{"id":17239,"date":"2011-12-08T00:14:53","date_gmt":"2011-12-08T04:14:53","guid":{"rendered":"http:\/\/www.prefblog.com\/?p=17239"},"modified":"2011-12-08T00:14:53","modified_gmt":"2011-12-08T04:14:53","slug":"december-7-2011","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=17239","title":{"rendered":"December 7, 2011"},"content":{"rendered":"

FortisBC Energy (formerly Terasen; now owned by Fortis, proud issuer of FTS.PR.C & FTS.PR.E (OperatingRetractible), FTS.PR.F (PerpetualPremium), and FTS.PR.G & FTS.PR.H (FixedReset)) has issued 30-year paper at 4.25%<\/a>.<\/p>\n

DBRS has confirmed BIG.PR.B and BIG.PR.C at Pfd-2<\/a>:<\/p>\n

On December 9, 2010, DBRS confirmed the ratings on the Preferred Shares at Pfd-2. However since that time, the net asset value and downside protection available to the Preferred Shares has declined due to general market instability. This decline has affected several sectors, including the financial services industry, which is the primary investment sector for Big 8 Split Inc. Downside protection has decreased to 56.7% from 62.6% since December 2010 (the S&P\/TSX Composite Bank Index declined 5.9% and the S&P\/TSX Composite Insurance Index declined 18.8% over the same period). In addition, based on the current dividend yield on the Portfolio, the current Preferred Share dividend coverage ratio is approximately 1.5 times. Despite the recent downturn, DBRS remains comfortable confirming the current Pfd-2 ratings of the Preferred Shares, primarily because of the sufficient level of downside protection and dividend coverage available in the transaction, as well as the credit quality and consistency of dividend distributions of the Portfolio holdings.<\/p><\/blockquote>\n

The BoC maintained the overnight rate<\/a>:<\/p>\n

The Bank of Canada today announced that it is maintaining its target for the overnight rate at 1 per cent. The Bank Rate is correspondingly 1 1\/4 per cent and the deposit rate is 3\/4 per cent.<\/p>\n

Uncertainty around the global economic outlook has increased in the weeks since the Bank released its October Monetary Policy Report (MPR). Conditions in global financial markets have deteriorated as the sovereign debt crisis in Europe has deepened. Additional measures will be required to contain the European crisis. The recession in Europe is now expected to be more pronounced than the Bank had anticipated in October, as a result of increased deleveraging and tighter financial conditions, as well as necessary fiscal austerity and structural reforms.
…<\/b>
On balance, recent economic indicators in Canada suggest that growth in the second half of this year is slightly stronger than the Bank projected in October. Household expenditures have more momentum than had been expected and business investment remains solid. Going forward, the weaker external outlook is expected to dampen GDP growth in Canada through financial, confidence and trade channels. The economy also continues to face competitiveness challenges, including the persistent strength of the Canadian dollar.<\/p>\n

Although total CPI inflation has been slightly higher than projected, the Bank continues to expect the inflation rate to decline as a result of reduced pressures from food and energy prices and ongoing excess supply in the economy. Core inflation has also been slightly firmer than projected and is expected to ease as the output gap persists well into 2013.<\/p><\/blockquote>\n

Floaters didn’t do very well today – maybe a little bit of capitulation by the prophets of the inflation apocalypse?<\/p>\n

It was a good day for the Canadian preferred share market, with PerpetualDiscounts winning 15bp, FixedResets up 7bp and DeemedRetractibles gaining 9bp. Volatility was OK; volume was average.<\/p>\n

