{"id":43759,"date":"2022-07-05T10:54:31","date_gmt":"2022-07-05T15:54:31","guid":{"rendered":"https:\/\/prefblog.com\/?p=43759"},"modified":"2022-07-05T10:54:31","modified_gmt":"2022-07-05T15:54:31","slug":"research-importance-of-fixedreset-spreads","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=43759","title":{"rendered":"Research : Importance of FixedReset Spreads"},"content":{"rendered":"<p>The <a href=\"https:\/\/prefblog.com\/?p=17291\">reissue of BCE.PR.K<\/a> in December, 2011, was one of the most cynical or most ignorant moves by preferred share underwriters and salesmen I have ever seen. So I was prompted to, yet again, implore investors to look at valuation factors more important than Current Yield.<\/p>\n<p>As I state in the conclusion:<\/p>\n<blockquote><p>Issue Reset Spreads are extremely important in the valuation of FixedReset issues that are not expected to be called \u2013 as a rough rule of thumb, I suggest that this includes investment grade issues with an Issue Reset Spread of 200bp or less, and junk issues with an Issue Reset Spread of 300bp or less. I consider the situation for issues with Issue Reset Spreads up to 100bp greater than these thresholds to be unclear, and will depend on relatively minor changes in market conditions.<\/p>\n<p>Investors should pay particular attention to the Issue Reset Spread when selecting issues \u2013 even if one does not wish to perform a precise yield analysis for a presumed level of the GOC-5 rate, one should at the very least calculate what the Current Yield will be if the current price is maintained after reset at some reasonable and consistent value of GOC-5.<\/p><\/blockquote>\n<p>Look for the research link!<\/p>\n<div align=\" center\" =\"\"=\"\"><a href=\"http:\/\/www.himivest.com\/media\/prefLetterApp_1201.pdf\"><img decoding=\"async\" src=\"http:\/\/www.prefblog.com\/images\/ad_importanceFixedResetSpreads_PL.gif\"><\/a><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>The reissue of BCE.PR.K in December, 2011, was one of the most cynical or most ignorant moves by preferred share underwriters and salesmen I have ever seen. So I was prompted to, yet again, implore &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[22],"tags":[],"class_list":["post-43759","post","type-post","status-publish","format-standard","hentry","category-publications"],"_links":{"self":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/43759","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=43759"}],"version-history":[{"count":0,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/43759\/revisions"}],"wp:attachment":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=43759"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=43759"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=43759"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}