{"id":20909,"date":"2013-01-18T00:29:27","date_gmt":"2013-01-18T04:29:27","guid":{"rendered":"http:\/\/www.prefblog.com\/?p=20909"},"modified":"2013-01-18T00:29:27","modified_gmt":"2013-01-18T04:29:27","slug":"january-17-2013","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=20909","title":{"rendered":"January 17, 2013"},"content":{"rendered":"

AT&T got whacked for pension charges<\/a>:<\/p>\n

AT&T Inc. (T), the largest U.S. phone company, recording a $10 billion fourth-quarter charge for its pension plan and said smartphone subsidies put pressure on profit in the period.<\/p>\n

The company lowered its expected long-term rate of return for the pension to 7.75 percent, citing \u201ccontinued uncertainty\u201d for the stock market and the U.S. economy, according to a filing today.<\/p><\/blockquote>\n

According to the 2011 Annual Report<\/a>:<\/p>\n

Our return on assets assumption was 8.25% for the year ended December 31, 2011. In 2011, we experienced actual returns on investments lower than expected; however, in 2012 we will maintain 8.25% for our expected return on assets, based on long-term expectations of future market performance and the asset mix of the plans\u2019 investments.<\/p><\/blockquote>\n

Consider the plans’ asset mix, I’d say 7.75% is wildly optimistic:<\/p>\n\n\n\n\n\n\n\n\n\n\n\n
 <\/td>\nPension Assets<\/td>\nPostretirement (VEBA) Assets<\/td>\n<\/tr>\n
 <\/td>\nTarget<\/td>\n 2011<\/td>\n 2010<\/td>\n Target<\/td>\n 2011<\/td>\n 2010<\/td>\n<\/tr>\n
Equity securities:<\/b><\/td>\n<\/tr>\n
Domestic<\/td>\n 25% \u2013 35%<\/td>\n 24%<\/td>\n 29%<\/td>\n 34% \u2013 44%<\/td>\n 39%<\/td>\n 42%<\/td>\n<\/tr>\n
International<\/td>\n 10% \u2013 20%<\/td>\n 15<\/td>\n 15<\/td>\n 26% \u2013 36% <\/td>\n31<\/td>\n 34<\/td>\n<\/tr>\n
Fixed income securities<\/b><\/td>\n 30% \u2013 40%<\/td>\n 34<\/td>\n 34<\/td>\n 16% \u2013 26%<\/td>\n 21<\/td>\n 14<\/td>\n<\/tr>\n
Real assets<\/b><\/td>\n 6% \u2013 16%<\/td>\n 11<\/td>\n 9<\/td>\n 0% \u2013 6%<\/td>\n 1<\/td>\n 1<\/td>\n<\/tr>\n
Private equity<\/b><\/td>\n 4% \u2013 14%<\/td>\n 13<\/td>\n 12 0% \u2013 10%<\/td>\n 5<\/td>\n 4<\/td>\n<\/tr>\n
Other<\/b><\/td>\n 0% \u2013 5%<\/td>\n 3<\/td>\n 1<\/td>\n 0% \u2013 8%<\/td>\n 3<\/td>\n 5<\/td>\n<\/tr>\n
Total<\/td>\n 100%<\/b><\/td>\n <\/td>\n 100%<\/b><\/td>\n <\/td>\n<\/tr>\n<\/table>\n

However, they can proudly declare that they’re not as bad as Illinois<\/a>:<\/p>\n

Three brawling Illinois Democrats are presiding over a fiscal muck that has made the state the new archetype of dysfunction as longtime champion California last week projected its first surplus in a decade.<\/p>\n

Years of indecision, gridlock and mismanagement have produced a $97 billion pension-funding deficit and more than $9 billion in unpaid bills, saddling Illinois with the nation\u2019s lowest rating from Moody\u2019s Investors Service. As a result, taxpayers are paying more to borrow, and the state\u2019s ability to provide essential services is withering as annual retirement obligations devour more money.<\/p><\/blockquote>\n

