{"id":24435,"date":"2014-02-13T00:59:23","date_gmt":"2014-02-13T05:59:23","guid":{"rendered":"http:\/\/prefblog.com\/?p=24435"},"modified":"2014-02-13T00:59:23","modified_gmt":"2014-02-13T05:59:23","slug":"february-12-2014","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=24435","title":{"rendered":"February 12, 2014"},"content":{"rendered":"

DBRS commented on the Federal budget<\/a>:<\/p>\n

As anticipated at the time of DBRS\u2019s last review, Canada\u2019s debt burden appears to have reached an inflection point and reducing debt remains a long-term goal of the government. Gross market debt (the measure tracked by DBRS) is projected to fall by 3.1% to $647 billion by March 31, 2014, resulting in a debt-to-GDP ratio of roughly 35%, down from 37% a year earlier. For 2014-15, market debt is expected to remain relatively flat, pointing to a debt-to-GDP ratio of 34%. Total borrowing requirements are forecast at $232 billion in 2014-2015, comprised almost entirely of refinancing needs. The government plans to continue to reduce refinancing risk by replacing maturing treasury bills with longer-term bonds, which should lengthen the average term to maturity of the debt portfolio. In addition, the issuance of 50-year bonds is being contemplated, after having considered 40-year issuance in the previous budget.<\/p><\/blockquote>\n

… but there were also some cogent words from Konrad Yakabuski of the Globe<\/a>:<\/p>\n

Hence, Mr. Flaherty\u2019s latest, and perhaps last, budget includes another $500-million for Ottawa\u2019s so-called Automotive Innovation Fund, increasing the total to $1-billion. The funds are supposed to be doled out in \u201crepayable contributions to automotive firms that are undertaking strategic large-scale research and development projects focused on new vehicle technologies.\u201d<\/p>\n

Don\u2019t be fooled. About as much R&D goes on in Canada\u2019s auto sector as in my kitchen. The AIF is a slush fund used to subsidize the wages of auto workers whose \u201cquality,\u201d according to a 2012 study by the Institute for Research on Public Policy<\/a>, has \u201cnot proven to be an important factor in productivity growth in motor-vehicle assembly over the past 45 years.\u201d Yet, Chrysler reportedly wants up to $700-million from Ottawa and Ontario to assemble a \u201cnew generation\u201d of minivans in Windsor.
…<\/b>
According to the IRPP study by economists Leslie Shiell of the University of Ottawa and Robin Somerville of the Centre for Spatial Economics, the rescues cost Canadian taxpayers more than $500,000 for every job saved.<\/p><\/blockquote>\n

At least there’s a little good news for granny<\/a>:<\/p>\n

Canadian banks are slashing the trading fees charged by their online investing platforms, a sudden about-face after years of ignoring intense competition from independent rivals with cheaper prices.<\/p>\n

In the past month, Royal Bank of Canada, Toronto-Dominion Bank and Bank of Montreal each cut their discount brokerage prices. Now any of their clients, regardless of their portfolio size, can buy or sell a stock for $9.95 to $9.99 \u2013 a low fee historically reserved for clients with tens of thousands of dollars to invest.<\/p><\/blockquote>\n

It was a mixed day for the Canadian preferred share market, with PerpetualDiscounts down 22bp, FixedResets gaining 6bp and DeemedRetractibles flat. Volatility was minimal. Several issues saw heavy volume, but overall it was a light trading day.<\/p>\n

