{"id":2341,"date":"2008-07-03T22:33:06","date_gmt":"2008-07-04T02:33:06","guid":{"rendered":"http:\/\/www.prefblog.com\/?p=2341"},"modified":"2008-07-03T22:33:06","modified_gmt":"2008-07-04T02:33:06","slug":"july-3-2008","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=2341","title":{"rendered":"July 3, 2008"},"content":{"rendered":"

The Penn National Gaming takeover has failed<\/a>:<\/p>\n

Penn National Gaming Inc. said Fortress Investment Group LLC and Centerbridge Partners LP scrapped their $6.1 billion plan to buy the racetrack and casino company as the credit markets collapsed.<\/p>\n

Penn is the largest leveraged buyout agreement, including debt, to fall apart since J.C. Flowers & Co. backed out of an accord last year to purchase SLM Corp., also known as Sallie Mae, for $25.3 billion.
…<\/b>
Penn said it will receive $225 million to terminate the takeover and a $1.25 billion interest-free loan.<\/p>\n

“This transaction represents the company’s best alternative to the uncertainty of litigation,” Penn said.<\/p><\/blockquote>\n

And today I received an eMail from a reader gazing with lust in his eyes at the BCE issues! Said it before, I’ll say it again: BCE prefs are a speculation on the success of the Teachers’ deal. They are only a fixed income investment by courtesy, at this point.<\/p>\n

Further, I noted yesterday<\/a> that the US TruPS market was being hit by a CDO buyers’ strike. This could also, indirectly, make financing the BCE LBO more difficult<\/a>:<\/p>\n

Defaults on leveraged-buyout loans may rise as firms struggle to refinance about $500 billion of debt used to fund the takeovers, the Bank for International Settlements said.<\/p>\n

Companies bought by private-equity firms worldwide must repay the high-risk, high-yield loans and bonds by 2010, the Basel, Switzerland-based bank said in a report today, citing Fitch Ratings data. They may find it hard to raise the cash because of a slump in demand for collateralized debt obligations that pool the loans, BIS said.<\/p>\n

Investors are shunning structured debt instruments such as CDOs, the main buyers of leveraged loans, after the credit-market seizure caused by the U.S. subprime mortgage collapse, the BIS said. The ability of LBO firms to refinance may be crimped further as banks tighten lending criteria after reporting $402 billion of credit losses and asset writedowns.<\/p><\/blockquote>\n

The BIS report, Private Equity and Leveraged Finance Markets<\/a>, is available online.<\/p>\n

BIS has also published a report on the rating of structured finance: Ratings in Structured Finance: What Went Wrong and What Can Be Done to Address Shortcomings?<\/a> which has been briefly discussed on PrefBlog<\/a>.<\/p>\n

In news that is certain to inflame the Internuts, the Fed has announced<\/a>:<\/p>\n

The Federal Reserve said the portfolio of Bear Stearns Cos. assets it accepted as part of the firm’s takeover by JPMorgan Chase & Co. is now worth $28.9 billion, down from the $30 billion estimated in March.<\/p>\n

The central bank cut the “fair value” of the assets by 3.7 percent as of June 26, the Fed said today in Washington. The Fed loaned $28.8 billion last week to a company it formed to purchase the investments, which as of mid-March included debt backed by mortgages and other items JPMorgan deemed too risky to take on.<\/p>\n

The Fed gave the fair-value estimate of Maiden Lane LLC’s holdings as part of its weekly report on its balance sheet today.<\/p><\/blockquote>\n

Details are posted with the July 3 H.4.1 Release<\/a>.<\/p>\n

Yet another thoroughly appalling day in what has become (as far as I can tell) a self-feeding panic. Today’s pre-tax bid-YTW of 6.14% is equivalent to 8.60% interest (at a conversion factor of 1.4x), which is now 250bp over long corporates. And it’s not too hard to get that 6.14% average from a big-name bank, either!<\/p>\n

On the bright side, that 250bp represents a 10-year high<\/a> and the previous high was very short-lived. We shall see!<\/p>\n

