{"id":49458,"date":"2018-06-25T11:46:00","date_gmt":"2018-06-25T15:46:00","guid":{"rendered":"https:\/\/prefblog.com\/?p=49458"},"modified":"2025-08-18T11:47:23","modified_gmt":"2025-08-18T15:47:23","slug":"june-25-2018","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=49458","title":{"rendered":"June 25, 2018"},"content":{"rendered":"

I indulged myself on February 26<\/a>, complaining about sales competition from Mortgage Investment Corporations:<\/p>\n

\n

I have a great personal interest in this matter, as every now and then a prospective client sneers at the pathetic yield offered by preferred shares and condescendingly informs me that he can get 8%, no problem, from a mortgage investment corporation. I don\u2019t think these guys know about risk \u2026 but then, they don\u2019t have to! Every one I\u2019ve ever talked to is smart enough that he\u2019ll get out before problems become apparent to the hoi polloi.<\/p>\n<\/blockquote>\n

So I’m following the Fortress receivership<\/a> with great interest:<\/p>\n

\n

Syndicated mortgage loans for real estate projects developed by Fortress Real Developments Inc. are \u201cunder considerable stress,\u201d and lenders could face \u201csignificant losses,\u201d according to a new report from a court-appointed receiver.<\/p>\n

In its first update since it was appointed in April, FAAN Mortgage Administrators Inc. said some of the largest loans provided for Fortress projects are at risk because senior mortgage lenders are moving to foreclose on the properties.
…<\/b>
FAAN said it needs more time and money to do more appraisals of the projects to find the best potential outcomes for the syndicated lenders, whose loans often rank in third place or lower to those of other lenders.
…<\/b>
FAAN\u2019s update also said about 35 per cent of the money raised from syndicated lenders was used to pay \u201cdevelopment consultant fees,\u201d about half going to the brokers who raised the funds from individual investors, and the other half paid to BDMC in its capacity as the borrowers\u2019 broker and to Fortress.<\/p>\n<\/blockquote>\n

It’s hard to make money when 35% of your investment pays up-front brokerage fees! <\/p>\n

FAAN is communicating well, with links to relevant material prominently displayed on the index page of their website<\/a>. There are a few juicy bits in the Report of the Receiver<\/a>:<\/p>\n

\n

Moreover, many Investors agreed to terms that permit repayment \u201cwaterfalls\u201d that, at least in some instances, appear to permit owners of the real estate (including the borrowers and owners of the borrowers) to recover some of the amounts they invested in the developments in priority to the amounts loaned by the Investors.
…<\/b>
The Trustee has been advised that many of the projects need further funding to permit developments to continue and that such funding is only available if the security interests granted to BDMC are further postponed and subordinated to new financing.<\/p>\n<\/blockquote>\n

Professional fees appear to be $150,000 monthly, according to Paragraph 53 of the report. Oh, it’s a great business!<\/p>\n

Manulife is exiting the fixed annuities business<\/a>:<\/p>\n

\n

Toronto-based Manulife Financial Corp.\u2018s decision to discontinue external sales of individual fixed annuities will mean there are fewer options in an already limited annuities marketplace for clients who are seeking a guaranteed income stream during retirement.
…<\/b>
Manulife became one of the largest providers of annuities in Canada following its acquisition of Montreal-based Standard Life Assurance Co. of Canada in 2015, the latter of which offered a \u201cfull spectrum of products,\u201d according to Lawrence Geller, president of L.I. Geller Insurance Agencies Ltd. in Campbellville, Ont.<\/p>\n

Manulife\u2019s exit from the annuities business leaves a big gap. In fact, Geller says, there are \u201cfewer and fewer\u201d insurers offering annuities.
…<\/b>
In 2011, Manulife\u2019s U.S. subsidiary, Boston-based John Hancock Financial, discontinued several annuities lines because of low interest rates and volatile equities markets. That year, Manulife\u2019s income statement took a hit of $900 million triggered by John Hancock\u2019s annuities-related losses.<\/p>\n

