{"id":25786,"date":"2014-07-10T23:00:15","date_gmt":"2014-07-11T04:00:15","guid":{"rendered":"http:\/\/prefblog.com\/?p=25786"},"modified":"2014-07-10T23:00:15","modified_gmt":"2014-07-11T04:00:15","slug":"july-10-2014","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=25786","title":{"rendered":"July 10, 2014"},"content":{"rendered":"

Looks like Canadian shadow banking is picking up<\/a>:<\/p>\n

Canada\u2019s banks developed their commercial banking arms over decades by lending to companies that typically generate annual revenue of $50-million or less, nurturing scores of client relationships. Since the financial crisis, however, private equity firms have been scooping up smaller companies, shaking up their historical banking relationships.
…<\/b>
Anatol von Hahn, Bank of Nova Scotia\u2019s head of personal and commercial banking, said he would be \u201cbe very surprised if we don\u2019t have double, triple\u201d the number of small Canadian companies that are owned by private equity firms twenty years from now. Because they are flush with cash that they simply can\u2019t sit on, private equity firms are often willing to pay big multiples to buy small businesses. \u201cThey\u2019re playing a huge role,\u201d he said.
…<\/b>
To adapt to the changing dynamics, Scotiabank has gone so far as to invest in certain private equity funds in order to get access to the companies they acquire, according to Mr. von Hahn, allowing the bank to pitch itself as a potential banking partner.<\/p>\n

The trend isn\u2019t playing out in Canada alone. U.S. firms are looking for mid-market acquisitions north of the border. In May, New Jersey-based private equity player Swander Pace Capital acquired Montreal\u2019s Recochem, marking its 10th acquisition north of the border in the past decade. More acquisitions could come because the firm recently raised a brand new $350-million fund.<\/p><\/blockquote>\n

Could we be heading towards European banking crisis redux<\/a>?<\/p>\n

Shares in Banco Esp\u00edrito Santo SA … were suspended from trading Thursday after falling an additional 17%. Shares of the lender’s controlling shareholder, Esp\u00edrito Santo Financial Group SA, were also suspended because, it said, of “ongoing material difficulties” at its parent company, Esp\u00edrito Santo International. “ESFG is currently assessing the financial impact of its exposure to ESI.”<\/p>\n

A spokesman for Esp\u00edrito Santo International declined to comment.<\/p>\n

This week’s downward spiral has knocked 32% off the bank’s market value and has dragged down Portugal’s main stock index with it.<\/p>\n

On Thursday, the turmoil spread elsewhere in Southern Europe, illustrating how investors remain nervous about the fragility of the continent’s financial system. In Spain, a bank and a construction company each called off planned bond sales. In Italy, a drug company pulled its stock offering. In Greece, a government-bond sale came in smaller than expected. And stock markets across the continent fell, along with the euro.
…<\/b>
It has been more than a year since fears about the health of a European bank rattled markets. Lately, after years of crisis, investors, bankers and regulators have been growing more confident about the stability of the continent’s financial system. Regulators hoped the banking industry’s improving health would be on display in coming months as they conduct so-called stress tests on more than 120 large banks.<\/p>\n

Instead, Esp\u00edrito Santo’s rapid descent, and the collateral damage in other European markets, suggests that conditions remain precarious.<\/p>\n

Critics of Esp\u00edrito Santo’s complex corporate structure have worried for years about the linkages among companies within the conglomerate. Among the concerns: whether the group’s nonfinancial companies\u2014including a hotel chain and a hospital operator\u2014were using the bank and its customers to raise funds.<\/p><\/blockquote>\n

Here in Ontario, our wise masters are protecting us from lower prices<\/a>:<\/p>\n

Ontario\u2019s governing Liberals say they want to remove barriers to interprovincial trade, but suggest they\u2019re reluctant to lift some restrictions that give Ontario companies an advantage.<\/p>\n

Finance Minister Charles Sousa says there are a number of sectors within Ontario\u2019s economy that are strong because they\u2019re protected.<\/p>\n

Sousa says he\u2019s open to talks on how to grow the economy, but he doesn\u2019t want to jeopardize the livelihood of Ontario companies.
…<\/b>
Sousa\u2019s comments come after the leaders of three western provinces called for the removal of trade barriers to reduce the cost of doing business and help provincial economies grow.<\/p><\/blockquote>\n

As far as I can tell, Mr. Sousa did not explain why strong companies need protection.<\/p>\n

