{"id":22631,"date":"2013-07-30T22:49:02","date_gmt":"2013-07-31T02:49:02","guid":{"rendered":"http:\/\/www.prefblog.com\/?p=22631"},"modified":"2013-07-30T22:49:02","modified_gmt":"2013-07-31T02:49:02","slug":"july-30-2013","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=22631","title":{"rendered":"July 30, 2013"},"content":{"rendered":"

The Fabulous Fab trial<\/a> goes to jury today:<\/p>\n

A win by the SEC may demonstrate the agency has the will and resources to win cases at trial, strengthening its hand in future negotiations with Wall Street institutions and their employees.<\/p>\n

A loss, following a defeat last year in a trial against Brian Stoker, the former head of Citigroup Inc.\u2019s CDO structuring group, would be the second high-profile trial loss in cases tied to the 2008 financial meltdown, in the Manhattan federal courthouse just blocks from Wall Street.<\/p>\n

\u201cAt the end of the day, this was a tremendous build-up for what amounts to a minor case involving a midlevel player whose personality essentially became the case,\u201d said Jacob Frenkel, a former SEC lawyer not involved in the Tourre case. \u201cWhat we\u2019re seeing so far is that the government\u2019s best shot at Goldman was a low-level figure.\u201d<\/p>\n

The decision not to call any additional witnesses \u201chighlights the level of confidence the defense has in its case,\u201d Frenkel said.<\/p><\/blockquote>\n

In other fallout from the Credit Crunch, Barclays has come out with a massive rights deal<\/a>:<\/p>\n

Barclays Plc (BARC), the U.K.\u2019s second-largest bank by assets, plans to raise 5.8 billion pounds ($8.9 billion) in a rights offering to bolster capital as it booked its biggest charge to date for customer compensation.<\/p>\n

nvestors will be able to buy one new share for every four they already own for 185 pence, 40 percent less than yesterday\u2019s closing price, London-based Barclays said in a statement today. It will also shrink assets by as much as 80 billion pounds to 1.5 trillion pounds and sell 2 billion pounds of loss-absorbing securities to meet calls by the regulator to cut leverage.<\/p>\n

Chief Executive Officer Antony Jenkins, 52, is selling more shares than the 4 billion pounds analysts had anticipated after the lender\u2019s capital shortfall swelled to 12.8 billion pounds at the end of June under the stricter Basel III rules on bank capital. The Prudential Regulation Authority is imposing a 3 percent leverage ratio, forcing banks to hold 3 pounds of equity for every 100 pounds of assets to make the financial system safer. Barclays had sought to plug the deficit by using contingent convertible bonds and retaining earnings.
…<\/b>
Barclays was one of only two British lenders to miss the regulator\u2019s leverage target in June, with only 2.5 percent. Nationwide Building Society, which at 2 percent also failed, was given until the end of 2015 to make up the shortfall.<\/p>\n

Barclays said that under the full Basel III rules its ratio was only 2.2 percent at the end of June. The ratio declined after the latest version of the Basel rules added 85 billion pounds of leverage exposure, the lender said. Part of the 12.8 billion-pound gap comes from a PRA calculation of future bad loan losses and potential redress for customers, which reduces capital by 4.1 billion pounds, Barclays said.<\/p><\/blockquote>\n

Deutsche Bank followed<\/a>:<\/p>\n

Deutsche Bank AG (DBK), continental Europe\u2019s biggest bank, said it will shrink its balance sheet by 250 billion euros ($332 billion), joining Barclays Plc (BARC) and UBS AG (UBSN) in seeking to comply with stricter capital rules.<\/p>\n

Deutsche Bank will reduce leverage by changing the way it accounts for derivatives and by winding down a 73 billion-euro portfolio of assets, Chief Financial Officer Stefan Krause told investors on a conference call today. Krause announced the plan after the bank said net income slid 49 percent to 334 million euros, missing the average 767.6 million-euro estimate of nine analysts.<\/p><\/blockquote>\n

Meanwhile, UBS provides some insight as to why scaremongers talk about “downgrades” rather than “defaults”<\/a>:<\/p>\n

UBS needed state aid after the bankruptcy of Lehman Brothers Holdings Inc. in 2008 froze financial markets and the Swiss bank\u2019s mistimed bet on the U.S. housing market resulted in more than $57 billion in writedowns and losses during the subprime crisis.<\/p>\n

