{"id":19785,"date":"2012-09-20T01:22:16","date_gmt":"2012-09-20T05:22:16","guid":{"rendered":"http:\/\/www.prefblog.com\/?p=19785"},"modified":"2012-09-20T01:22:16","modified_gmt":"2012-09-20T05:22:16","slug":"september-19-2012","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=19785","title":{"rendered":"September 19, 2012"},"content":{"rendered":"

Inflation expectations can become self-fulfilling, which worries Richard Fisher<\/a>:<\/p>\n

Federal Reserve Bank of Dallas President Richard Fisher said the central bank\u2019s third round of large-scale asset purchases has led to an increase in market expectations for higher inflation without more job creation.<\/p>\n

\u201cI do not see an overall argument for letting inflation rise to levels where we might scare the market,\u201d Fisher said on Bloomberg Radio\u2019s \u201cThe Hays Advantage\u201d with Kathleen Hays and Vonnie Quinn. \u201cWe have seen a sharp rise in inflation expectations. If you let this get out of hand, then I think we will have a market reaction.\u201d
…<\/b>
Measures of expected future inflation \u201chave ramped up pretty quickly,\u201d Fisher said. The five-year, five-year forward breakeven rate, which projects the pace of price increases starting in 2017, rose to 2.88 percent on Sept. 14, the day after the FOMC decided on QE3. That was up half a percentage point from July 26.<\/p>\n

Congress\u2019s inaction on fiscal policy and excessive government regulation are holding back businesses from spending on hiring and investment, Fisher said in a later Bloomberg Television interview. The Fed\u2019s stimulus efforts, or so-called quantitative easing, won\u2019t work because the central bank can\u2019t address those obstacles to growth, he said.<\/p><\/blockquote>\n

There might be another SEC attempt to destroy the public bond market<\/a>:<\/p>\n

The U.S. Securities and Exchange Commission should scrutinize corporate bond markets to determine if retail investors can find fair prices, said Commissioner Daniel Gallagher.<\/p>\n

Gallagher, a Republican on the five-member commission that regulates securities trading, called for the agency to look at the imbalance of information available to retail investors and institutional traders in a speech today at a financial-markets conference hosted by Georgetown University\u2019s McDonough School of Business in Washington.<\/p>\n

\u201cRetail investors continue to face significant headwinds in the bond markets,\u201d Gallagher said. \u201cUnlike their large institutional counterparts, retail investors generally have less expertise in the basics of bond trading and cannot tap into large dealer networks for quotes in order to shop around for the best prices available.\u201d<\/p>\n

Gallagher said the SEC issued a report this year on the state of the municipal securities market and should consider a similar effort with the corporate bond market, \u201cgiven how large and important that market has become.\u201d That doesn\u2019t necessarily mean more regulation, he said.<\/p><\/blockquote>\n

You know what regulators mean when they say a study won’t necessarily mean more regulation, don’t you? I don’t have to spell it out for you, do I?<\/p>\n

Westcoast Energy, proud issuer of W.PR.H and W.PR.J, has been confirmed by DBRS at Pfd-2(low)<\/a>:<\/p>\n

DBRS has today confirmed the Unsecured Debentures, First Preferred Shares and Commercial Paper ratings of Westcoast Energy Inc. (Westcoast or the Company) at A (low), Pfd-2 (low) and R-1 (low), respectively, all with Stable trends. The rating actions incorporate DBRS\u2019s expectation that Westcoast\u2019s significant capex program (projected to be $1.2 billion in 2012, including only $426 million spent through June 30, 2012, and likely to remain elevated in the medium term), will result in negative free cash flows and pressure its credit ratios, as incremental financing will likely come from increased long-term debt issuance.
…<\/b>
The Company\u2019s financial profile remains relatively strong despite rising capex related to its medium-term growth program. Increasing earnings and cash flow from expansions placed in service to date have resulted in relatively strong credit ratios. Westcoast should generate sufficient cash flow to meet a significant portion of its capex and dividend payments going forward, with manageable funding needs at both Union Gas Limited and the Company. Westcoast\u2019s consolidated credit metrics will likely continued to be pressured over the medium term as a result of its significant growth capex, although the metrics are underpinned by Westcoast\u2019s mostly low-risk and regulated operations and will likely remain within the parameters of the current ratings.<\/p><\/blockquote>\n

It was a good day for the Canadian preferred share market, with PerpetualPremiums and DeemedRetractibles gaining 9bp and FixedResets up 3bp. Volatility picked up a little. Volume was average.<\/p>\n

