{"id":11036,"date":"2010-06-02T21:35:10","date_gmt":"2010-06-03T01:35:10","guid":{"rendered":"http:\/\/www.prefblog.com\/?p=11036"},"modified":"2010-06-02T21:35:10","modified_gmt":"2010-06-03T01:35:10","slug":"june-2-2010","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=11036","title":{"rendered":"June 2, 2010"},"content":{"rendered":"<p>The Financial Crisis Inquiry Commission kicks off its <a href=\"http:\/\/www.fcic.gov\/hearings\/06-02-2010.php\">hearings on credit ratings<\/a> today, including <a href=\"http:\/\/www.fcic.gov\/hearings\/pdfs\/2010-0602-McDaniel.pdf\">testimony<\/a> from Raymond W. McDaniel, Chairman and Chief Executive Officer, Moody\u2019s Corporation:<\/p>\n<ul>\n<li>Credit Rating Agencies are commenters, not gatekeepers\n<li>Credit Ratings are not investment advice\n<li>Rating analysts do not structure or underwrite securities\n<li>Investors should not rely on rely on ratings to buy, sell or hold securities (investors must do their own work &#8211; you cannot outsource responsibility)\n<li>Every business model has conflicts of interest that must be managed\n<li>Concerns about rating shopping do not stem from the business model<\/ul>\n<p>Commission Chairman Angelidies, determined to display his prejudice, <a href=\"http:\/\/www.bloomberg.com\/apps\/news?pid=20601087&#038;sid=aeY3YkZQr1cg&#038;pos=3\">has been quoted<\/a>:<\/p>\n<blockquote><p>In his opening remarks, Chairman Phil Angelides said, \u201cTo be blunt, the picture is not pretty.\u201d He added that \u201cMoody\u2019s did very well. The investors who relied on Moody\u2019s ratings did not do so well.\u201d<\/p>\n<p>Angelides characterized the ratings service as a \u201ctriple-A factory,\u201d saying that it assigned the top grade to 42,625 residential mortgage-backed securities from 2000 to 2007.<\/p>\n<p>\u201cIn 2006 alone, Moody\u2019s gave 9,029 mortgage-backed securities a triple-A rating,\u201d said Angelides, whose panel was created to investigate the causes of the financial crisis as Congress debates the most sweeping overhaul of banking regulations since the Great Depression. \u201cTo put that in perspective, Moody\u2019s currently bestows its triple-A rating on just four American corporations.\u201d<\/p><\/blockquote>\n<p>Another day of fine returns in the Canadian preferred share market. &#8220;They&#8221; should &#8220;raise interest rates&#8221; <a href=\"http:\/\/www.prefblog.com\/?p=11020\">more often<\/a>! PerpetualDiscounts were up 31bp, while FixedResets gained 4bp as volume continued at slightly elevated levels.<\/p>\n<p>No details of block trades are given today &#8211; the <a href=\"http:\/\/www.financialpost.com\/markets\/market-data\/market-block_trades.html?tmp=block_trades\">usual data source<\/a> has been 404ed and it appears that the Financial Post has not yet completed implementation of <a href=\"http:\/\/www.financialpost.com\/markets\/data\/market-block_trades.html\">the new publication mechanism<\/a> &#8211; either that, or I can&#8217;t figure out the easy-to-use intuitive interface!<\/p>\n<p>PerpetualDiscounts now yield 6.23%, equivalent to 8.72% interest at the standard equivalency factor of 1.4x. <a href=\"http:\/\/www.canadianbondindices.com\/ltbi.asp\">Long corporates<\/a> are now at about 5.65%, so the pre-tax interest-equivalent spread (also called the Seniority Spread) now stands at about 305bp, a 10bp tightening from the 315bp recorded at <a href=\"http:\/\/www.prefblog.com\/?p=11001\">month end<\/a>.