The company spun off $38.7 billion of risky assets into the Swiss National Bank fund, while the government provided 6 billion francs ($6.4 billion) of equity and the SNB made a loan to support the assets as they were being run down. The Swiss government sold its investment in UBS less than a year later for a profit of 1.2 billion francs.<\/p>\n

As part of the rescue, UBS was granted an option to buy back the equity of the fund once the SNB loan was repaid. Under that arrangement, UBS would pay the central bank $1 billion plus 50 percent of the value of equity exceeding that level — amounting to about $3.25 billion based on values at the end of last year.<\/p><\/blockquote>\n

REITs are the key to a lot of deals<\/a>. Does this tell you anything?<\/p>\n

The high likelihood that Hudson\u2019s Bay will spin off its real estate portfolio into a real estate investment trust (REIT) \u2013 seen by many as not only a means to cash in on the ample high-value real estate it would acquire in the Saks deal, but also a source of funds to reduce the debt burden \u2013 is also, paradoxically, a dilemma for Moody\u2019s.
…<\/b>
Still, the REIT looks like the key to solving Hudson\u2019s Bay\u2019s debt puzzle. Mr. Caicco estimates that Hudson\u2019s Bay could hand nearly $1.6-billion of its debt over to the REIT, along with the assets associated with it. There, the debt would be supported by nearly $3.8-billion in properties across Hudson\u2019s Bay, Saks and Lord & Taylor\u2019s holdings.<\/p>\n

This is why the market needs to hear the REIT plan. Without it, an awful lot of debt questions remain unanswered.<\/p><\/blockquote>\n

More trouble for Canaccord<\/a>?<\/p>\n

Aggarwal, 40, of Gurgaon, India, was arrested yesterday by agents of the Federal Bureau of Investigation in San Jose, California, as part of the U.S. government\u2019s six-year crackdown on insider trading at hedge funds, said Peter Donald, an FBI spokesman in New York.<\/p>\n

Manhattan U.S. Attorney Preet Bharara\u2019s office said Aggarwal is charged with one count of conspiracy to commit securities fraud and one count of conspiracy to commit wire fraud for passing along an inside tip about a pending deal between Yahoo! Inc. (YHOO) and Microsoft Corp. (MSFT)<\/p>\n

\u201cSandeep Aggarwal leveraged his contacts in the technology industry to obtain an illegal edge in the form of inside information about a highly anticipated development, then lied about his criminal conduct,\u201d Bharara said in a statement.<\/p>\n

Aggarwal formerly worked at Collins Stewart LLC in San Francisco, said a person familiar with the situation, who requested anonymity because the matter wasn\u2019t public. Andrea Sergautis, a spokeswoman for Canaccord Genuity in Toronto, which acquired Collins Stewart, didn\u2019t return a call seeking comment on Aggarwal\u2019s case.<\/p>\n

Aggarwal provided material nonpublic information about a strategic partnership in Internet search and advertising between Microsoft and Yahoo to two different hedge funds, including SAC, the U.S. alleged in a criminal complaint unsealed today.<\/p><\/blockquote>\n