PerpetualDiscounts now yield 5.19%, equivalent to 6.75% at the standard equivalency factor of 1.3x. Long corporates<\/a> are now a little under 4.80%, so the pre-tax interest-equivalent spread (also called the Seniority Spread) is now 195bp, a significant tightening from the 210bp reported November 30<\/a> as PerpetualDiscounts have come in.<\/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>\n-2.0200 %<\/td>\n2,019.7<\/td>\n<\/tr>\n
FixedFloater<\/td>\n4.86 %<\/td>\n4.59 %<\/td>\n35,716<\/td>\n17.13<\/td>\n1<\/td>\n0.3077 %<\/td>\n3,172.9<\/td>\n<\/tr>\n
Floater<\/td>\n3.28 %<\/td>\n3.56 %<\/td>\n67,090<\/td>\n18.30<\/td>\n3<\/td>\n-2.0200 %<\/td>\n2,180.8<\/td>\n<\/tr>\n
OpRet<\/td>\n4.89 %<\/td>\n0.99 %<\/td>\n59,091<\/td>\n1.44<\/td>\n6<\/td>\n0.2240 %<\/td>\n2,482.8<\/td>\n<\/tr>\n
SplitShare<\/td>\n5.79 %<\/td>\n6.73 %<\/td>\n61,103<\/td>\n5.12<\/td>\n3<\/td>\n0.2823 %<\/td>\n2,535.7<\/td>\n<\/tr>\n
Interest-Bearing<\/td>\n0.00 %<\/td>\n0.00 %<\/td>\n0<\/td>\n0.00<\/td>\n0<\/td>\n0.2240 %<\/td>\n2,270.3<\/td>\n<\/tr>\n
Perpetual-Premium<\/td>\n5.51 %<\/td>\n3.02 %<\/td>\n94,346<\/td>\n0.87<\/td>\n18<\/td>\n0.1731 %<\/td>\n2,161.0<\/td>\n<\/tr>\n
Perpetual-Discount<\/td>\n5.24 %<\/td>\n5.19 %<\/td>\n106,632<\/td>\n15.01<\/td>\n12<\/td>\n0.1452 %<\/td>\n2,308.1<\/td>\n<\/tr>\n
FixedReset<\/td>\n5.10 %<\/td>\n3.14 %<\/td>\n228,010<\/td>\n2.46<\/td>\n64<\/td>\n0.0709 %<\/td>\n2,339.8<\/td>\n<\/tr>\n
Deemed-Retractible<\/td>\n5.04 %<\/td>\n4.39 %<\/td>\n195,066<\/td>\n3.82<\/td>\n46<\/td>\n0.0915 %<\/td>\n2,226.3<\/td>\n<\/tr>\n<\/table>\n\n\n\n\n\n\n\n\n\n
Performance Highlights<\/strong><\/td>\n<\/tr>\n
Issue<\/td>\nIndex<\/td>\nChange<\/td>\nNotes<\/td>\n<\/tr>\n
BAM.PR.K<\/td>\nFloater<\/td>\n-5.24 %<\/td>\nNot to be taken seriously. It’s simply a matter of the bid disappearing after the issue traded 8,225 shares in a range of 14.76-90, last trade at 14.81.
\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2041-12-07
\nMaturity Price : 14.10
\nEvaluated at bid price : 14.10
\nBid-YTW : 3.77 %<\/td>\n<\/tr>\n
BAM.PR.B<\/td>\nFloater<\/td>\n-1.52 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2041-12-07
\nMaturity Price : 14.90
\nEvaluated at bid price : 14.90
\nBid-YTW : 3.56 %<\/td>\n<\/tr>\n
MFC.PR.F<\/td>\nFixedReset<\/td>\n1.01 %<\/td>\nYTW SCENARIO
\nMaturity Type : Hard Maturity
\nMaturity Date\t: 2022-01-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 23.96
\nBid-YTW : 3.96 %<\/td>\n<\/tr>\n
ENB.PR.A<\/td>\nPerpetual-Premium<\/td>\n1.16 %<\/td>\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2012-01-06
\nMaturity Price : 25.00
\nEvaluated at bid price : 26.10
\nBid-YTW : -40.97 %<\/td>\n<\/tr>\n
BAM.PR.O<\/td>\nOpRet<\/td>\n1.72 %<\/td>\nYTW SCENARIO
\nMaturity Type : Option Certainty
\nMaturity Date\t: 2013-06-30
\nMaturity Price : 25.00
\nEvaluated at bid price : 26.05
\nBid-YTW : 2.85 %<\/td>\n<\/tr>\n
IAG.PR.A<\/td>\nDeemed-Retractible<\/td>\n1.81 %<\/td>\nYTW SCENARIO
\nMaturity Type : Hard Maturity
\nMaturity Date\t: 2022-01-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 22.55
\nBid-YTW : 5.89 %<\/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
CM.PR.E<\/td>\nPerpetual-Premium<\/td>\n71,556<\/td>\nDesjardins bought two blocks from Nesbitt, 10,000 and 13,900 shares, both at 25.25.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2012-10-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.23
\nBid-YTW : 5.21 %<\/td>\n<\/tr>\n
TD.PR.E<\/td>\nFixedReset<\/td>\n57,145<\/td>\nRBC crossed 50,000 at 27.10.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2014-04-30
\nMaturity Price : 25.00
\nEvaluated at bid price : 27.06
\nBid-YTW : 2.94 %<\/td>\n<\/tr>\n
BNS.PR.O<\/td>\nDeemed-Retractible<\/td>\n56,300<\/td>\nScotia crossed 50,000 at 26.82.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2013-04-26
\nMaturity Price : 26.00
\nEvaluated at bid price : 26.82
\nBid-YTW : 3.44 %<\/td>\n<\/tr>\n
ENB.PR.D<\/td>\nFixedReset<\/td>\n55,330<\/td>\nRecent new issue<\/a>.
\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2041-12-07
\nMaturity Price : 23.15
\nEvaluated at bid price : 25.14
\nBid-YTW : 3.67 %<\/td>\n<\/tr>\n
RY.PR.H<\/td>\nDeemed-Retractible<\/td>\n46,878<\/td>\nNesbitt crossed 40,000 at 26.70.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2013-05-24
\nMaturity Price : 26.00
\nEvaluated at bid price : 26.68
\nBid-YTW : 3.73 %<\/td>\n<\/tr>\n
TD.PR.R<\/td>\nDeemed-Retractible<\/td>\n46,006<\/td>\nScotia crossed 40,000 at 26.87.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2013-04-30
\nMaturity Price : 26.00
\nEvaluated at bid price : 26.87
\nBid-YTW : 3.31 %<\/td>\n<\/tr>\n
There were 36 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.K<\/td>\nFloater<\/td>\nQuote: 14.10 – 14.99
\nSpot Rate : 0.8900
\nAverage : 0.5471<\/p>\n

YTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2041-12-07
\nMaturity Price : 14.10
\nEvaluated at bid price : 14.10
\nBid-YTW : 3.77 %<\/td>\n<\/tr>\n

RY.PR.G<\/td>\nDeemed-Retractible<\/td>\nQuote: 25.25 – 25.61
\nSpot Rate : 0.3600
\nAverage : 0.2408<\/p>\n

YTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2016-05-24
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.25
\nBid-YTW : 4.31 %<\/td>\n<\/tr>\n

BAM.PR.G<\/td>\nFixedFloater<\/td>\nQuote: 19.56 – 19.99
\nSpot Rate : 0.4300
\nAverage : 0.3392<\/p>\n

YTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2041-12-07
\nMaturity Price : 25.00
\nEvaluated at bid price : 19.56
\nBid-YTW : 4.59 %<\/td>\n<\/tr>\n

BAM.PR.H<\/td>\nOpRet<\/td>\nQuote: 25.40 – 25.71
\nSpot Rate : 0.3100
\nAverage : 0.2239<\/p>\n

YTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2012-01-06
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.40
\nBid-YTW : -0.82 %<\/td>\n<\/tr>\n

TCA.PR.X<\/td>\nPerpetual-Premium<\/td>\nQuote: 52.61 – 52.89
\nSpot Rate : 0.2800
\nAverage : 0.2014<\/p>\n

YTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2013-10-15
\nMaturity Price : 50.00
\nEvaluated at bid price : 52.61
\nBid-YTW : 3.02 %<\/td>\n<\/tr>\n

RY.PR.T<\/td>\nFixedReset<\/td>\nQuote: 27.15 – 27.44
\nSpot Rate : 0.2900
\nAverage : 0.2142<\/p>\n

YTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2014-08-24
\nMaturity Price : 25.00
\nEvaluated at bid price : 27.15
\nBid-YTW : 3.04 %<\/td>\n<\/tr>\n<\/table>\n","protected":false},"excerpt":{"rendered":"

FortisBC Energy (formerly Terasen; now owned by Fortis, proud issuer of FTS.PR.C & FTS.PR.E (OperatingRetractible), FTS.PR.F (PerpetualPremium), and FTS.PR.G & FTS.PR.H (FixedReset)) has issued 30-year paper at 4.25%. DBRS has confirmed BIG.PR.B and BIG.PR.C at …<\/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-17239","post","type-post","status-publish","format-standard","hentry","category-market-action"],"_links":{"self":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/17239","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=17239"}],"version-history":[{"count":0,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/17239\/revisions"}],"wp:attachment":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=17239"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=17239"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=17239"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}