\n\n\n\n\n\n\n\n\n\n\n\n
Note that these indices are experimental; the absolute and relative daily values are expected to change in the final version. In this version, index values are based at 1,000.0 on 2006-6-30<\/strong><\/td>\n<\/tr>\n
Index<\/td>\nMean Current Yield (at bid)<\/td>\nMean YTW<\/td>\nMean Average Trading Value<\/td>\nMean Mod Dur (YTW)<\/td>\nIssues<\/td>\nDay’s Perf.<\/td>\nIndex Value<\/td>\n<\/tr>\n
Ratchet<\/td>\n4.27%<\/td>\n2.40%<\/td>\n45,221<\/td>\n0.08<\/td>\n1<\/td>\n0.1180%<\/td>\n1,119.7<\/td>\n<\/tr>\n
Fixed-Floater<\/td>\n5.01%<\/td>\n4.82%<\/td>\n65,307<\/td>\n15.86<\/td>\n6<\/td>\n-0.3459%<\/td>\n1,013.1<\/td>\n<\/tr>\n
Floater<\/td>\n4.12%<\/td>\n4.13%<\/td>\n51,841<\/td>\n17.18<\/td>\n3<\/td>\n-1.1900%<\/td>\n893.6<\/td>\n<\/tr>\n
Op. Retract<\/td>\n4.93%<\/td>\n3.05%<\/td>\n181,615<\/td>\n2.52<\/td>\n17<\/td>\n-0.1824%<\/td>\n1,050.9<\/td>\n<\/tr>\n
Split-Share<\/td>\n5.31%<\/td>\n5.94%<\/td>\n65,987<\/td>\n4.17<\/td>\n14<\/td>\n+0.2282%<\/td>\n1,040.6<\/td>\n<\/tr>\n
Interest Bearing<\/td>\n6.13%<\/td>\n4.22%<\/td>\n45,510<\/td>\n2.00<\/td>\n3<\/td>\n-0.2003%<\/td>\n1,123.1<\/td>\n<\/tr>\n
Perpetual-Premium<\/td>\n5.95%<\/td>\n5.87%<\/td>\n63,877<\/td>\n8.31<\/td>\n4<\/td>\n-0.0200%<\/td>\n1,008.2<\/td>\n<\/tr>\n
Perpetual-Discount<\/td>\n6.08%<\/td>\n6.14%<\/td>\n251,633<\/td>\n13.70<\/td>\n67<\/td>\n-0.6762%<\/td>\n866.0<\/td>\n<\/tr>\n<\/table>\n<\/div>\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Major Price Changes<\/strong><\/td>\n<\/tr>\n
Issue<\/td>\nIndex<\/td>\nChange<\/td>\nNotes<\/td>\n<\/tr>\n
IAG.PR.A<\/td>\nPerpetualDiscount<\/td>\n-3.3283%<\/td>\nNow with a pre-tax bid-YTW of 6.05% based on a bid of 19.17 and a limitMaturity<\/a>.<\/td>\n<\/tr>\n
BAM.PR.K<\/td>\nFloater<\/td>\n-3.0890%<\/td>\nClosed at 18.51-20.19, 2×5 on volume of 420 shares.<\/td>\n<\/tr>\n
SLF.PR.E<\/td>\nPerpetualDiscount<\/td>\n-2.6480%<\/td>\nNow with a pre-tax bid-YTW of 6.05% based on a bid of 18.75 and a limitMaturity.<\/td>\n<\/tr>\n
CM.PR.E<\/td>\nPerpetualDiscount<\/td>\n-2.3077%<\/td>\nNow with a pre-tax bid-YTW of 6.50% based on a bid of 21.59 and a limitMaturity.<\/td>\n<\/tr>\n
BCE.PR.R<\/td>\nFixFloat<\/td>\n-2.2589%<\/td>\n <\/td>\n<\/tr>\n
CIU.PR.A<\/td>\nPerpetualDiscount<\/td>\n-2.2500%<\/td>\nNow with a pre-tax bid-YTW of 5.96% based on a bid of 19.55 and a limitMaturity.<\/td>\n<\/tr>\n
GWO.PR.I<\/td>\nPerpetualDiscount<\/td>\n-2.1855%<\/td>\nNow with a pre-tax bid-YTW of 6.18% based on a bid of 18.35 and a limitMaturity.<\/td>\n<\/tr>\n
CM.PR.G<\/td>\nPerpetualDiscount<\/td>\n-2.1257%<\/td>\nNow with a pre-tax bid-YTW of 6.53% based on a bid of 20.72 and a limitMaturity.<\/td>\n<\/tr>\n