It was a mixed day for the Canadian preferred share market, with PerpetualDiscounts off 1bp, FixedResets up 10bp and DeemedRetractibles gaining 8bp. There was again a surprisingly lengthy Performance Highlights table. Volume was above 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>\n-0.5876 %<\/td>\n2,601.0<\/td>\n<\/tr>\n
FixedFloater<\/td>\n4.10 %<\/td>\n3.40 %<\/td>\n34,837<\/td>\n18.58<\/td>\n1<\/td>\n0.0000 %<\/td>\n4,046.5<\/td>\n<\/tr>\n
Floater<\/td>\n2.70 %<\/td>\n2.87 %<\/td>\n85,020<\/td>\n20.05<\/td>\n4<\/td>\n-0.5876 %<\/td>\n2,808.4<\/td>\n<\/tr>\n
OpRet<\/td>\n4.59 %<\/td>\n1.87 %<\/td>\n85,736<\/td>\n0.08<\/td>\n3<\/td>\n0.1532 %<\/td>\n2,628.5<\/td>\n<\/tr>\n
SplitShare<\/td>\n4.70 %<\/td>\n4.85 %<\/td>\n61,197<\/td>\n4.16<\/td>\n6<\/td>\n0.3011 %<\/td>\n2,950.2<\/td>\n<\/tr>\n
Interest-Bearing<\/td>\n0.00 %<\/td>\n0.00 %<\/td>\n0<\/td>\n0.00<\/td>\n0<\/td>\n0.1532 %<\/td>\n2,403.5<\/td>\n<\/tr>\n
Perpetual-Premium<\/td>\n5.62 %<\/td>\n4.67 %<\/td>\n105,726<\/td>\n0.09<\/td>\n12<\/td>\n-0.0166 %<\/td>\n2,285.2<\/td>\n<\/tr>\n
Perpetual-Discount<\/td>\n5.38 %<\/td>\n5.45 %<\/td>\n138,621<\/td>\n14.71<\/td>\n26<\/td>\n-0.0122 %<\/td>\n2,392.8<\/td>\n<\/tr>\n
FixedReset<\/td>\n4.99 %<\/td>\n3.66 %<\/td>\n233,811<\/td>\n3.96<\/td>\n84<\/td>\n0.0973 %<\/td>\n2,466.8<\/td>\n<\/tr>\n
Deemed-Retractible<\/td>\n5.09 %<\/td>\n4.65 %<\/td>\n197,274<\/td>\n6.84<\/td>\n43<\/td>\n0.0835 %<\/td>\n2,374.8<\/td>\n<\/tr>\n<\/table>\n\n\n\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
MFC.PR.F<\/td>\nFixedReset<\/td>\n-1.42 %<\/td>\nYTW SCENARIO
\nMaturity Type : Hard Maturity
\nMaturity Date\t: 2025-01-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 23.56
\nBid-YTW : 4.15 %<\/td>\n<\/tr>\n
BAM.PR.K<\/td>\nFloater<\/td>\n-1.20 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2043-07-30
\nMaturity Price : 18.06
\nEvaluated at bid price : 18.06
\nBid-YTW : 2.92 %<\/td>\n<\/tr>\n
BAM.PR.C<\/td>\nFloater<\/td>\n-1.20 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2043-07-30
\nMaturity Price : 18.16
\nEvaluated at bid price : 18.16
\nBid-YTW : 2.91 %<\/td>\n<\/tr>\n
GWO.PR.N<\/td>\nFixedReset<\/td>\n-1.18 %<\/td>\nYTW SCENARIO
\nMaturity Type : Hard Maturity
\nMaturity Date\t: 2025-01-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 23.52
\nBid-YTW : 3.89 %<\/td>\n<\/tr>\n
SLF.PR.H<\/td>\nFixedReset<\/td>\n-1.04 %<\/td>\nYTW SCENARIO
\nMaturity Type : Hard Maturity
\nMaturity Date\t: 2025-01-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 24.64
\nBid-YTW : 4.12 %<\/td>\n<\/tr>\n
POW.PR.D<\/td>\nPerpetual-Discount<\/td>\n1.03 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2043-07-30
\nMaturity Price : 23.17
\nEvaluated at bid price : 23.43
\nBid-YTW : 5.37 %<\/td>\n<\/tr>\n
BAM.PF.D<\/td>\nPerpetual-Discount<\/td>\n1.46 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2043-07-30
\nMaturity Price : 22.54
\nEvaluated at bid price : 22.86
\nBid-YTW : 5.42 %<\/td>\n<\/tr>\n
BAM.PR.N<\/td>\nPerpetual-Discount<\/td>\n1.67 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2043-07-30
\nMaturity Price : 21.86
\nEvaluated at bid price : 21.86
\nBid-YTW : 5.50 %<\/td>\n<\/tr>\n
BAM.PR.X<\/td>\nFixedReset<\/td>\n1.95 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2043-07-30
\nMaturity Price : 22.65
\nEvaluated at bid price : 23.55
\nBid-YTW : 3.95 %<\/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
BNS.PR.L<\/td>\nDeemed-Retractible<\/td>\n67,381<\/td>\nNational crossed 47,400 at 25.00.
\nYTW SCENARIO
\nMaturity Type : Hard Maturity
\nMaturity Date\t: 2022-01-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 24.93
\nBid-YTW : 4.56 %<\/td>\n<\/tr>\n
BNS.PR.A<\/td>\nFixedReset<\/td>\n66,120<\/td>\nNational crossed blocks of 49,100 and 10,400, both at 26.25.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2013-08-29
\nMaturity Price : 25.50
\nEvaluated at bid price : 26.10
\nBid-YTW : -26.40 %<\/td>\n<\/tr>\n
CM.PR.D<\/td>\nPerpetual-Premium<\/td>\n59,972<\/td>\nNesbitt crossed 40,000 at 25.16.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2013-08-29
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.15
\nBid-YTW : -1.54 %<\/td>\n<\/tr>\n
BMO.PR.M<\/td>\nFixedReset<\/td>\n57,130<\/td>\nWill reset to 3.39% coupon<\/a>.
\nYTW SCENARIO
\nMaturity Type : Hard Maturity
\nMaturity Date\t: 2022-01-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 24.70
\nBid-YTW : 3.57 %<\/td>\n<\/tr>\n
CM.PR.G<\/td>\nPerpetual-Premium<\/td>\n52,000<\/td>\nNesbitt crossed 42,300 at 25.07.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2014-05-01
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.03
\nBid-YTW : 5.27 %<\/td>\n<\/tr>\n
BMO.PR.L<\/td>\nDeemed-Retractible<\/td>\n39,304<\/td>\nNesbitt crossed 35,000 at 26.10.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2013-08-29
\nMaturity Price : 26.00
\nEvaluated at bid price : 26.04
\nBid-YTW : -1.12 %<\/td>\n<\/tr>\n
There were 39 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
MFC.PR.F<\/td>\nFixedReset<\/td>\nQuote: 23.56 – 24.49
\nSpot Rate : 0.9300
\nAverage : 0.7145<\/p>\n