<\/p>\n<table border='1'>\n<tr>\n<td colspan='8'><strong>HIMIPref&trade; Preferred Indices<br \/>These values reflect the December 2008 revision of the HIMIPref&trade; Indices<\/strong><br \/>Values are provisional and are finalized monthly<\/td>\n<\/tr>\n<tr>\n<td>Index<\/td>\n<td>Mean<br \/>Current<br \/>Yield<br \/>(at bid)<\/td>\n<td>Median<br \/>YTW<\/td>\n<td>Median<br \/>Average<br \/>Trading<br \/>Value<\/td>\n<td>Median<br \/>Mod Dur<br \/>(YTW)<\/td>\n<td>Issues<\/td>\n<td>Day&#8217;s Perf.<\/td>\n<td>Index Value<\/td>\n<\/tr>\n<tr>\n<td>Ratchet<\/td>\n<td>2.62 %<\/td>\n<td>2.77 %<\/td>\n<td>43,910<\/td>\n<td>20.89<\/td>\n<td>1<\/td>\n<td>1.1765 %<\/td>\n<td>2,117.3<\/td>\n<\/tr>\n<tr>\n<td>FixedFloater<\/td>\n<td>5.24 %<\/td>\n<td>3.31 %<\/td>\n<td>30,220<\/td>\n<td>19.94<\/td>\n<td>1<\/td>\n<td>-0.4317 %<\/td>\n<td>3,055.4<\/td>\n<\/tr>\n<tr>\n<td>Floater<\/td>\n<td>2.41 %<\/td>\n<td>2.79 %<\/td>\n<td>96,134<\/td>\n<td>20.20<\/td>\n<td>3<\/td>\n<td>-0.0734 %<\/td>\n<td>2,239.6<\/td>\n<\/tr>\n<tr>\n<td>OpRet<\/td>\n<td>4.90 %<\/td>\n<td>3.84 %<\/td>\n<td>97,954<\/td>\n<td>0.96<\/td>\n<td>11<\/td>\n<td>0.1279 %<\/td>\n<td>2,307.1<\/td>\n<\/tr>\n<tr>\n<td>SplitShare<\/td>\n<td>6.44 %<\/td>\n<td>5.88 %<\/td>\n<td>106,610<\/td>\n<td>0.08<\/td>\n<td>2<\/td>\n<td>-0.0888 %<\/td>\n<td>2,151.9<\/td>\n<\/tr>\n<tr>\n<td>Interest-Bearing<\/td>\n<td>0.00 %<\/td>\n<td>0.00 %<\/td>\n<td>0<\/td>\n<td>0.00<\/td>\n<td>0<\/td>\n<td>0.1279 %<\/td>\n<td>2,109.6<\/td>\n<\/tr>\n<tr>\n<td>Perpetual-Premium<\/td>\n<td>0.00 %<\/td>\n<td>0.00 %<\/td>\n<td>0<\/td>\n<td>0.00<\/td>\n<td>0<\/td>\n<td>0.3124 %<\/td>\n<td>1,833.8<\/td>\n<\/tr>\n<tr>\n<td>Perpetual-Discount<\/td>\n<td>6.18 %<\/td>\n<td>6.23 %<\/td>\n<td>207,937<\/td>\n<td>13.56<\/td>\n<td>77<\/td>\n<td>0.3124 %<\/td>\n<td>1,735.9<\/td>\n<\/tr>\n<tr>\n<td>FixedReset<\/td>\n<td>5.47 %<\/td>\n<td>4.23 %<\/td>\n<td>430,364<\/td>\n<td>3.53<\/td>\n<td>45<\/td>\n<td>0.0404 %<\/td>\n<td>2,158.9<\/td>\n<\/tr>\n<\/table>\n<table border='1'>\n<tr>\n<td colspan='4'><strong>Performance Highlights<\/strong><\/td>\n<\/tr>\n<tr>\n<td>Issue<\/td>\n<td>Index<\/td>\n<td>Change<\/td>\n<td>Notes<\/td>\n<\/tr>\n<tr>\n<td>ENB.PR.A<\/td>\n<td>Perpetual-Discount<\/td>\n<td>-1.98 %<\/td>\n<td>YTW SCENARIO<br \/>\nMaturity Type   : Limit Maturity<br \/>\nMaturity Date\t: 2040-06-02<br \/>\nMaturity Price  : 23.01<br \/>\nEvaluated at bid price : 23.28<br \/>\nBid-YTW : 5.94 %<\/td>\n<\/tr>\n<tr>\n<td>BAM.PR.E<\/td>\n<td>Ratchet<\/td>\n<td>1.18 %<\/td>\n<td>YTW SCENARIO<br \/>\nMaturity Type   : Limit Maturity<br \/>\nMaturity Date\t: 2040-06-02<br \/>\nMaturity Price  : 22.87<br \/>\nEvaluated at bid price : 21.50<br \/>\nBid-YTW : 2.77 %<\/td>\n<\/tr>\n<tr>\n<td>CIU.PR.A<\/td>\n<td>Perpetual-Discount<\/td>\n<td>1.20 %<\/td>\n<td>YTW SCENARIO<br \/>\nMaturity Type   : Limit Maturity<br \/>\nMaturity Date\t: 2040-06-02<br \/>\nMaturity Price  : 19.35<br \/>\nEvaluated at bid price : 19.35<br \/>\nBid-YTW : 5.99 %<\/td>\n<\/tr>\n<tr>\n<td>GWO.PR.F<\/td>\n<td>Perpetual-Discount<\/td>\n<td>1.22 %<\/td>\n<td>YTW SCENARIO<br \/>\nMaturity Type   : Limit Maturity<br \/>\nMaturity Date\t: 2040-06-02<br \/>\nMaturity Price  : 23.02<br \/>\nEvaluated at bid price : 23.30<br \/>\nBid-YTW : 6.33 %<\/td>\n<\/tr>\n<tr>\n<td>PWF.PR.G<\/td>\n<td>Perpetual-Discount<\/td>\n<td>1.26 %<\/td>\n<td>YTW SCENARIO<br \/>\nMaturity Type   : Limit Maturity<br \/>\nMaturity Date\t: 2040-06-02<br \/>\nMaturity Price  : 23.14<br \/>\nEvaluated at bid price : 23.39<br \/>\nBid-YTW : 6.39 %<\/td>\n<\/tr>\n<tr>\n<td>PWF.PR.H<\/td>\n<td>Perpetual-Discount<\/td>\n<td>1.33 %<\/td>\n<td>YTW SCENARIO<br \/>\nMaturity Type   : Limit Maturity<br \/>\nMaturity Date\t: 2040-06-02<br \/>\nMaturity Price  : 22.53<br \/>\nEvaluated at bid price : 22.80<br \/>\nBid-YTW : 6.38 %<\/td>\n<\/tr>\n<\/table>\n<table border='1'>\n<tr>\n<td colspan='4'><strong>Volume Highlights<\/strong><\/td>\n<\/tr>\n<tr>\n<td>Issue<\/td>\n<td>Index<\/td>\n<td>Shares<br \/>Traded<\/td>\n<td>Notes<\/td>\n<\/tr>\n<tr>\n<td>RY.PR.X<\/td>\n<td>FixedReset<\/td>\n<td>313,475<\/td>\n<td>YTW SCENARIO<br \/>\nMaturity Type   : Call<br \/>\nMaturity Date\t: 2014-09-23<br \/>\nMaturity Price  : 25.00<br \/>\nEvaluated at bid price : 27.00<br \/>\nBid-YTW : 4.31 %<\/td>\n<\/tr>\n<tr>\n<td>IGM.PR.B<\/td>\n<td>Perpetual-Discount<\/td>\n<td>95,285<\/td>\n<td>YTW SCENARIO<br \/>\nMaturity Type   : Limit Maturity<br \/>\nMaturity Date\t: 2040-06-02<br \/>\nMaturity Price  : 22.83<br \/>\nEvaluated at bid price : 22.96<br \/>\nBid-YTW : 6.51 %<\/td>\n<\/tr>\n<tr>\n<td>CM.PR.J<\/td>\n<td>Perpetual-Discount<\/td>\n<td>33,126<\/td>\n<td>YTW SCENARIO<br \/>\nMaturity Type   : Limit Maturity<br \/>\nMaturity Date\t: 2040-06-02<br \/>\nMaturity Price  : 18.30<br \/>\nEvaluated at bid price : 18.30<br \/>\nBid-YTW : 6.24 %<\/td>\n<\/tr>\n<tr>\n<td>POW.PR.D<\/td>\n<td>Perpetual-Discount<\/td>\n<td>30,100<\/td>\n<td>YTW SCENARIO<br \/>\nMaturity Type   : Limit Maturity<br \/>\nMaturity Date\t: 2040-06-02<br \/>\nMaturity Price  : 20.02<br \/>\nEvaluated at bid price : 20.02<br \/>\nBid-YTW : 6.35 %<\/td>\n<\/tr>\n<tr>\n<td>CM.PR.H<\/td>\n<td>Perpetual-Discount<\/td>\n<td>27,345<\/td>\n<td>YTW SCENARIO<br \/>\nMaturity Type   : Limit Maturity<br \/>\nMaturity Date\t: 2040-06-02<br \/>\nMaturity Price  : 19.43<br \/>\nEvaluated at bid price : 19.43<br \/>\nBid-YTW : 6.27 %<\/td>\n<\/tr>\n<tr>\n<td>CM.PR.I<\/td>\n<td>Perpetual-Discount<\/td>\n<td>26,900<\/td>\n<td>YTW SCENARIO<br \/>\nMaturity Type   : Limit Maturity<br \/>\nMaturity Date\t: 2040-06-02<br \/>\nMaturity Price  : 19.15<br \/>\nEvaluated at bid price : 19.15<br \/>\nBid-YTW : 6.22 %<\/td>\n<\/tr>\n<tr>\n<td colspan='4'>There were 32 other index-included issues trading in excess of 10,000 shares.<\/td>\n<\/tr>\n<\/table>\n","protected":false},"excerpt":{"rendered":"<p>The Financial Crisis Inquiry Commission kicks off its hearings on credit ratings today, including testimony from Raymond W. McDaniel, Chairman and Chief Executive Officer, Moody\u2019s Corporation: Credit Rating Agencies are commenters, not gatekeepers Credit Ratings &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[15],"tags":[],"class_list":["post-11036","post","type-post","status-publish","format-standard","hentry","category-market-action"],"_links":{"self":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/11036","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=11036"}],"version-history":[{"count":0,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/11036\/revisions"}],"wp:attachment":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=11036"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=11036"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=11036"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}