047.4
Fixed-Floater 4.98% 3.60% 110,307 4.61 5 -0.2041% 1,040.4
Floater 4.71% -16.84% 73,207 11.03 3 +0.1310% 1,049.8
Op. Retract 4.69% 2.37% 77,791 2.11 17 +0.0822% 1,034.1
Split-Share 5.07% 1.13% 192,781 3.23 15 +0.0956% 1,044.5
Interest Bearing 6.48% 3.55% 65,505 2.33 5 +0.1826% 1,040.2
Perpetual-Premium 5.00% 3.67% 250,940 5.18 53 +0.0132% 1,057.2
Perpetual-Discount 4.53% 4.53% 810,417 13.16 9 +0.0358% 1,066.7
Major Price Changes
Issue Index Change Notes
There were no issues with notable performance today.
Volume Highlights
Issue Index Volume Notes
YPG.PR.A Scraps 181,300 Recent new issue. Now with a pre-tax bid-YTW of 4.51% based on a bid of $24.71 and a softMaturity 2012-12-30.
SLF.PR.E PerpetualDiscount 116,800 RBC crossed 100,000 at 24.95. Now with a pre-tax bid-YTW of 4.50% based on a bid of $24.95 and a limitMaturity.
TD.PR.O PerpetualPremium 111,100 TD crossed 100,000 at $26.40. Now with a pre-tax bid-YTW of 4.13% based on a bid of $26.34 and a call 2014-11-30 at 25.00
DIV.PR.A SplitShare 79,800 Dundee crossed 75,200 at $25.40. This issue will be redeemed March 20 for a total of $25.51071.
BCE.PR.Z FixedFloater 72,169 Nesbitt crossed 70,000 at $25.50.

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

Market Action

March 7, 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 4.01% 3.88% 94,665 3.89 1 +0.0398% 1,047.4
Fixed-Floater 4.96% 3.47% 108,528 4.62 5 +0.0394% 1,042.5
Floater 4.71% -16.38% 73,769 11.02 3 +0.0787% 1,048.4
Op. Retract 4.70% 2.31% 76,165 2.11 17 +0.1976% 1,033.3
Split-Share 5.07% 1.29% 196,780 3.24 15 -0.0002% 1,043.5
Interest Bearing 6.49% 3.46% 64,876 2.33 5 +0.0789% 1,038.3
Perpetual-Premium 5.00% 3.52% 254,148 5.34 53 +0.0674% 1,057.0
Perpetual-Discount 4.53% 4.54% 821,217 13.16 9 +0.0091% 1,066.3
Major Price Changes
Issue Index Change Notes
BAM.PR.I OpRet +1.2898% On volume of 454 shares, so perhaps not the most significant move ever recorded! But even after today’s move, it has a pre-tax bid-YTW of 4.17% based on a bid of $26.70 and a call 2009-7-30 at 25.75, which ain’t bad! It’s certainly the best in the Operating Retractible index!
Volume Highlights
Issue Index Volume Notes
BCE.PR.H RatchetRate 703,000 Wow! Nesbitt crossed 350,000, then Scotia crossed 150,000, and Nesbitt closed the trading with a cross of 200,000 – all crosses done at 25.12.
BCE.PR.A FixedFloater 417,780 Nesbitt crossed 417,300 at 25.30. Then another 80 as an odd-lot trade.
RY.PR.B PerpetualPremium 203,050 Nesbitt crossed 200,000 at 25.65. Now with a pre-tax bid-YTW of 4.38% based on a bid of $25.65 and a call 2015-9-23 at $25.00
BAM.PR.H OpRet 163,586 Nesbitt crossed 162,600 at 27.40. Now with a pre-tax bid-YTW of 2.27% based on a bid of $27.39 and a call 2008-10-30 at 25.75. It pays $1.4375, which is a whole big pile of money for a retractible, so I’m a little dubious about its chances of making it to the softMaturity 2012-3-30 at $25.00. Compare these yields with the BAM.PR.I … SAME issuer SAME index … and see why sometimes I despair of this market. Sure, the H is more liquid than the I – about three times more liquid, according to the averageTradingValue. But is there absolutely nobody out there holding H and prepared to chip away at the differential piecewise?
YPG.PR.A Scraps 157,010 Recent new issue. Now with a pre-tax bid-YTW of 4.47% based on a bid of $24.75 and a softMaturity 2012-12-30.
SLF.PR.E PerpetualDiscount 122,660 Recent new issue. Now with a pre-tax bid-YTW of 4.51% based on a bid of $24.91 and a limitMaturity.
PWF.PR.K PerpetualPremium 113,912 RBC crossed 50,000 at 26.25, the TD crossed the same number at the same price. Now with a pre-tax bid-YTW of 4.31% based on a bid of $26.20 and a call 2014-11-30 at $25.00.
CM.PR.J PerpetualPremium 111,330 Recent new issue. Now with a pre-tax bid-YTW of 4.53% based on a bid of $24.96 and a limitMaturity.
BCE.PR.S Scraps (would be Ratchet Rate, but there are liquidity concerns) 100,000 Nesbitt crossed 100,000 at $25.20

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