{"id":25007,"date":"2014-04-17T23:28:15","date_gmt":"2014-04-18T04:28:15","guid":{"rendered":"http:\/\/prefblog.com\/?p=25007"},"modified":"2014-04-17T23:28:15","modified_gmt":"2014-04-18T04:28:15","slug":"april-17-2014","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=25007","title":{"rendered":"April 17, 2014"},"content":{"rendered":"

The Globe ran a piece on an upcoming insurance pow-wow in Toronto<\/a>:<\/p>\n

\u201cThe irony of the way insurance works, as opposed to the way banking works, is that it\u2019s not always clear that capital is the relevant solution,\u201d he said. \u201cIt\u2019s often not, because insurance companies get into trouble in different ways.\u201d<\/p>\n

For example, insurance companies wouldn\u2019t experience a \u2018run\u2019 on deposits, Mr. McGavick said, when reserves may not be able to cover mass customer withdrawals in the same way a bank would.<\/p><\/blockquote>\n

This seems like an odd remark to me, because while bank runs may be rooted in capital problems, they are made possible by liquidity problems – this is the old illiquid vs. insolvent distinction that I frequently mentioned during the Credit Crunch and which is well illustrated by the Panic of 1907<\/a>.<\/p>\n

Anyway, the Geneva Association produced an analysis titled Variable Annuities \u2014 An Analysis of Financial Stability<\/a>, which references (among other things):<\/p>\n

Key Financial Stability Issues in Insurance, released in July 2010, comprises analytical work carried out on specific issues that had been raised by regulatory and supervisory counterparts in areas such as investment management, liquidity management, limits of insurability, crisis resolution mechanisms in insurance and the confused concept of an \u201cinsurance run\u201d (supposedly akin to a bank run).<\/p><\/blockquote>\n

and Key Financial Stability Issues in Insurance<\/a>, which is quite interesting, but which the dorks have copy-protected so I can’t copy-paste the good parts.<\/p>\n

Capital is virtually irrelevant during a bank run (although loss of capital might trigger the run); capital is actually more important in the insurance game. While it is quite true that Segregated Fund owners can’t take their money and run – eliminating much of the need for liquidity – a lack of capital will have severe effects on the viability of the operation – as Manulife very nearly found out during the crisis.<\/p>\n

DGS.PR.A was confirmed at Pfd-3 by DBRS<\/a>:<\/p>\n

The net asset value (NAV) of the Company has increased steadily since the last rating confirmation in April 2013. As of April 3, 2014, the downside protection available to the Preferred Shares is approximately 46.9% and the dividend coverage ratio is approximately 1.1 times. The Pfd-3 rating of the Preferred Shares is based primarily on the downside protection available and the additional protection provided by an asset coverage test, which does not permit any distributions to holders of the Class A Shares if the NAV of the Company falls below $15.<\/p><\/blockquote>\n

