{"id":14860,"date":"2011-04-27T00:52:51","date_gmt":"2011-04-27T04:52:51","guid":{"rendered":"http:\/\/www.prefblog.com\/?p=14860"},"modified":"2011-04-27T00:52:51","modified_gmt":"2011-04-27T04:52:51","slug":"april-26-2011","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=14860","title":{"rendered":"April 26, 2011"},"content":{"rendered":"

The market is anticipating European sovereign default<\/a>:<\/p>\n

Yields on government securities from Greece, Ireland and Portugal reached records amid speculation the heavily indebted nations won\u2019t be able to avoid restructuring.<\/p>\n

Ireland\u2019s two-year yield reached a euro-era record 12.08 percent after the European Union said the nation\u2019s debt burden surged the most in the currency area last year. Greek two-year yields have climbed almost 870 basis points this month, reaching 24.45 percent today as investors priced in losses, or so-called haircuts, they may incur in the event of a restructuring.
…<\/b>
Portugal\u2019s two-year note yields touched a euro-era record of 11.74 percent, up from 8.78 percent at the end of last month. The 10-year yield reached a record 9.61 percent today, compared with 8.41 percent on March 31.<\/p><\/blockquote>\n

Greece’s deficit was bigger than expected<\/a>:<\/p>\n

Greece\u2019s chances of avoiding a debt-crunching exercise faded to almost nothing with the revelation that its budget deficit is going in the wrong direction in spite of robust efforts to reduce government spending.<\/p>\n

The country\u2019s budget deficit in 2010 was 10.5 per cent of gross domestic product, Eurostat, the European Union\u2019s statistics agency, reported on Tuesday. The figure was considerably bigger than Greek government\u2019s own deficit target of 9.4 per cent and the European Commission\u2019s estimate of 9.6 per cent.<\/p><\/blockquote>\n

DBRS confirmed BAM<\/a>, but was careful to include some warnings:<\/p>\n

Overall, DBRS still remains concerned with Brookfield\u2019s aggressive expansion program and the possible impact it may have on its overall risk profile. Brookfield\u2019s investments normally include real, low risk assets that generate steady cash flow. If there was a shift towards more speculative investments intended for shorter hold periods, the ratings could come under pressure. DBRS notes that the financial packaging of Brookfield\u2019s investments within its portfolio can be complex. The transparency for this and intercompany transactions can be a challenge at times.<\/p>\n

DBRS notes that while Brookfield\u2019s corporate liquidity and cash flow has been reasonable, it is not sufficient to be a primary funding source for large new investments. In fact, the current size of corporate debt and preferred shares is approaching the limits for the current rating category. Thus far, concerns that sizable transactions could negatively affect the Company\u2019s credit ratings have been mitigated with the used of co-investor capital and non-recourse debt. Even so, DBRS notes that the non-recourse debt at the operating levels is significant and that it has first claim on the related cash flows. It also presents some group refinancing risk.<\/p><\/blockquote>\n

Japan has joined S&P’s list of sovereigns with a negative outlook<\/a>.<\/p>\n

Apparently Obesity is expected to surpass smoking as the leading cause of preventable morbidity and mortality<\/a>. I can’t wait for the time when the do-gooders have had their way with this one! Outside every office tower and public place will be a long line of fatties scarfing down their french fries and pizza!<\/p>\n