It was a mixed day for the Canadian preferred share market, with PerpetualDiscounts down 4bp, FixedResets gaining 14bp and DeemedRetractibles off 3bp. Volatility was average, but uniformly positive. Volume was below average overall, and concentrated in a handful of issues.<\/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>\n3.14 %<\/td>\n3.13 %<\/td>\n22,179<\/td>\n19.40<\/td>\n1<\/td>\n0.0000 %<\/td>\n2,531.9<\/td>\n<\/tr>\n
FixedFloater<\/td>\n4.15 %<\/td>\n3.43 %<\/td>\n28,342<\/td>\n18.45<\/td>\n1<\/td>\n-0.2179 %<\/td>\n4,138.9<\/td>\n<\/tr>\n
Floater<\/td>\n2.87 %<\/td>\n2.95 %<\/td>\n46,425<\/td>\n19.86<\/td>\n4<\/td>\n0.1367 %<\/td>\n2,760.5<\/td>\n<\/tr>\n
OpRet<\/td>\n4.02 %<\/td>\n-5.05 %<\/td>\n86,525<\/td>\n0.08<\/td>\n1<\/td>\n0.0785 %<\/td>\n2,720.0<\/td>\n<\/tr>\n
SplitShare<\/td>\n4.26 %<\/td>\n3.99 %<\/td>\n54,773<\/td>\n4.05<\/td>\n6<\/td>\n-0.0333 %<\/td>\n3,115.1<\/td>\n<\/tr>\n
Interest-Bearing<\/td>\n0.00 %<\/td>\n0.00 %<\/td>\n0<\/td>\n0.00<\/td>\n0<\/td>\n0.0785 %<\/td>\n2,487.2<\/td>\n<\/tr>\n
Perpetual-Premium<\/td>\n5.53 %<\/td>\n-4.30 %<\/td>\n85,467<\/td>\n0.09<\/td>\n17<\/td>\n0.0417 %<\/td>\n2,425.6<\/td>\n<\/tr>\n
Perpetual-Discount<\/td>\n5.25 %<\/td>\n5.18 %<\/td>\n110,158<\/td>\n15.23<\/td>\n20<\/td>\n-0.0449 %<\/td>\n2,571.2<\/td>\n<\/tr>\n
FixedReset<\/td>\n4.39 %<\/td>\n3.59 %<\/td>\n200,106<\/td>\n4.61<\/td>\n76<\/td>\n0.1436 %<\/td>\n2,562.2<\/td>\n<\/tr>\n
Deemed-Retractible<\/td>\n4.98 %<\/td>\n1.94 %<\/td>\n131,236<\/td>\n0.12<\/td>\n43<\/td>\n-0.0278 %<\/td>\n2,547.2<\/td>\n<\/tr>\n
FloatingReset<\/td>\n2.66 %<\/td>\n2.15 %<\/td>\n109,597<\/td>\n3.89<\/td>\n6<\/td>\n-0.0723 %<\/td>\n2,514.5<\/td>\n<\/tr>\n<\/table>\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
CU.PR.C<\/td>\nFixedReset<\/td>\n1.13 %<\/td>\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2017-06-01
\nMaturity Price : 25.00
\nEvaluated at bid price : 26.05
\nBid-YTW : 2.65 %<\/td>\n<\/tr>\n
RY.PR.L<\/td>\nFixedReset<\/td>\n1.33 %<\/td>\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2019-02-24
\nMaturity Price : 25.00
\nEvaluated at bid price : 26.76
\nBid-YTW : 2.77 %<\/td>\n<\/tr>\n
CIU.PR.C<\/td>\nFixedReset<\/td>\n1.35 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2044-07-10
\nMaturity Price : 22.24
\nEvaluated at bid price : 22.55
\nBid-YTW : 3.38 %<\/td>\n<\/tr>\n
BAM.PR.C<\/td>\nFloater<\/td>\n1.42 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2044-07-10
\nMaturity Price : 17.85
\nEvaluated at bid price : 17.85
\nBid-YTW : 2.95 %<\/td>\n<\/tr>\n<\/table>\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.PF.A<\/td>\nFixedReset<\/td>\n318,878<\/td>\nNesbitt crossed 100,000 at 25.50. TD crossed blocks of 14,700 and 84,900 at the same price. Desjardins crossed 100,000 at the same price again.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2019-10-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.51
\nBid-YTW : 3.57 %<\/td>\n<\/tr>\n
BMO.PR.T<\/td>\nFixedReset<\/td>\n212,720<\/td>\nNesbitt crossed two blocks of 50,000 each, both at 25.45. Scotia crossed blocks of 32,000 and 50,000 at the same price.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2019-08-25
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.45
\nBid-YTW : 3.61 %<\/td>\n<\/tr>\n
BMO.PR.S<\/td>\nFixedReset<\/td>\n192,599<\/td>\nRBC crossed blocks of 10,000 and 11,600 at 25.60. TD crossed 25,000 at 25.70. Nesbitt crossed blocks of 50,000 and 69,300, both at 25.70.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2019-05-25
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.73
\nBid-YTW : 3.55 %<\/td>\n<\/tr>\n
CM.PR.M<\/td>\nFixedReset<\/td>\n184,573<\/td>\nCalled for redemption July 31<\/a>.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2014-08-30
\nMaturity Price : 25.00
\nEvaluated at bid price : 24.97
\nBid-YTW : 4.86 %<\/td>\n<\/tr>\n
CM.PR.K<\/td>\nFixedReset<\/td>\n181,858<\/td>\nCalled for redemption July 31<\/a>.
\nYTW SCENARIO
\nMaturity Type : Hard Maturity
\nMaturity Date\t: 2022-01-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 24.98
\nBid-YTW : 3.79 %<\/td>\n<\/tr>\n
CM.PR.O<\/td>\nFixedReset<\/td>\n176,412<\/td>\nRecent new issue<\/a>.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2019-07-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.51
\nBid-YTW : 3.55 %<\/td>\n<\/tr>\n
TD.PR.K<\/td>\nFixedReset<\/td>\n144,299<\/td>\nCalled for redemption July 31.<\/a>.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2014-08-30
\nMaturity Price : 25.00
\nEvaluated at bid price : 24.98
\nBid-YTW : 4.29 %<\/td>\n<\/tr>\n
NA.PR.S<\/td>\nFixedReset<\/td>\n135,592<\/td>\nScotia crossed blocks of 35,400 and 25,000, both at 25.56. National sold 28,400 to anonymous at 25.60. TD crossed 24,700 at 25.60.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2019-05-15
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.62
\nBid-YTW : 3.46 %<\/td>\n<\/tr>\n
RY.PR.H<\/td>\nFixedReset<\/td>\n126,715<\/td>\nDesjardins crossed 26,500 at 25.50 and blocks of 25,000 and 15,000 at 25.55. Scotia crossed 30,000 at 25.50.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2019-08-24
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.50
\nBid-YTW : 3.57 %<\/td>\n<\/tr>\n
BNS.PR.Q<\/td>\nFixedReset<\/td>\n125,406<\/td>\nRBC crossed 75,000 at 25.43; Desjardins crossed 50,000 at the same price.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2018-10-25
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.44
\nBid-YTW : 3.13 %<\/td>\n<\/tr>\n
There were 20 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
PWF.PR.O<\/td>\nPerpetual-Premium<\/td>\nQuote: 26.15 – 26.45
\nSpot Rate : 0.3000
\nAverage : 0.2062<\/p>\n

YTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2014-10-31
\nMaturity Price : 26.00
\nEvaluated at bid price : 26.15
\nBid-YTW : 2.67 %<\/td>\n<\/tr>\n

PWF.PR.A<\/td>\nFloater<\/td>\nQuote: 20.00 – 20.30
\nSpot Rate : 0.3000
\nAverage : 0.2133<\/p>\n

YTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2044-07-10
\nMaturity Price : 20.00
\nEvaluated at bid price : 20.00
\nBid-YTW : 2.64 %<\/td>\n<\/tr>\n

HSB.PR.D<\/td>\nDeemed-Retractible<\/td>\nQuote: 25.33 – 25.60
\nSpot Rate : 0.2700
\nAverage : 0.1942<\/p>\n

YTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2014-12-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.33
\nBid-YTW : 2.49 %<\/td>\n<\/tr>\n

SLF.PR.I<\/td>\nFixedReset<\/td>\nQuote: 26.13 – 26.40
\nSpot Rate : 0.2700
\nAverage : 0.2059<\/p>\n

YTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2016-12-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 26.13
\nBid-YTW : 2.42 %<\/td>\n<\/tr>\n

PWF.PR.P<\/td>\nFixedReset<\/td>\nQuote: 23.16 – 23.38
\nSpot Rate : 0.2200
\nAverage : 0.1769<\/p>\n

YTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2044-07-10
\nMaturity Price : 22.75
\nEvaluated at bid price : 23.16
\nBid-YTW : 3.52 %<\/td>\n<\/tr>\n

HSE.PR.A<\/td>\nFixedReset<\/td>\nQuote: 23.10 – 23.22
\nSpot Rate : 0.1200
\nAverage : 0.0805<\/p>\n

YTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2044-07-10
\nMaturity Price : 22.72
\nEvaluated at bid price : 23.10
\nBid-YTW : 3.72 %<\/td>\n<\/tr>\n<\/table>\n","protected":false},"excerpt":{"rendered":"

Looks like Canadian shadow banking is picking up: Canada\u2019s banks developed their commercial banking arms over decades by lending to companies that typically generate annual revenue of $50-million or less, nurturing scores of client relationships. …<\/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-25786","post","type-post","status-publish","format-standard","hentry","category-market-action"],"_links":{"self":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/25786","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=25786"}],"version-history":[{"count":0,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/25786\/revisions"}],"wp:attachment":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=25786"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=25786"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=25786"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}