CM.PR.I<\/td>\nPerpetualDiscount<\/td>\n-2.0274%<\/td>\nNow with a pre-tax bid-YTW of 6.59% based on a bid of 17.88 and a limitMaturity.<\/td>\n<\/tr>\n
RY.PR.C<\/td>\nPerpetualDiscount<\/td>\n-1.9072%<\/td>\nNow with a pre-tax bid-YTW of 6.14% based on a bid of 19.03 and a limitMaturity.<\/td>\n<\/tr>\n
NA.PR.L<\/td>\nPerpetualDiscount<\/td>\n-1.9000%<\/td>\nNow with a pre-tax bid-YTW of 6.29% based on a bid of 19.62 and a limitMaturity.<\/td>\n<\/tr>\n
GWO.PR.G<\/td>\nPerpetualDiscount<\/td>\n-1.8957%<\/td>\nNow with a pre-tax bid-YTW of 6.33% based on a bid of 20.70 and a limitMaturity.<\/td>\n<\/tr>\n
RY.PR.F<\/td>\nPerpetualDiscount<\/td>\n-1.8767%<\/td>\nNow with a pre-tax bid-YTW of 6.18% based on a bid of 18.30 and a limitMaturity.<\/td>\n<\/tr>\n
BNS.PR.M<\/td>\nPerpetualDiscount<\/td>\n-1.6940%<\/td>\nNow with a pre-tax bid-YTW of 6.07% based on a bid of 18.57 and a limitMaturity.<\/td>\n<\/tr>\n
ELF.PR.F<\/td>\nPerpetualDiscount<\/td>\n-1.5960%<\/td>\nNow with a pre-tax bid-YTW of 6.75% based on a bid of 19.73 and a limitMaturity.<\/td>\n<\/tr>\n
RY.PR.A<\/td>\nPerpetualDiscount<\/td>\n-1.5957%<\/td>\nNow with a pre-tax bid-YTW of 6.11% based on a bid of 18.50 and a limitMaturity.<\/td>\n<\/tr>\n
BNS.PR.L<\/td>\nPerpetualDiscount<\/td>\n-1.5320%<\/td>\nNow with a pre-tax bid-YTW of 6.05% based on a bid of 18.64 and a limitMaturity.<\/td>\n<\/tr>\n
BCE.PR.I<\/td>\nFixFloat<\/td>\n-1.3015%<\/td>\n <\/td>\n<\/tr>\n
BAM.PR.J<\/td>\nOpRet<\/td>\n-1.2858%<\/td>\nNow with a pre-tax bid-YTW of 6.11% based on a bid of 23.80 and a softMaturity<\/a> 2018-3-30 at 25.00. Compare with BAM.PR.H (5.21% to 2012-3-30), BAM.PR.I (5.55% to 2013-12-30) and BAM.PR.O (6.40% to 2013-6-30).<\/td>\n<\/tr>\n
RY.PR.E<\/td>\nPerpetualDiscount<\/td>\n-1.2732%<\/td>\nNow with a pre-tax bid-YTW of 6.14% based on a bid of 18.61 and a limitMaturity.<\/td>\n<\/tr>\n
PWF.PR.F<\/td>\nPerpetualDiscount<\/td>\n-1.2483%<\/td>\nNow with a pre-tax bid-YTW of 6.27% based on a bid of 21.36 and a limitMaturity.<\/td>\n<\/tr>\n
BNS.PR.N<\/td>\nPerpetualDiscount<\/td>\n-1.1852%<\/td>\nNow with a pre-tax bid-YTW of 5.84% based on a bid of 22.51 and a limitMaturity.<\/td>\n<\/tr>\n
RY.PR.G<\/td>\nPerpetualDiscount<\/td>\n-1.0667%<\/td>\nNow with a pre-tax bid-YTW of 6.16% based on a bid of 18.55 and a limitMaturity.<\/td>\n<\/tr>\n
RY.PR.B<\/td>\nPerpetualDiscount<\/td>\n-1.0633%<\/td>\nNow with a pre-tax bid-YTW of 6.11% based on a bid of 19.54 and a limitMaturity.<\/td>\n<\/tr>\n
BNS.PR.J<\/td>\nPerpetualDiscount<\/td>\n-1.0132%<\/td>\nNow with a pre-tax bid-YTW of 5.82% based on a bid of 22.47 and a limitMaturity. 29bp through the Royals?<\/td>\n<\/tr>\n