PerpetualDiscounts now yield 4.93%, equivalent to 6.41% interest at the standard equivalency factor of 1.3x. Long Corporates now yield about 4.4%, so the pre-tax interest-equivalent spread (in this context, the “Seniority Spread”) is now about 200bp, unchanged from the September 12<\/a> report.<\/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>\n0.3641 %<\/td>\n2,437.9<\/td>\n<\/tr>\n
FixedFloater<\/td>\n4.55 %<\/td>\n3.91 %<\/td>\n34,465<\/td>\n17.46<\/td>\n1<\/td>\n0.4808 %<\/td>\n3,502.4<\/td>\n<\/tr>\n
Floater<\/td>\n3.01 %<\/td>\n3.01 %<\/td>\n59,246<\/td>\n19.70<\/td>\n3<\/td>\n0.3641 %<\/td>\n2,632.3<\/td>\n<\/tr>\n
OpRet<\/td>\n4.68 %<\/td>\n3.37 %<\/td>\n56,458<\/td>\n1.47<\/td>\n4<\/td>\n-0.1348 %<\/td>\n2,541.6<\/td>\n<\/tr>\n
SplitShare<\/td>\n5.46 %<\/td>\n4.92 %<\/td>\n73,252<\/td>\n4.58<\/td>\n3<\/td>\n-0.0133 %<\/td>\n2,811.9<\/td>\n<\/tr>\n
Interest-Bearing<\/td>\n0.00 %<\/td>\n0.00 %<\/td>\n0<\/td>\n0.00<\/td>\n0<\/td>\n-0.1348 %<\/td>\n2,324.0<\/td>\n<\/tr>\n
Perpetual-Premium<\/td>\n5.28 %<\/td>\n2.96 %<\/td>\n89,330<\/td>\n1.03<\/td>\n28<\/td>\n0.0915 %<\/td>\n2,283.5<\/td>\n<\/tr>\n
Perpetual-Discount<\/td>\n4.95 %<\/td>\n4.93 %<\/td>\n97,804<\/td>\n15.64<\/td>\n3<\/td>\n0.1252 %<\/td>\n2,547.3<\/td>\n<\/tr>\n
FixedReset<\/td>\n4.96 %<\/td>\n3.13 %<\/td>\n173,287<\/td>\n4.27<\/td>\n72<\/td>\n0.0280 %<\/td>\n2,428.2<\/td>\n<\/tr>\n
Deemed-Retractible<\/td>\n4.95 %<\/td>\n3.40 %<\/td>\n120,329<\/td>\n1.07<\/td>\n46<\/td>\n0.0919 %<\/td>\n2,369.0<\/td>\n<\/tr>\n<\/table>\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
HSE.PR.A<\/td>\nFixedReset<\/td>\n-1.23 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2042-09-19
\nMaturity Price : 23.55
\nEvaluated at bid price : 25.80
\nBid-YTW : 3.12 %<\/td>\n<\/tr>\n
IAG.PR.A<\/td>\nDeemed-Retractible<\/td>\n-1.00 %<\/td>\nYTW SCENARIO
\nMaturity Type : Hard Maturity
\nMaturity Date\t: 2022-01-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 23.76
\nBid-YTW : 5.29 %<\/td>\n<\/tr>\n
TRP.PR.A<\/td>\nFixedReset<\/td>\n1.06 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2042-09-19
\nMaturity Price : 23.75
\nEvaluated at bid price : 25.70
\nBid-YTW : 3.27 %<\/td>\n<\/tr>\n
BAM.PR.Z<\/td>\nFixedReset<\/td>\n1.29 %<\/td>\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2017-12-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.93
\nBid-YTW : 4.01 %<\/td>\n<\/tr>\n
SLF.PR.C<\/td>\nDeemed-Retractible<\/td>\n1.30 %<\/td>\nYTW SCENARIO
\nMaturity Type : Hard Maturity
\nMaturity Date\t: 2022-01-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 23.30
\nBid-YTW : 5.40 %<\/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.N<\/td>\nFixedReset<\/td>\n115,030<\/td>\nTD crossed 50,000 at 26.42 and 25,000 at 26.40 and bought blocks of 10,000 and 15,000 from CIBC at 26.40.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2014-02-24
\nMaturity Price : 25.00
\nEvaluated at bid price : 26.40
\nBid-YTW : 2.57 %<\/td>\n<\/tr>\n
ENB.PR.P<\/td>\nFixedReset<\/td>\n86,060<\/td>\nRecent new issue<\/a>.
\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2042-09-19
\nMaturity Price : 23.08
\nEvaluated at bid price : 24.96
\nBid-YTW : 3.85 %<\/td>\n<\/tr>\n
PWF.PR.P<\/td>\nFixedReset<\/td>\n74,176<\/td>\nAnonymous crossed 50,000 at 25.20.
\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2042-09-19
\nMaturity Price : 23.38
\nEvaluated at bid price : 25.15
\nBid-YTW : 3.13 %<\/td>\n<\/tr>\n
MFC.PR.A<\/td>\nOpRet<\/td>\n67,347<\/td>\nDesjardins crossed 50,000 at 25.57.
\nYTW SCENARIO
\nMaturity Type : Soft Maturity
\nMaturity Date\t: 2015-12-18
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.57
\nBid-YTW : 3.37 %<\/td>\n<\/tr>\n
CU.PR.E<\/td>\nPerpetual-Premium<\/td>\n63,375<\/td>\nDesjardins crossed 32,900 at 26.04.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2021-09-01
\nMaturity Price : 25.00
\nEvaluated at bid price : 26.00
\nBid-YTW : 4.42 %<\/td>\n<\/tr>\n
MFC.PR.D<\/td>\nFixedReset<\/td>\n45,938<\/td>\nNesbitt crossed 33,000 at 26.64.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2014-06-19
\nMaturity Price : 25.00
\nEvaluated at bid price : 26.61
\nBid-YTW : 2.84 %<\/td>\n<\/tr>\n
There were 32 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
RY.PR.T<\/td>\nFixedReset<\/td>\nQuote: 26.87 – 27.59
\nSpot Rate : 0.7200
\nAverage : 0.4030<\/p>\n

YTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2014-08-24
\nMaturity Price : 25.00
\nEvaluated at bid price : 26.87
\nBid-YTW : 2.52 %<\/td>\n<\/tr>\n

BAM.PR.O<\/td>\nOpRet<\/td>\nQuote: 25.27 – 25.92
\nSpot Rate : 0.6500
\nAverage : 0.4045<\/p>\n

YTW SCENARIO
\nMaturity Type : Option Certainty
\nMaturity Date\t: 2013-06-30
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.27
\nBid-YTW : 3.43 %<\/td>\n<\/tr>\n

IAG.PR.A<\/td>\nDeemed-Retractible<\/td>\nQuote: 23.76 – 24.10
\nSpot Rate : 0.3400
\nAverage : 0.2475<\/p>\n

YTW SCENARIO
\nMaturity Type : Hard Maturity
\nMaturity Date\t: 2022-01-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 23.76
\nBid-YTW : 5.29 %<\/td>\n<\/tr>\n

FTS.PR.E<\/td>\nOpRet<\/td>\nQuote: 26.35 – 26.80
\nSpot Rate : 0.4500
\nAverage : 0.3592<\/p>\n

YTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2013-06-01
\nMaturity Price : 25.75
\nEvaluated at bid price : 26.35
\nBid-YTW : 1.76 %<\/td>\n<\/tr>\n

IAG.PR.G<\/td>\nFixedReset<\/td>\nQuote: 25.37 – 25.70
\nSpot Rate : 0.3300
\nAverage : 0.2506<\/p>\n

YTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2017-06-30
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.37
\nBid-YTW : 3.95 %<\/td>\n<\/tr>\n

RY.PR.L<\/td>\nFixedReset<\/td>\nQuote: 26.04 – 26.29
\nSpot Rate : 0.2500
\nAverage : 0.1741<\/p>\n

YTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2014-02-24
\nMaturity Price : 25.00
\nEvaluated at bid price : 26.04
\nBid-YTW : 2.91 %<\/td>\n<\/tr>\n<\/table>\n","protected":false},"excerpt":{"rendered":"

Inflation expectations can become self-fulfilling, which worries Richard Fisher: Federal Reserve Bank of Dallas President Richard Fisher said the central bank\u2019s third round of large-scale asset purchases has led to an increase in market expectations …<\/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-19785","post","type-post","status-publish","format-standard","hentry","category-market-action"],"_links":{"self":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/19785","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=19785"}],"version-history":[{"count":0,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/19785\/revisions"}],"wp:attachment":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=19785"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=19785"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=19785"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}