{"id":32247,"date":"2006-08-22T12:37:10","date_gmt":"2006-08-22T16:37:10","guid":{"rendered":"http:\/\/www.prefblog.com\/?p=86"},"modified":"2006-08-22T12:37:10","modified_gmt":"2006-08-22T16:37:10","slug":"ryprk","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=32247","title":{"rendered":"RY.PR.K"},"content":{"rendered":"<p>The Yield-to-Worst on this issue went negative on 2006-08-21, joining <a href=\"http:\/\/www.prefblog.com\/?p=80\">BMO.PR.G<\/a> to be the second member of the &#8220;Operating Retractibles&#8221; index with negative YTW.<\/p>\n<p>The option schedule on the RY.PR.Ks is:<\/p>\n<ul>\n<li>Redemption\u00a0\u00a0\u00a0\u00a0\u00a0 2004-08-24\u00a0\u00a0\u00a0\u00a0\u00a0 2005-08-23\u00a0 25.750000<\/li>\n<li>Redemption\u00a0\u00a0\u00a0\u00a0\u00a0 2005-08-24\u00a0\u00a0\u00a0\u00a0\u00a0 2006-08-23\u00a0 25.500000<\/li>\n<li>Redemption\u00a0\u00a0\u00a0\u00a0\u00a0 2006-08-24\u00a0\u00a0\u00a0\u00a0\u00a0 2007-08-23\u00a0 25.250000<\/li>\n<li>Redemption\u00a0\u00a0\u00a0\u00a0\u00a0 2007-08-24\u00a0\u00a0 INFINITE DATE\u00a0 25.000000<\/li>\n<li>Redemption\u00a0\u00a0\u00a0\u00a0\u00a0 2003-08-24\u00a0\u00a0\u00a0\u00a0\u00a0 2004-08-23\u00a0 26.000000<\/li>\n<li>Retraction\u00a0\u00a0\u00a0\u00a0\u00a0 2008-08-24\u00a0\u00a0 INFINITE DATE\u00a0 25.000000<\/li>\n<\/ul>\n<p>And the (pre-tax) YTW Scenario analysis is:<\/p>\n<ul>\n<li>Call\u00a0 2006-09-20 YTM: 9.13 % [Restricted: 0.75 %] (Prob: 13.55 %)<\/li>\n<li>Call\u00a0 2006-09-23 YTM: -2.32 % [Restricted: -0.21 %] (Prob: 8.85 %)<\/li>\n<li>Call\u00a0 2006-12-19 YTM: 2.70 % [Restricted: 0.89 %] (Prob: 5.21 %)<\/li>\n<li>Soft Maturity\u00a0 2008-08-23 YTM: 3.87 % [Restricted: 3.87 %] (Prob: 72.39 %)<\/li>\n<\/ul>\n<p>This is another one of those situations which may ultimately force me to define yet another yield measure: &#8220;Yield-to-Best-For-Issuer&#8221;. The YTW is based on an immediate call at $25.25, which would lead to an absolute loss of money from yesterday&#8217;s closing bid of $25.40 (never mind the closing offer of $25.59!). If Royal waits a year prior to calling, however, they will save themselves $0.25 on the call price and only pay $1.1750 in extra dividends for that period. They can calculate their net cost of funds for the next twelve months, then as less than $1.00 on a $25.00 loan, which is considerably below what they would have to pay on a new perpetual issue (although another retractible might possibly be competitive: CGI.PR.C pays $0.975 and is quoted at $25.45-74).<\/p>\n<p>No matter how it&#8217;s sliced, it&#8217;s very unlikely that you&#8217;ll see HIMIPref\u2122 recommending this issue in the near future &#8230; too short-term, for one thing.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Yield-to-Worst on this issue went negative on 2006-08-21, joining BMO.PR.G to be the second member of the &#8220;Operating Retractibles&#8221; index with negative YTW. The option schedule on the RY.PR.Ks is: Redemption\u00a0\u00a0\u00a0\u00a0\u00a0 2004-08-24\u00a0\u00a0\u00a0\u00a0\u00a0 2005-08-23\u00a0 25.750000 &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13],"tags":[],"class_list":["post-32247","post","type-post","status-publish","format-standard","hentry","category-issue-comments"],"_links":{"self":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/32247","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=32247"}],"version-history":[{"count":0,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/32247\/revisions"}],"wp:attachment":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=32247"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=32247"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=32247"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}