It was a good day for the Canadian preferred share market, with PerpetualDiscounts winning 16bp, FixedResets gaining 3bp and DeemedRetractibles up 13bp. Volatility was minimal. Volume … was peculiar. Very little breadth, but quite a lot of depth! A very high proportion of the volume leaders have been called for redemption.<\/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>\n0.1875 %<\/td>\n2,407.4<\/td>\n<\/tr>\n
FixedFloater<\/td>\n4.70 %<\/td>\n4.24 %<\/td>\n32,743<\/td>\n17.96<\/td>\n1<\/td>\n-0.2465 %<\/td>\n3,656.4<\/td>\n<\/tr>\n
Floater<\/td>\n3.02 %<\/td>\n3.15 %<\/td>\n50,422<\/td>\n19.38<\/td>\n4<\/td>\n0.1875 %<\/td>\n2,599.3<\/td>\n<\/tr>\n
OpRet<\/td>\n4.36 %<\/td>\n-4.39 %<\/td>\n36,175<\/td>\n0.12<\/td>\n2<\/td>\n-0.0388 %<\/td>\n2,693.2<\/td>\n<\/tr>\n
SplitShare<\/td>\n4.81 %<\/td>\n4.38 %<\/td>\n60,411<\/td>\n4.24<\/td>\n5<\/td>\n-0.1112 %<\/td>\n3,083.7<\/td>\n<\/tr>\n
Interest-Bearing<\/td>\n0.00 %<\/td>\n0.00 %<\/td>\n0<\/td>\n0.00<\/td>\n0<\/td>\n-0.0388 %<\/td>\n2,462.6<\/td>\n<\/tr>\n
Perpetual-Premium<\/td>\n5.55 %<\/td>\n-6.02 %<\/td>\n107,298<\/td>\n0.09<\/td>\n13<\/td>\n0.0272 %<\/td>\n2,384.9<\/td>\n<\/tr>\n
Perpetual-Discount<\/td>\n5.41 %<\/td>\n5.39 %<\/td>\n115,531<\/td>\n14.65<\/td>\n23<\/td>\n0.1591 %<\/td>\n2,488.7<\/td>\n<\/tr>\n
FixedReset<\/td>\n4.68 %<\/td>\n3.64 %<\/td>\n195,270<\/td>\n4.34<\/td>\n79<\/td>\n0.0347 %<\/td>\n2,530.7<\/td>\n<\/tr>\n
Deemed-Retractible<\/td>\n5.02 %<\/td>\n-0.54 %<\/td>\n146,596<\/td>\n0.16<\/td>\n42<\/td>\n0.1331 %<\/td>\n2,495.2<\/td>\n<\/tr>\n
FloatingReset<\/td>\n2.64 %<\/td>\n2.41 %<\/td>\n182,485<\/td>\n4.26<\/td>\n5<\/td>\n0.0159 %<\/td>\n2,481.7<\/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
MFC.PR.F<\/td>\nFixedReset<\/td>\n1.23 %<\/td>\nYTW SCENARIO
\nMaturity Type : Hard Maturity
\nMaturity Date\t: 2025-01-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 23.10
\nBid-YTW : 4.25 %<\/td>\n<\/tr>\n<\/table>\n\n\n\n\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
TD.PR.G<\/td>\nFixedReset<\/td>\n338,738<\/td>\nCalled for Redemption<\/a>.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2014-05-30
\nMaturity Price : 25.00
\nEvaluated at bid price : 24.97
\nBid-YTW : 5.44 %<\/td>\n<\/tr>\n
BNS.PR.T<\/td>\nFixedReset<\/td>\n315,839<\/td>\nCalled for redemption<\/a>.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2014-05-25
\nMaturity Price : 25.00
\nEvaluated at bid price : 24.98
\nBid-YTW : 4.93 %<\/td>\n<\/tr>\n
CM.PR.L<\/td>\nFixedReset<\/td>\n244,798<\/td>\nCalled for redemption<\/a>.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2014-05-30
\nMaturity Price : 25.00
\nEvaluated at bid price : 24.98
\nBid-YTW : 5.27 %<\/td>\n<\/tr>\n
TRP.PR.E<\/td>\nFixedReset<\/td>\n223,516<\/td>\nDesjardins crossed blocks of 23,900 and 50,800, both at 25.42. TD crossed 40,000 and RBC crossed 100,000, all at the same price.
\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2044-04-17
\nMaturity Price : 23.26
\nEvaluated at bid price : 25.41
\nBid-YTW : 3.86 %<\/td>\n<\/tr>\n
ENB.PF.A<\/td>\nFixedReset<\/td>\n182,613<\/td>\nNesbitt crossed 30,00 at 25.37. TD bought 25,000 from anonymous and crossed blocks of 77,000 and 13,500, all at the same price.
\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2044-04-17
\nMaturity Price : 23.24
\nEvaluated at bid price : 25.36
\nBid-YTW : 4.18 %<\/td>\n<\/tr>\n
FTS.PR.E<\/td>\nOpRet<\/td>\n177,950<\/td>\nNesbitt crossed 175,000 at 25.95.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2014-06-01
\nMaturity Price : 25.50
\nEvaluated at bid price : 25.95
\nBid-YTW : -4.39 %<\/td>\n<\/tr>\n
NA.PR.S<\/td>\nFixedReset<\/td>\n172,080<\/td>\nRBC crossed blocks of 100,000 and 30,000, both at 25.43. TD crossed 40,000 at the same price.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2019-05-15
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.43
\nBid-YTW : 3.67 %<\/td>\n<\/tr>\n
TD.PR.E<\/td>\nFixedReset<\/td>\n155,319<\/td>\nCalled for redemption<\/a>.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2014-05-30
\nMaturity Price : 25.00
\nEvaluated at bid price : 24.98
\nBid-YTW : 5.09 %<\/td>\n<\/tr>\n
MFC.PR.L<\/td>\nFixedReset<\/td>\n142,354<\/td>\nRBC crossed 120,900 at 24.85.
\nYTW SCENARIO
\nMaturity Type : Hard Maturity
\nMaturity Date\t: 2025-01-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 24.85
\nBid-YTW : 4.01 %<\/td>\n<\/tr>\n
RY.PR.I<\/td>\nFixedReset<\/td>\n114,223<\/td>\nScotia crossed 50,000 at 25.60. RBC crossed 50,000 at the same price.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2019-02-24
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.60
\nBid-YTW : 3.11 %<\/td>\n<\/tr>\n
VNR.PR.A<\/td>\nFixedReset<\/td>\n111,594<\/td>\nRBC crossed 100,500 at 25.37; Scotia crossed 10,000 at the same price.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2017-10-15
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.36
\nBid-YTW : 3.93 %<\/td>\n<\/tr>\n
ELF.PR.H<\/td>\nPerpetual-Discount<\/td>\n102,208<\/td>\nRBC crossed 100,000 at 24.50.
\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2044-04-17
\nMaturity Price : 24.01
\nEvaluated at bid price : 24.41
\nBid-YTW : 5.65 %<\/td>\n<\/tr>\n
There were 17 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
CIU.PR.C<\/td>\nFixedReset<\/td>\nQuote: 20.82 – 21.32
\nSpot Rate : 0.5000
\nAverage : 0.3521<\/p>\n

YTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2044-04-17
\nMaturity Price : 20.82
\nEvaluated at bid price : 20.82
\nBid-YTW : 3.76 %<\/td>\n<\/tr>\n

POW.PR.B<\/td>\nPerpetual-Discount<\/td>\nQuote: 24.32 – 24.67
\nSpot Rate : 0.3500
\nAverage : 0.2323<\/p>\n

YTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2044-04-17
\nMaturity Price : 24.06
\nEvaluated at bid price : 24.32
\nBid-YTW : 5.53 %<\/td>\n<\/tr>\n

PWF.PR.P<\/td>\nFixedReset<\/td>\nQuote: 23.89 – 24.22
\nSpot Rate : 0.3300
\nAverage : 0.2261<\/p>\n

YTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2044-04-17
\nMaturity Price : 23.53
\nEvaluated at bid price : 23.89
\nBid-YTW : 3.50 %<\/td>\n<\/tr>\n

CGI.PR.D<\/td>\nSplitShare<\/td>\nQuote: 24.77 – 25.08
\nSpot Rate : 0.3100
\nAverage : 0.2096<\/p>\n

YTW SCENARIO
\nMaturity Type : Soft Maturity
\nMaturity Date\t: 2023-06-14
\nMaturity Price : 25.00
\nEvaluated at bid price : 24.77
\nBid-YTW : 3.93 %<\/td>\n<\/tr>\n

ENB.PR.H<\/td>\nFixedReset<\/td>\nQuote: 23.64 – 23.97
\nSpot Rate : 0.3300
\nAverage : 0.2445<\/p>\n

YTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2044-04-17
\nMaturity Price : 22.65
\nEvaluated at bid price : 23.64
\nBid-YTW : 4.02 %<\/td>\n<\/tr>\n

POW.PR.D<\/td>\nPerpetual-Discount<\/td>\nQuote: 23.27 – 23.58
\nSpot Rate : 0.3100
\nAverage : 0.2320<\/p>\n

YTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2044-04-17
\nMaturity Price : 23.01
\nEvaluated at bid price : 23.27
\nBid-YTW : 5.39 %<\/td>\n<\/tr>\n<\/table>\n","protected":false},"excerpt":{"rendered":"

The Globe ran a piece on an upcoming insurance pow-wow in Toronto: \u201cThe irony of the way insurance works, as opposed to the way banking works, is that it\u2019s not always clear that capital is …<\/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-25007","post","type-post","status-publish","format-standard","hentry","category-market-action"],"_links":{"self":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/25007","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=25007"}],"version-history":[{"count":0,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/25007\/revisions"}],"wp:attachment":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=25007"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=25007"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=25007"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}