YTW SCENARIO
\nMaturity Type : Hard Maturity
\nMaturity Date\t: 2025-01-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 23.56
\nBid-YTW : 4.15 %<\/td>\n<\/tr>\n

FTS.PR.G<\/td>\nFixedReset<\/td>\nQuote: 24.10 – 24.55
\nSpot Rate : 0.4500
\nAverage : 0.3213<\/p>\n

YTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2043-07-30
\nMaturity Price : 22.81
\nEvaluated at bid price : 24.10
\nBid-YTW : 3.98 %<\/td>\n<\/tr>\n

BNA.PR.E<\/td>\nSplitShare<\/td>\nQuote: 25.20 – 25.55
\nSpot Rate : 0.3500
\nAverage : 0.2294<\/p>\n

YTW SCENARIO
\nMaturity Type : Hard Maturity
\nMaturity Date\t: 2017-12-10
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.20
\nBid-YTW : 4.85 %<\/td>\n<\/tr>\n

BAM.PF.D<\/td>\nPerpetual-Discount<\/td>\nQuote: 22.86 – 23.15
\nSpot Rate : 0.2900
\nAverage : 0.1873<\/p>\n

YTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2043-07-30
\nMaturity Price : 22.54
\nEvaluated at bid price : 22.86
\nBid-YTW : 5.42 %<\/td>\n<\/tr>\n

TD.PR.C<\/td>\nFixedReset<\/td>\nQuote: 25.26 – 25.50
\nSpot Rate : 0.2400
\nAverage : 0.1538<\/p>\n

YTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2014-01-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.26
\nBid-YTW : 3.48 %<\/td>\n<\/tr>\n

ELF.PR.H<\/td>\nPerpetual-Premium<\/td>\nQuote: 24.47 – 24.84
\nSpot Rate : 0.3700
\nAverage : 0.2840<\/p>\n

YTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2043-07-30
\nMaturity Price : 24.08
\nEvaluated at bid price : 24.47
\nBid-YTW : 5.65 %<\/td>\n<\/tr>\n<\/table>\n","protected":false},"excerpt":{"rendered":"

The Fabulous Fab trial goes to jury today: A win by the SEC may demonstrate the agency has the will and resources to win cases at trial, strengthening its hand in future negotiations with Wall …<\/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-22631","post","type-post","status-publish","format-standard","hentry","category-market-action"],"_links":{"self":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/22631","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=22631"}],"version-history":[{"count":0,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/22631\/revisions"}],"wp:attachment":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=22631"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=22631"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=22631"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}