PerpetualDiscounts now yield 5.61%, equivalent to 7.29% interest at the standard equivalency factor of 1.3x. Long corporates<\/a> now yield about 4.6%, so the pre-tax interest-equivalent spread (in this context, the “Seniority Spread”) is now about 270bp, a slight (and perhaps spurious) narrowing from the 275bp reported February 5<\/a>.<\/p>\n\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>\n0.8723 %<\/td>\n2,391.3<\/td>\n<\/tr>\n
FixedFloater<\/td>\n4.74 %<\/td>\n4.33 %<\/td>\n27,587<\/td>\n17.76<\/td>\n1<\/td>\n-0.1993 %<\/td>\n3,578.1<\/td>\n<\/tr>\n
Floater<\/td>\n3.03 %<\/td>\n3.13 %<\/td>\n53,373<\/td>\n19.37<\/td>\n4<\/td>\n0.8723 %<\/td>\n2,582.0<\/td>\n<\/tr>\n
OpRet<\/td>\n4.61 %<\/td>\n-3.11 %<\/td>\n71,673<\/td>\n0.13<\/td>\n3<\/td>\n0.1614 %<\/td>\n2,687.8<\/td>\n<\/tr>\n
SplitShare<\/td>\n4.87 %<\/td>\n5.07 %<\/td>\n61,744<\/td>\n4.34<\/td>\n5<\/td>\n-0.0322 %<\/td>\n3,011.8<\/td>\n<\/tr>\n
Interest-Bearing<\/td>\n0.00 %<\/td>\n0.00 %<\/td>\n0<\/td>\n0.00<\/td>\n0<\/td>\n0.1614 %<\/td>\n2,457.7<\/td>\n<\/tr>\n
Perpetual-Premium<\/td>\n5.67 %<\/td>\n1.41 %<\/td>\n96,322<\/td>\n0.08<\/td>\n12<\/td>\n-0.0945 %<\/td>\n2,333.9<\/td>\n<\/tr>\n
Perpetual-Discount<\/td>\n5.56 %<\/td>\n5.61 %<\/td>\n151,125<\/td>\n14.46<\/td>\n26<\/td>\n-0.2229 %<\/td>\n2,386.8<\/td>\n<\/tr>\n
FixedReset<\/td>\n4.91 %<\/td>\n3.72 %<\/td>\n212,474<\/td>\n6.24<\/td>\n82<\/td>\n0.0598 %<\/td>\n2,486.2<\/td>\n<\/tr>\n
Deemed-Retractible<\/td>\n5.12 %<\/td>\n4.06 %<\/td>\n162,985<\/td>\n1.94<\/td>\n42<\/td>\n0.0029 %<\/td>\n2,421.8<\/td>\n<\/tr>\n
FloatingReset<\/td>\n2.65 %<\/td>\n2.61 %<\/td>\n166,636<\/td>\n7.12<\/td>\n6<\/td>\n-0.0335 %<\/td>\n2,442.4<\/td>\n<\/tr>\n<\/table>\n\n\n\n\n
Performance Highlights<\/strong><\/td>\n<\/tr>\n
Issue<\/td>\nIndex<\/td>\nChange<\/td>\nNotes<\/td>\n<\/tr>\n
ELF.PR.F<\/td>\nPerpetual-Discount<\/td>\n-1.25 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2044-02-12
\nMaturity Price : 22.67
\nEvaluated at bid price : 22.91
\nBid-YTW : 5.84 %<\/td>\n<\/tr>\n<\/table>\n\n\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
SLF.PR.F<\/td>\nFixedReset<\/td>\n300,600<\/td>\nTD crossed 300,000 at 25.51.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2014-06-30
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.51
\nBid-YTW : 2.46 %<\/td>\n<\/tr>\n
FTS.PR.H<\/td>\nFixedReset<\/td>\n222,567<\/td>\nDesjardins crossed 210,700 at 20.90, I think – there’s a cancellation listed, but no replacement.
\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2044-02-12
\nMaturity Price : 20.93
\nEvaluated at bid price : 20.93
\nBid-YTW : 3.73 %<\/td>\n<\/tr>\n
FTS.PR.F<\/td>\nPerpetual-Discount<\/td>\n220,100<\/td>\nDesjardins crossed 216,500 at 23.00.
\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2044-02-12
\nMaturity Price : 22.59
\nEvaluated at bid price : 22.87
\nBid-YTW : 5.36 %<\/td>\n<\/tr>\n
FTS.PR.J<\/td>\nPerpetual-Discount<\/td>\n194,890<\/td>\nDesjardins crossed 188,900 at 22.30.
\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2044-02-12
\nMaturity Price : 21.85
\nEvaluated at bid price : 22.17
\nBid-YTW : 5.35 %<\/td>\n<\/tr>\n
BAM.PR.P<\/td>\nFixedReset<\/td>\n112,210<\/td>\nScotia crossed 54,800 at 25.88. TD crossed 50,000 at the same price.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2014-09-30
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.80
\nBid-YTW : 3.20 %<\/td>\n<\/tr>\n
NA.PR.S<\/td>\nFixedReset<\/td>\n109,246<\/td>\nRecent new issue<\/a>.
\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2044-02-12
\nMaturity Price : 23.14
\nEvaluated at bid price : 24.97
\nBid-YTW : 3.92 %<\/td>\n<\/tr>\n
PWF.PR.H<\/td>\nPerpetual-Premium<\/td>\n103,638<\/td>\nNesbitt crossed two blocks of 50,000 each, both at 25.15.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2014-03-14
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.13
\nBid-YTW : 1.52 %<\/td>\n<\/tr>\n
GWO.PR.F<\/td>\nDeemed-Retractible<\/td>\n102,004<\/td>\nTD crossed 94,500 at 25.55.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2014-03-14
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.41
\nBid-YTW : -5.46 %<\/td>\n<\/tr>\n
There were 22 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
ELF.PR.F<\/td>\nPerpetual-Discount<\/td>\nQuote: 22.91 – 23.31
\nSpot Rate : 0.4000
\nAverage : 0.3021<\/p>\n

YTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2044-02-12
\nMaturity Price : 22.67
\nEvaluated at bid price : 22.91
\nBid-YTW : 5.84 %<\/td>\n<\/tr>\n

PWF.PR.P<\/td>\nFixedReset<\/td>\nQuote: 22.99 – 23.27
\nSpot Rate : 0.2800
\nAverage : 0.1987<\/p>\n

YTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2044-02-12
\nMaturity Price : 22.66
\nEvaluated at bid price : 22.99
\nBid-YTW : 3.60 %<\/td>\n<\/tr>\n

FTS.PR.F<\/td>\nPerpetual-Discount<\/td>\nQuote: 22.87 – 23.14
\nSpot Rate : 0.2700
\nAverage : 0.1980<\/p>\n

YTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2044-02-12
\nMaturity Price : 22.59
\nEvaluated at bid price : 22.87
\nBid-YTW : 5.36 %<\/td>\n<\/tr>\n

HSB.PR.C<\/td>\nDeemed-Retractible<\/td>\nQuote: 25.25 – 25.53
\nSpot Rate : 0.2800
\nAverage : 0.2083<\/p>\n

YTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2014-06-30
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.25
\nBid-YTW : 4.06 %<\/td>\n<\/tr>\n

FTS.PR.K<\/td>\nFixedReset<\/td>\nQuote: 24.40 – 24.65
\nSpot Rate : 0.2500
\nAverage : 0.1797<\/p>\n

YTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2044-02-12
\nMaturity Price : 22.94
\nEvaluated at bid price : 24.40
\nBid-YTW : 3.72 %<\/td>\n<\/tr>\n

TRP.PR.C<\/td>\nFixedReset<\/td>\nQuote: 22.12 – 22.33
\nSpot Rate : 0.2100
\nAverage : 0.1418<\/p>\n

YTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2044-02-12
\nMaturity Price : 21.68
\nEvaluated at bid price : 22.12
\nBid-YTW : 3.67 %<\/td>\n<\/tr>\n<\/table>\n","protected":false},"excerpt":{"rendered":"

DBRS commented on the Federal budget: As anticipated at the time of DBRS\u2019s last review, Canada\u2019s debt burden appears to have reached an inflection point and reducing debt remains a long-term goal of the government. …<\/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-24435","post","type-post","status-publish","format-standard","hentry","category-market-action"],"_links":{"self":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/24435","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=24435"}],"version-history":[{"count":0,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/24435\/revisions"}],"wp:attachment":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=24435"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=24435"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=24435"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}