BNA.PR.C<\/td>\nSplitShare<\/td>\n+1.2821%<\/td>\nAsset coverage of just under 3.6:1 as of May 30 according to the company<\/a>. Now with a pre-tax bid-YTW of 7.33% based on a bid of 19.75 and a hardMaturity 2019-1-10 at 25.00. Compare with BNA.PR.A (6.03% to 2010-9-30) and BNA.PR.B (8.25% to 2016-3-25).<\/td>\n<\/tr>\n
BNA.PR.B<\/td>\nSplitShare<\/td>\n+1.8877%<\/td>\nSee above.<\/td>\n<\/tr>\n
POW.PR.D<\/td>\nPerpetualDiscount<\/td>\n+2.2495%<\/td>\nNow with a pre-tax bid-YTW of 6.28% based on a bid of 20.00 and a limitMaturity.<\/td>\n<\/tr>\n<\/table>\n<\/div>\n
\n\n\n\n\n\n\n\n\n
Volume Highlights<\/strong><\/td>\n<\/tr>\n
Issue<\/td>\nIndex<\/td>\nVolume<\/td>\nNotes<\/td>\n<\/tr>\n
BNS.PR.K<\/td>\nPerpetualDiscount<\/td>\n390,050<\/td>\nDesjardins crossed 68,500 at 21.00, then Nesbitt crossed 309,200 in three tranches at 20.90. Now with a pre-tax bid-YTW of 5.77% based on a bid of 20.84 and a limitMaturity.<\/td>\n<\/tr>\n
TD.PR.P<\/td>\nPerpetualDiscount<\/td>\n87,943<\/td>\nNational Bank crossed 82,000 at 23.10. Now with a pre-tax bid-YTW of 5.79% based on a bid of 23.06 and a limitMaturity.<\/td>\n<\/tr>\n
BMO.PR.K<\/td>\nPerpetualDiscount<\/td>\n55,830<\/td>\nNesbitt crossed 50,000 at 21.80. Now with a pre-tax bid-YTW of 6.12% based on a bid of 21.75 and a limitMaturity.<\/td>\n<\/tr>\n
CM.PR.I<\/td>\nPerpetualDiscount<\/td>\n39,375<\/td>\nNow with a pre-tax bid-YTW of 6.59% based on a bid of 17.88 and a limitMaturity.<\/td>\n<\/tr>\n
RY.PR.E<\/td>\nPerpetualDiscount<\/td>\n34,300<\/td>\nNesbitt crossed 30,000 at 18.70. Now with a pre-tax bid-YTW of 6.14% based on a bid of 18.61 and a limitMaturity.<\/td>\n<\/tr>\n<\/table>\n<\/div>\n

There were nineteen other index-included $25-pv-equivalent issues trading over 10,000 shares today.<\/p>\n","protected":false},"excerpt":{"rendered":"

The Penn National Gaming takeover has failed: Penn National Gaming Inc. said Fortress Investment Group LLC and Centerbridge Partners LP scrapped their $6.1 billion plan to buy the racetrack and casino company as the credit …<\/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-2341","post","type-post","status-publish","format-standard","hentry","category-market-action"],"_links":{"self":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/2341","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=2341"}],"version-history":[{"count":0,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/2341\/revisions"}],"wp:attachment":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=2341"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=2341"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=2341"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}