Inflation news from the US was positive:
The Consumer Price Index climbed 3.4 percent in April, down from 3.5 percent in March, the Labor Department said Wednesday. The “core” index — which strips out volatile food and fuel prices in order to give a sense of the underlying trend — rose 3.6 percent last month, down from 3.8 percent a month earlier. It was the lowest annual increase in core inflation since early 2021.
…
Had the data come in hotter than anticipated yet again, it could have led policymakers to conclude that high rates needed more time to bring inflation to heel. Speaking at an event in Amsterdam on Tuesday, Jerome H. Powell, the Fed chair, reiterated that recent inflation readings had made him more cautious about cutting rates.“We did not expect this to be a smooth road, but these were higher than I think anybody expected,” he said. “What that has told us is that we will need to be patient and let restrictive policy do its work.”
…
Wednesday’s report showed improvement in some of the categories that had driven the recent uptick in inflation. Health insurance costs, which jumped in March, rose more slowly in April. Car insurance rates, too, rose more slowly, although still at an uncomfortably rapid clip.But prices in one key part of the economy remained stubborn: housing. For more than a year, forecasters have been predicting that the government’s measure of housing inflation would ease, citing private-sector data showing rent increases slowing.
Instead, housing costs in the Consumer Price Index have continued to rise more quickly than before the pandemic, a pattern that continued in April.
The Five-year Canada yield dropped to 3.67%.
PerpetualDiscounts now yield 6.49%, equivalent to 8.44% interest at the standard equivalency factor of 1.3x. Long corporates yielded 5.19% on 2024-5-10 and since then the closing price of ZLC has changed from 14.76 to 14.98, an increase of 149bp in price, implying a decrease of yields of 12bp (BMO reports a duration of 12.32, but don’t disclose whether this is Macaulay or Modified; I will assume Modified) to 5.07%. Therefore, the pre-tax interest-equivalent spread (in this context, the “Seniority Spread”) has narrowed slightly (and perhaps spuriously) to 335bp from the 340bp reported May 1.
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 | -2.3501 % | 2,301.2 |
FixedFloater | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -2.3501 % | 4,413.8 |
Floater | 10.46 % | 10.73 % | 61,222 | 8.92 | 1 | -2.3501 % | 2,543.7 |
OpRet | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.0103 % | 3,477.1 |
SplitShare | 4.84 % | 6.84 % | 32,611 | 1.38 | 8 | 0.0103 % | 4,152.4 |
Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.0103 % | 3,239.8 |
Perpetual-Premium | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.7619 % | 2,708.9 |
Perpetual-Discount | 6.33 % | 6.49 % | 54,542 | 13.18 | 27 | 0.7619 % | 2,953.9 |
FixedReset Disc | 5.21 % | 7.03 % | 125,068 | 11.94 | 57 | 0.0454 % | 2,584.8 |
Insurance Straight | 6.24 % | 6.40 % | 58,570 | 13.29 | 21 | 0.6010 % | 2,905.4 |
FloatingReset | 9.05 % | 9.19 % | 27,140 | 10.13 | 2 | 0.3755 % | 2,819.9 |
FixedReset Prem | 6.95 % | 6.41 % | 215,312 | 3.09 | 2 | -0.3148 % | 2,522.7 |
FixedReset Bank Non | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.0454 % | 2,642.2 |
FixedReset Ins Non | 5.05 % | 7.01 % | 85,619 | 12.63 | 14 | -0.6717 % | 2,811.8 |
Performance Highlights | |||
Issue | Index | Change | Notes |
MFC.PR.Q | FixedReset Ins Non | -3.78 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2054-05-15 Maturity Price : 22.28 Evaluated at bid price : 22.90 Bid-YTW : 6.93 % |
MFC.PR.J | FixedReset Ins Non | -2.81 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2054-05-15 Maturity Price : 22.63 Evaluated at bid price : 23.50 Bid-YTW : 6.86 % |
BN.PR.B | Floater | -2.35 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2054-05-15 Maturity Price : 12.05 Evaluated at bid price : 12.05 Bid-YTW : 10.73 % |
CCS.PR.C | Insurance Straight | -1.17 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2054-05-15 Maturity Price : 19.47 Evaluated at bid price : 19.47 Bid-YTW : 6.53 % |
BMO.PR.W | FixedReset Disc | -1.13 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2054-05-15 Maturity Price : 22.91 Evaluated at bid price : 23.65 Bid-YTW : 6.33 % |
SLF.PR.H | FixedReset Ins Non | -1.09 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2054-05-15 Maturity Price : 19.90 Evaluated at bid price : 19.90 Bid-YTW : 7.01 % |
PWF.PR.Z | Perpetual-Discount | 1.06 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2054-05-15 Maturity Price : 20.10 Evaluated at bid price : 20.10 Bid-YTW : 6.48 % |
BN.PR.Z | FixedReset Disc | 1.06 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2054-05-15 Maturity Price : 21.00 Evaluated at bid price : 21.00 Bid-YTW : 8.01 % |
IFC.PR.K | Insurance Straight | 1.06 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2054-05-15 Maturity Price : 20.97 Evaluated at bid price : 20.97 Bid-YTW : 6.37 % |