It was another mixed day for the Canadian preferred share market, with PerpetualPremiums dropping 3bp, FixedResets up 7bp and DeemedRetractibles gaining 6bp. Volatility was low. Volume continued to be heavy.<\/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-0.1322 %<\/td>\n2,502.0<\/td>\n<\/tr>\n
FixedFloater<\/td>\n4.38 %<\/td>\n3.70 %<\/td>\n29,237<\/td>\n18.00<\/td>\n1<\/td>\n-0.6419 %<\/td>\n3,709.8<\/td>\n<\/tr>\n
Floater<\/td>\n2.78 %<\/td>\n3.00 %<\/td>\n60,970<\/td>\n19.73<\/td>\n4<\/td>\n-0.1322 %<\/td>\n2,701.5<\/td>\n<\/tr>\n
OpRet<\/td>\n4.63 %<\/td>\n0.73 %<\/td>\n53,298<\/td>\n0.37<\/td>\n4<\/td>\n0.0096 %<\/td>\n2,593.0<\/td>\n<\/tr>\n
SplitShare<\/td>\n4.58 %<\/td>\n4.50 %<\/td>\n44,705<\/td>\n4.32<\/td>\n2<\/td>\n0.1196 %<\/td>\n2,908.3<\/td>\n<\/tr>\n
Interest-Bearing<\/td>\n0.00 %<\/td>\n0.00 %<\/td>\n0<\/td>\n0.00<\/td>\n0<\/td>\n0.0096 %<\/td>\n2,371.1<\/td>\n<\/tr>\n
Perpetual-Premium<\/td>\n5.25 %<\/td>\n-0.54 %<\/td>\n76,006<\/td>\n0.12<\/td>\n30<\/td>\n-0.0303 %<\/td>\n2,345.7<\/td>\n<\/tr>\n
Perpetual-Discount<\/td>\n4.85 %<\/td>\n4.87 %<\/td>\n135,982<\/td>\n15.70<\/td>\n4<\/td>\n-0.1015 %<\/td>\n2,646.3<\/td>\n<\/tr>\n
FixedReset<\/td>\n4.91 %<\/td>\n2.83 %<\/td>\n222,340<\/td>\n3.64<\/td>\n78<\/td>\n0.0738 %<\/td>\n2,480.5<\/td>\n<\/tr>\n
Deemed-Retractible<\/td>\n4.87 %<\/td>\n1.61 %<\/td>\n117,943<\/td>\n0.34<\/td>\n45<\/td>\n0.0568 %<\/td>\n2,428.5<\/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
HSB.PR.D<\/td>\nDeemed-Retractible<\/td>\n1.10 %<\/td>\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2013-02-16
\nMaturity Price : 25.50
\nEvaluated at bid price : 25.85
\nBid-YTW : -8.74 %<\/td>\n<\/tr>\n
GWO.PR.N<\/td>\nFixedReset<\/td>\n1.20 %<\/td>\nYTW SCENARIO
\nMaturity Type : Hard Maturity
\nMaturity Date\t: 2022-01-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 23.68
\nBid-YTW : 3.80 %<\/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
NA.PR.Q<\/td>\nFixedReset<\/td>\n295,576<\/td>\nAdded to TXPR and TXPL<\/a>.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2017-11-15
\nMaturity Price : 25.00
\nEvaluated at bid price : 26.36
\nBid-YTW : 2.54 %<\/td>\n<\/tr>\n
ENB.PR.T<\/td>\nFixedReset<\/td>\n235,283<\/td>\nAdded to TXPR<\/a>.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2019-06-01
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.45
\nBid-YTW : 3.78 %<\/td>\n<\/tr>\n
GWO.PR.N<\/td>\nFixedReset<\/td>\n141,890<\/td>\nRBC crossed two blocks of 65,000 each, both at 23.60.
\nYTW SCENARIO
\nMaturity Type : Hard Maturity
\nMaturity Date\t: 2022-01-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 23.68
\nBid-YTW : 3.80 %<\/td>\n<\/tr>\n
BAM.PR.Z<\/td>\nFixedReset<\/td>\n108,812<\/td>\nDesjardins crossed 11,800 at 26.45. RBC crossed blocks of 44,700 and 44,600, both at 26.47.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2017-12-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 26.46
\nBid-YTW : 3.57 %<\/td>\n<\/tr>\n
RY.PR.X<\/td>\nFixedReset<\/td>\n70,216<\/td>\nScotia crossed blocks of 26,800 and 40,000, both at 26.89.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2014-08-24
\nMaturity Price : 25.00
\nEvaluated at bid price : 26.95
\nBid-YTW : 1.90 %<\/td>\n<\/tr>\n
MFC.PR.J<\/td>\nFixedReset<\/td>\n56,866<\/td>\nAdded to TXPR and TXPL<\/a>.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2018-03-19
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.80
\nBid-YTW : 3.44 %<\/td>\n<\/tr>\n
There were 57 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.G<\/td>\nFixedFloater<\/td>\nQuote: 21.67 – 22.31
\nSpot Rate : 0.6400
\nAverage : 0.4932<\/p>\n

YTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2043-01-17
\nMaturity Price : 22.31
\nEvaluated at bid price : 21.67
\nBid-YTW : 3.70 %<\/td>\n<\/tr>\n

PWF.PR.L<\/td>\nPerpetual-Premium<\/td>\nQuote: 25.51 – 26.10
\nSpot Rate : 0.5900
\nAverage : 0.4497<\/p>\n

YTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2014-10-31
\nMaturity Price : 25.25
\nEvaluated at bid price : 25.51
\nBid-YTW : 4.37 %<\/td>\n<\/tr>\n

VNR.PR.A<\/td>\nFixedReset<\/td>\nQuote: 26.10 – 26.40
\nSpot Rate : 0.3000
\nAverage : 0.2269<\/p>\n

YTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2017-10-15
\nMaturity Price : 25.00
\nEvaluated at bid price : 26.10
\nBid-YTW : 3.37 %<\/td>\n<\/tr>\n

FTS.PR.E<\/td>\nOpRet<\/td>\nQuote: 26.70 – 26.95
\nSpot Rate : 0.2500
\nAverage : 0.1792<\/p>\n

YTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2013-06-01
\nMaturity Price : 25.75
\nEvaluated at bid price : 26.70
\nBid-YTW : -3.42 %<\/td>\n<\/tr>\n

ELF.PR.F<\/td>\nPerpetual-Premium<\/td>\nQuote: 25.37 – 25.60
\nSpot Rate : 0.2300
\nAverage : 0.1689<\/p>\n

YTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2013-02-16
\nMaturity Price : 25.25
\nEvaluated at bid price : 25.37
\nBid-YTW : -0.54 %<\/td>\n<\/tr>\n

IGM.PR.B<\/td>\nPerpetual-Premium<\/td>\nQuote: 26.75 – 26.96
\nSpot Rate : 0.2100
\nAverage : 0.1607<\/p>\n

YTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2014-12-31
\nMaturity Price : 26.00
\nEvaluated at bid price : 26.75
\nBid-YTW : 4.04 %<\/td>\n<\/tr>\n<\/table>\n","protected":false},"excerpt":{"rendered":"

AT&T got whacked for pension charges: AT&T Inc. (T), the largest U.S. phone company, recording a $10 billion fourth-quarter charge for its pension plan and said smartphone subsidies put pressure on profit in the period. …<\/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-20909","post","type-post","status-publish","format-standard","hentry","category-market-action"],"_links":{"self":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/20909","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=20909"}],"version-history":[{"count":0,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/20909\/revisions"}],"wp:attachment":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=20909"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=20909"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=20909"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}