Then, in 2013, Toronto-based Sun Life Financial Inc. sold its U.S. annuities business following earlier losses for reasons similar to those suffered by John Hancock, which forced Sun Life to beef up its reserves.
…<\/b>
Although Manulife is exiting this space, other big insurers, such as Toronto-based Canada Life Assurance Co., Winnipeg-based Great-West Life Assurance Co. and Sun Life, continue to offer fixed annuities in Canada.<\/p>\n<\/blockquote>\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>\n-0.2650 %<\/td>\n2,978.4<\/td>\n<\/tr>\n
FixedFloater<\/td>\n0.00 %<\/td>\n0.00 %<\/td>\n0<\/td>\n0.00<\/td>\n0<\/td>\n-0.2650 %<\/td>\n5,465.3<\/td>\n<\/tr>\n
Floater<\/td>\n3.38 %<\/td>\n3.59 %<\/td>\n71,832<\/td>\n18.31<\/td>\n4<\/td>\n-0.2650 %<\/td>\n3,149.7<\/td>\n<\/tr>\n
OpRet<\/td>\n0.00 %<\/td>\n0.00 %<\/td>\n0<\/td>\n0.00<\/td>\n0<\/td>\n-0.1911 %<\/td>\n3,167.6<\/td>\n<\/tr>\n
SplitShare<\/td>\n4.64 %<\/td>\n4.65 %<\/td>\n66,363<\/td>\n4.97<\/td>\n5<\/td>\n-0.1911 %<\/td>\n3,782.8<\/td>\n<\/tr>\n
Interest-Bearing<\/td>\n0.00 %<\/td>\n0.00 %<\/td>\n0<\/td>\n0.00<\/td>\n0<\/td>\n-0.1911 %<\/td>\n2,951.5<\/td>\n<\/tr>\n
Perpetual-Premium<\/td>\n5.63 %<\/td>\n-7.38 %<\/td>\n62,235<\/td>\n0.09<\/td>\n9<\/td>\n0.0000 %<\/td>\n2,888.8<\/td>\n<\/tr>\n
Perpetual-Discount<\/td>\n5.37 %<\/td>\n5.54 %<\/td>\n62,408<\/td>\n14.59<\/td>\n26<\/td>\n0.0393 %<\/td>\n2,971.9<\/td>\n<\/tr>\n
FixedReset<\/td>\n4.32 %<\/td>\n4.58 %<\/td>\n149,951<\/td>\n5.69<\/td>\n106<\/td>\n-0.1667 %<\/td>\n2,534.5<\/td>\n<\/tr>\n
Deemed-Retractible<\/td>\n5.16 %<\/td>\n5.67 %<\/td>\n69,669<\/td>\n5.53<\/td>\n27<\/td>\n0.2717 %<\/td>\n2,957.7<\/td>\n<\/tr>\n
FloatingReset<\/td>\n3.06 %<\/td>\n3.72 %<\/td>\n33,388<\/td>\n3.42<\/td>\n9<\/td>\n-0.0698 %<\/td>\n2,796.3<\/td>\n<\/tr>\n<\/table>\n\n\n\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
MFC.PR.O<\/td>\nFixedReset<\/td>\n-1.37 %<\/td>\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2021-06-19
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.90
\nBid-YTW : 4.37 %<\/td>\n<\/tr>\n
TD.PF.D<\/td>\nFixedReset<\/td>\n-1.30 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2048-06-25
\nMaturity Price : 23.29
\nEvaluated at bid price : 24.34
\nBid-YTW : 4.72 %<\/td>\n<\/tr>\n
BAM.PR.R<\/td>\nFixedReset<\/td>\n-1.17 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2048-06-25
\nMaturity Price : 20.26
\nEvaluated at bid price : 20.26
\nBid-YTW : 5.01 %<\/td>\n<\/tr>\n
EIT.PR.B<\/td>\nSplitShare<\/td>\n-1.12 %<\/td>\nYTW SCENARIO
\nMaturity Type : Soft Maturity
\nMaturity Date\t: 2025-03-14
\nMaturity Price : 25.00
\nEvaluated at bid price : 24.68
\nBid-YTW : 5.08 %<\/td>\n<\/tr>\n
MFC.PR.F<\/td>\nFixedReset<\/td>\n-1.11 %<\/td>\nYTW SCENARIO
\nMaturity Type : Hard Maturity
\nMaturity Date\t: 2025-01-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 18.67
\nBid-YTW : 7.79 %<\/td>\n<\/tr>\n
MFC.PR.K<\/td>\nFixedReset<\/td>\n-1.02 %<\/td>\nYTW SCENARIO
\nMaturity Type : Hard Maturity
\nMaturity Date\t: 2025-01-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 22.30
\nBid-YTW : 6.23 %<\/td>\n<\/tr>\n
SLF.PR.D<\/td>\nDeemed-Retractible<\/td>\n1.39 %<\/td>\nYTW SCENARIO
\nMaturity Type : Hard Maturity
\nMaturity Date\t: 2025-01-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 21.21
\nBid-YTW : 7.42 %<\/td>\n<\/tr>\n<\/table>\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>\n111,600<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2048-06-25
\nMaturity Price : 22.75
\nEvaluated at bid price : 23.20
\nBid-YTW : 4.52 %<\/td>\n<\/tr>\n
BAM.PF.F<\/td>\nFixedReset<\/td>\n90,900<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2048-06-25
\nMaturity Price : 23.84
\nEvaluated at bid price : 24.27
\nBid-YTW : 4.93 %<\/td>\n<\/tr>\n
RY.PR.H<\/td>\nFixedReset<\/td>\n54,600<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2048-06-25
\nMaturity Price : 23.04
\nEvaluated at bid price : 23.55
\nBid-YTW : 4.46 %<\/td>\n<\/tr>\n
TD.PF.I<\/td>\nFixedReset<\/td>\n42,000<\/td>\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2022-10-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 24.96
\nBid-YTW : 4.74 %<\/td>\n<\/tr>\n
SLF.PR.I<\/td>\nFixedReset<\/td>\n41,300<\/td>\nYTW SCENARIO
\nMaturity Type : Hard Maturity
\nMaturity Date\t: 2025-01-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 24.10
\nBid-YTW : 4.83 %<\/td>\n<\/tr>\n
NA.PR.E<\/td>\nFixedReset<\/td>\n38,400<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2048-06-25
\nMaturity Price : 22.71
\nEvaluated at bid price : 23.83
\nBid-YTW : 4.76 %<\/td>\n<\/tr>\n
There were 14 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
BAM.PR.B<\/td>\nFloater<\/td>\nQuote: 16.75 – 17.50
\nSpot Rate : 0.7500
\nAverage : 0.4816<\/p>\n

YTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2048-06-25
\nMaturity Price : 16.75
\nEvaluated at bid price : 16.75
\nBid-YTW : 3.60 %<\/td>\n<\/tr>\n

PVS.PR.D<\/td>\nSplitShare<\/td>\nQuote: 25.22 – 25.70
\nSpot Rate : 0.4800
\nAverage : 0.2865<\/p>\n

YTW SCENARIO
\nMaturity Type : Hard Maturity
\nMaturity Date\t: 2021-10-08
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.22
\nBid-YTW : 4.30 %<\/td>\n<\/tr>\n

BAM.PF.E<\/td>\nFixedReset<\/td>\nQuote: 23.00 – 23.69
\nSpot Rate : 0.6900
\nAverage : 0.5333<\/p>\n

YTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2048-06-25
\nMaturity Price : 22.64
\nEvaluated at bid price : 23.00
\nBid-YTW : 4.88 %<\/td>\n<\/tr>\n

EIT.PR.B<\/td>\nSplitShare<\/td>\nQuote: 24.68 – 25.01
\nSpot Rate : 0.3300
\nAverage : 0.2004<\/p>\n

YTW SCENARIO
\nMaturity Type : Soft Maturity
\nMaturity Date\t: 2025-03-14
\nMaturity Price : 25.00
\nEvaluated at bid price : 24.68
\nBid-YTW : 5.08 %<\/td>\n<\/tr>\n

MFC.PR.O<\/td>\nFixedReset<\/td>\nQuote: 25.90 – 26.22
\nSpot Rate : 0.3200
\nAverage : 0.1937<\/p>\n

YTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2021-06-19
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.90
\nBid-YTW : 4.37 %<\/td>\n<\/tr>\n

TRP.PR.D<\/td>\nFixedReset<\/td>\nQuote: 22.54 – 23.06
\nSpot Rate : 0.5200
\nAverage : 0.4010<\/p>\n

YTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2048-06-25
\nMaturity Price : 21.97
\nEvaluated at bid price : 22.54
\nBid-YTW : 4.82 %<\/td>\n<\/tr>\n<\/table>\n","protected":false},"excerpt":{"rendered":"

I indulged myself on February 26, complaining about sales competition from Mortgage Investment Corporations: I have a great personal interest in this matter, as every now and then a prospective client sneers at the pathetic …<\/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-49458","post","type-post","status-publish","format-standard","hentry","category-market-action"],"_links":{"self":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/49458","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=49458"}],"version-history":[{"count":1,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/49458\/revisions"}],"predecessor-version":[{"id":49459,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/49458\/revisions\/49459"}],"wp:attachment":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=49458"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=49458"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=49458"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}