TD.PF.J | FixedReset Disc | 1.08 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2054-05-15 Maturity Price : 22.98 Evaluated at bid price : 24.27 Bid-YTW : 6.52 % |
PWF.PR.H | Perpetual-Discount | 1.09 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2054-05-15 Maturity Price : 22.07 Evaluated at bid price : 22.30 Bid-YTW : 6.51 % |
GWO.PR.G | Insurance Straight | 1.29 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2054-05-15 Maturity Price : 20.34 Evaluated at bid price : 20.34 Bid-YTW : 6.50 % |
POW.PR.C | Perpetual-Discount | 1.33 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2054-05-15 Maturity Price : 22.66 Evaluated at bid price : 22.90 Bid-YTW : 6.41 % |
MFC.PR.B | Insurance Straight | 1.35 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2054-05-15 Maturity Price : 19.57 Evaluated at bid price : 19.57 Bid-YTW : 6.05 % |
SLF.PR.E | Insurance Straight | 1.38 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2054-05-15 Maturity Price : 19.10 Evaluated at bid price : 19.10 Bid-YTW : 5.99 % |
BN.PR.N | Perpetual-Discount | 1.40 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2054-05-15 Maturity Price : 18.05 Evaluated at bid price : 18.05 Bid-YTW : 6.70 % |
PWF.PR.G | Perpetual-Discount | 1.56 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2054-05-15 Maturity Price : 22.49 Evaluated at bid price : 22.75 Bid-YTW : 6.54 % |
SLF.PR.D | Insurance Straight | 1.76 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2054-05-15 Maturity Price : 19.08 Evaluated at bid price : 19.08 Bid-YTW : 5.92 % |
POW.PR.D | Perpetual-Discount | 1.80 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2054-05-15 Maturity Price : 19.80 Evaluated at bid price : 19.80 Bid-YTW : 6.40 % |
BIP.PR.E | FixedReset Disc | 1.81 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2054-05-15 Maturity Price : 21.66 Evaluated at bid price : 21.95 Bid-YTW : 7.85 % |
POW.PR.A | Perpetual-Discount | 1.86 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2054-05-15 Maturity Price : 21.62 Evaluated at bid price : 21.87 Bid-YTW : 6.48 % |
CU.PR.G | Perpetual-Discount | 2.71 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2054-05-15 Maturity Price : 18.18 Evaluated at bid price : 18.18 Bid-YTW : 6.21 % |
Volume Highlights | |||
Issue | Index | Shares Traded |
Notes |
RY.PR.Z | FixedReset Disc | 446,200 | YTW SCENARIO Maturity Type : Call Maturity Date : 2024-06-23 Maturity Price : 25.00 Evaluated at bid price : 24.96 Bid-YTW : 4.39 % |
BN.PR.N | Perpetual-Discount | 159,712 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2054-05-15 Maturity Price : 18.05 Evaluated at bid price : 18.05 Bid-YTW : 6.70 % |
PWF.PR.Z | Perpetual-Discount | 149,051 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2054-05-15 Maturity Price : 20.10 Evaluated at bid price : 20.10 Bid-YTW : 6.48 % |
NA.PR.S | FixedReset Disc | 97,232 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2054-05-15 Maturity Price : 22.50 Evaluated at bid price : 23.42 Bid-YTW : 6.63 % |
BMO.PR.S | FixedReset Disc | 92,300 | YTW SCENARIO Maturity Type : Call Maturity Date : 2024-06-24 Maturity Price : 25.00 Evaluated at bid price : 24.95 Bid-YTW : 4.77 % |
IFC.PR.I | Insurance Straight | 81,257 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2054-05-15 Maturity Price : 21.42 Evaluated at bid price : 21.69 Bid-YTW : 6.31 % |
There were 26 other index-included issues trading in excess of 10,000 shares. |
Wide Spread Highlights | ||
Issue | Index | Quote Data and Yield Notes |
PWF.PR.F | Perpetual-Discount | Quote: 20.10 – 21.50 Spot Rate : 1.4000 Average : 0.9400 YTW SCENARIO |
MFC.PR.Q | FixedReset Ins Non | Quote: 22.90 – 23.92 Spot Rate : 1.0200 Average : 0.6197 YTW SCENARIO |
MFC.PR.N | FixedReset Ins Non | Quote: 20.85 – 22.30 Spot Rate : 1.4500 Average : 1.0660 YTW SCENARIO |
SLF.PR.C | Insurance Straight | Quote: 18.05 – 19.25 Spot Rate : 1.2000 Average : 0.9289 YTW SCENARIO |
MFC.PR.J | FixedReset Ins Non | Quote: 23.50 – 24.23 Spot Rate : 0.7300 Average : 0.4745 YTW SCENARIO |
IFC.PR.K | Insurance Straight | Quote: 20.97 – 22.00 Spot Rate : 1.0300 Average : 0.8060 YTW SCENARIO |
EFN.PR.C To Be Redeemed
May 14th, 2024Element Fleet Management has announced (in their 24Q1 earnings release, I don’t see a redemption press release):
This announcement validates their earlier anticipation of a redemption.
EFN.PR.C was announced 2014-2-26 as a FixedReset, 6.50%+481, but was not added to HIMIPref™ at that time as the company did not have a credit rating. The company received an initial rating from DBRS on 2015-9-24 and HIMIPref™ commenced tracking its four issues then outstanding shortly thereafter. The extension of the issue was announced 2019-5-22 and it was later announced that EFN.PR.C would reset at 6.210% effective June 30, 2019. I recommended against conversion and there was no conversion. The issue has been tracked by HIMIPref™ but is relegated to the Scraps – FixedReset (Discount) subindex on credit concerns.
Thanks to Assiduous Reader IrateAR for bringing this to my attention!
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