It was a mixed day on the Canadian preferred share market, with PerpetualDiscounts off 2bp, FixedResets losing 11bp and DeemedRetractibles up 5bp. Not much volatility. Volume was average.<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n
HIMIPref™ Preferred Indices
These values reflect the December 2008 revision of the HIMIPref™ Indices<\/strong>
Values are provisional and are finalized monthly<\/td>\n<\/tr>\n
Index<\/td>\nMean
Current
Yield
(at bid)<\/td>\n		Median
YTW<\/td>\n		Median
Average
Trading
Value<\/td>\n		Median
Mod Dur
(YTW)<\/td>\n		Issues<\/td>\nDay’s Perf.<\/td>\nIndex Value<\/td>\n<\/tr>\n
Ratchet<\/td>\n0.00 %<\/td>\n0.00 %<\/td>\n0<\/td>\n0.00<\/td>\n0<\/td>\n0.0832 %<\/td>\n2,416.1<\/td>\n<\/tr>\n
FixedFloater<\/td>\n0.00 %<\/td>\n0.00 %<\/td>\n0<\/td>\n0.00<\/td>\n0<\/td>\n0.0832 %<\/td>\n3,633.8<\/td>\n<\/tr>\n
Floater<\/td>\n2.49 %<\/td>\n2.26 %<\/td>\n35,244<\/td>\n21.63<\/td>\n4<\/td>\n0.0832 %<\/td>\n2,608.8<\/td>\n<\/tr>\n
OpRet<\/td>\n4.92 %<\/td>\n3.24 %<\/td>\n57,112<\/td>\n2.05<\/td>\n8<\/td>\n0.0048 %<\/td>\n2,411.4<\/td>\n<\/tr>\n
SplitShare<\/td>\n5.20 %<\/td>\n-1.29 %<\/td>\n84,359<\/td>\n0.63<\/td>\n6<\/td>\n0.0866 %<\/td>\n2,496.9<\/td>\n<\/tr>\n
Interest-Bearing<\/td>\n0.00 %<\/td>\n0.00 %<\/td>\n0<\/td>\n0.00<\/td>\n0<\/td>\n0.0048 %<\/td>\n2,205.0<\/td>\n<\/tr>\n
Perpetual-Premium<\/td>\n5.80 %<\/td>\n5.70 %<\/td>\n116,474<\/td>\n6.12<\/td>\n8<\/td>\n-0.0348 %<\/td>\n2,049.8<\/td>\n<\/tr>\n
Perpetual-Discount<\/td>\n5.58 %<\/td>\n5.56 %<\/td>\n133,237<\/td>\n14.39<\/td>\n16<\/td>\n-0.0173 %<\/td>\n2,121.0<\/td>\n<\/tr>\n
FixedReset<\/td>\n5.18 %<\/td>\n3.51 %<\/td>\n204,830<\/td>\n2.91<\/td>\n57<\/td>\n-0.1110 %<\/td>\n2,290.0<\/td>\n<\/tr>\n
Deemed-Retractible<\/td>\n5.28 %<\/td>\n5.22 %<\/td>\n295,180<\/td>\n8.11<\/td>\n53<\/td>\n0.0529 %<\/td>\n2,075.2<\/td>\n<\/tr>\n<\/table>\n\n\n\n\n\n
Performance Highlights<\/strong><\/td>\n<\/tr>\n
Issue<\/td>\nIndex<\/td>\nChange<\/td>\nNotes<\/td>\n<\/tr>\n
IAG.PR.A<\/td>\nDeemed-Retractible<\/td>\n-1.52 %<\/td>\nYTW SCENARIO
\nMaturity Type : Hard Maturity
\nMaturity Date\t: 2022-01-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 21.38
\nBid-YTW : 6.58 %<\/td>\n<\/tr>\n
SLF.PR.G<\/td>\nFixedReset<\/td>\n-1.14 %<\/td>\nYTW SCENARIO
\nMaturity Type : Hard Maturity
\nMaturity Date\t: 2022-01-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.26
\nBid-YTW : 4.08 %<\/td>\n<\/tr>\n<\/table>\n\n\n\n\n\n\n\n\n\n\n
Volume Highlights<\/strong><\/td>\n<\/tr>\n
Issue<\/td>\nIndex<\/td>\nShares
Traded<\/td>\n		Notes<\/td>\n<\/tr>\n
RY.PR.E<\/td>\nDeemed-Retractible<\/td>\n281,290<\/td>\nDesjardins crossed 128,700 at 23.38, then another 130,000 at the same price.
\nYTW SCENARIO
\nMaturity Type : Hard Maturity
\nMaturity Date\t: 2022-01-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 23.41
\nBid-YTW : 5.27 %<\/td>\n<\/tr>\n
CM.PR.P<\/td>\nDeemed-Retractible<\/td>\n86,330<\/td>\nNational Bank crossed 11,700 at 25.20; RBC crossed two blocks of 25,000 each and TD crossed 20,000, all at the same price.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2012-11-28
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.19
\nBid-YTW : 4.98 %<\/td>\n<\/tr>\n
CIU.PR.B<\/td>\nFixedReset<\/td>\n85,250<\/td>\nRBC crossed 10,000 at 27.65; then another 75,000 at 27.74.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2014-07-01
\nMaturity Price : 25.00
\nEvaluated at bid price : 27.66
\nBid-YTW : 3.55 %<\/td>\n<\/tr>\n
MFC.PR.D<\/td>\nFixedReset<\/td>\n57,605<\/td>\nRBC crossed 49,200 at 27.50.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2014-07-19
\nMaturity Price : 25.00
\nEvaluated at bid price : 27.49
\nBid-YTW : 3.60 %<\/td>\n<\/tr>\n
BAM.PR.B<\/td>\nFloater<\/td>\n34,202<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2041-04-26
\nMaturity Price : 19.00
\nEvaluated at bid price : 19.00
\nBid-YTW : 2.78 %<\/td>\n<\/tr>\n
BNS.PR.L<\/td>\nDeemed-Retractible<\/td>\n33,004<\/td>\nTD crossed 20,000 at 23.90.
\nYTW SCENARIO
\nMaturity Type : Hard Maturity
\nMaturity Date\t: 2022-01-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 23.90
\nBid-YTW : 5.06 %<\/td>\n<\/tr>\n
There were 34 other index-included issues trading in excess of 10,000 shares.<\/td>\n<\/tr>\n<\/table>\n\n\n\n\n\n\n\n\n\n
Wide Spread Highlights<\/strong><\/td>\n<\/tr>\n
Issue<\/td>\nIndex<\/td>\nQuote Data and Yield Notes<\/td>\n<\/tr>\n
BAM.PR.R<\/td>\nFixedReset<\/td>\nQuote: 25.65 – 26.34
\nSpot Rate : 0.6900
\nAverage : 0.4409<\/p>\n

YTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2021-07-30
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.65
\nBid-YTW : 4.92 %<\/td>\n<\/tr>\n

ELF.PR.F<\/td>\nDeemed-Retractible<\/td>\nQuote: 22.52 – 22.96
\nSpot Rate : 0.4400
\nAverage : 0.3443<\/p>\n

YTW SCENARIO
\nMaturity Type : Hard Maturity
\nMaturity Date\t: 2022-01-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 22.52
\nBid-YTW : 6.67 %<\/td>\n<\/tr>\n

MFC.PR.B<\/td>\nDeemed-Retractible<\/td>\nQuote: 21.16 – 21.43
\nSpot Rate : 0.2700
\nAverage : 0.1859<\/p>\n

YTW SCENARIO
\nMaturity Type : Hard Maturity
\nMaturity Date\t: 2022-01-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 21.16
\nBid-YTW : 6.78 %<\/td>\n<\/tr>\n

CU.PR.A<\/td>\nPerpetual-Premium<\/td>\nQuote: 25.16 – 25.34
\nSpot Rate : 0.1800
\nAverage : 0.1123<\/p>\n

YTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2041-04-26
\nMaturity Price : 24.92
\nEvaluated at bid price : 25.16
\nBid-YTW : 5.85 %<\/td>\n<\/tr>\n

TD.PR.Q<\/td>\nDeemed-Retractible<\/td>\nQuote: 25.65 – 25.85
\nSpot Rate : 0.2000
\nAverage : 0.1400<\/p>\n

YTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2017-03-02
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.65
\nBid-YTW : 5.10 %<\/td>\n<\/tr>\n

BAM.PR.H<\/td>\nOpRet<\/td>\nQuote: 25.28 – 25.54
\nSpot Rate : 0.2600
\nAverage : 0.2009<\/p>\n

YTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2011-10-30
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.28
\nBid-YTW : 4.32 %<\/td>\n<\/tr>\n<\/table>\n","protected":false},"excerpt":{"rendered":"

The market is anticipating European sovereign default: Yields on government securities from Greece, Ireland and Portugal reached records amid speculation the heavily indebted nations won\u2019t be able to avoid restructuring. Ireland\u2019s two-year yield reached a …<\/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-14860","post","type-post","status-publish","format-standard","hentry","category-market-action"],"_links":{"self":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/14860","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=14860"}],"version-history":[{"count":0,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/14860\/revisions"}],"wp:attachment":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=14860"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=14860"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=14860"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}