{"id":32283,"date":"2006-09-25T12:01:01","date_gmt":"2006-09-25T16:01:01","guid":{"rendered":"http:\/\/www.prefblog.com\/?p=123"},"modified":"2006-09-25T12:01:01","modified_gmt":"2006-09-25T16:01:01","slug":"e-l-financial-new-issue","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=32283","title":{"rendered":"E-L Financial New Issue!"},"content":{"rendered":"<p>E-L Financial has announced a new perpetual issue. See <a href=\"http:\/\/www.ccnmatthews.com\/news\/releases\/news.jsp\">CCN Mathews<\/a> for the press release &#8230; the actual press releases cannot be linked, but were timestamped 9:47 &#038; 9:48 am, ET, today.<\/p>\n<p>No prospectus is yet available on <a href=\"http:\/\/www.sedar.com\">SEDAR<\/a>, but informal information available to me indicates that it can be described as follows:<\/p>\n<p>Dividend: 4.75%, or $1.1875 p.a. per share, non-cumulative<\/p>\n<p>Redemption: $26.00 commencing October 17, 2011, declining by $0.25 p.a. until it&#8217;s redeemable at $25.00 at any time on or after October 17, 2015. The company has the right to force conversion into stock, using the applicable redemption price and the greater of $1.00 or 95% of the average common price (as defined) to determine the exchange ratio.<\/p>\n<p>Rating: A preliminary rating of P-2(high) from <a href=\"http:\/\/www.standardandpoors\">Standard &#038; Poors<\/a> has been claimed. I have no information regarding a <a href=\"http:\/\/www.dbrs.com\">DBRS<\/a> rating but, for analytical purposes, have assumed a Pfd-2(low) rating, the same as the existing ELF.PR.F.<\/p>\n<p>It&#8217;s a bought deal via RBC-DS.<\/p>\n<p>Preliminary analysis using a taxable yield curve indicates the following:<\/p>\n<table>\n<tr>\n<td>Curve Attribute<\/td>\n<td><strong>ELF.PR.?<\/strong><\/td>\n<td><strong>RY.PR.B<\/strong><\/td>\n<\/tr>\n<tr>\n<td>Price due to base-rate<\/td>\n<td>23.61<\/td>\n<td>23.57<\/td>\n<\/tr>\n<tr>\n<td>Price due to short-term<\/td>\n<td>0.08<\/td>\n<td>0.07<\/td>\n<\/tr>\n<tr>\n<td>Price due to long-term<\/td>\n<td>0.70<\/td>\n<td>0.75<\/td>\n<\/tr>\n<tr>\n<td>Price due to Credit Spread (2)<\/td>\n<td>-0.72<\/td>\n<td>N\/A<\/td>\n<\/tr>\n<tr>\n<td>Price due to error<\/td>\n<td>0.02<\/td>\n<td>-0.01<\/td>\n<\/tr>\n<tr>\n<td>Price due to Credit Spread (Low)<\/td>\n<td>-0.33<\/td>\n<td>-0.38<\/td>\n<\/tr>\n<tr>\n<td><strong>Total Intrinsic<\/strong><\/td>\n<td>23.35*<\/td>\n<td>24.00*<\/td>\n<\/tr>\n<tr>\n<td>Price due to Liquidity<\/td>\n<td>1.44<\/td>\n<td>1.44<\/td>\n<\/tr>\n<tr>\n<td><strong>Total Curve Price<\/strong><\/td>\n<td>24.79*<\/td>\n<td>25.45*<\/td>\n<\/tr>\n<tr>\n<td colspan=\"3\">*<em>Note Rounding Error<\/em><\/td>\n<\/tr>\n<\/table>\n<p>The &#8220;Price due to Liquidity&#8221; for the ELF.PR.? is a little fishy. As with all new issues, the analysis assumes maximal liquidity, but on the other hand, the ELF is only a $100-million dollar issue. $1.44 liquidity value seems a little steep!<\/p>\n<p>Another way to say the same thing is: I think the EL new issue should be priced at less than the RY.PR.B by the sum of:<\/p>\n<ul>\n<li>$0.72 for the credit spread<\/li>\n<li>Somewhere between $0.00 and $1.44 for the liquidity<\/li>\n<\/ul>\n<p>Well, I won&#8217;t be rushing to pull out my chequebook for this one! Seems to me that, like the <a href=\"http:\/\/www.prefblog.com\/?p=106\">Fortis new issue<\/a>, the underwriters are pricing this deal according to the trading levels of all the Pfd-1(low) bank perps and hoping nobody notices the credit difference.<\/p>\n<p>This new issue has been added to the HIMIPref\u2122 database with the symbol ELF.PR.?.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>E-L Financial has announced a new perpetual issue. See CCN Mathews for the press release &#8230; the actual press releases cannot be linked, but were timestamped 9:47 &#038; 9:48 am, ET, today. No prospectus is &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[33,17],"tags":[],"class_list":["post-32283","post","type-post","status-publish","format-standard","hentry","category-data-fixes","category-new-issues"],"_links":{"self":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/32283","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=32283"}],"version-history":[{"count":0,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/32283\/revisions"}],"wp:attachment":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=32283"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=32283"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=32283"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}