{"id":7549,"date":"2009-08-14T19:37:15","date_gmt":"2009-08-14T23:37:15","guid":{"rendered":"http:\/\/www.prefblog.com\/?p=7549"},"modified":"2009-08-14T19:37:15","modified_gmt":"2009-08-14T23:37:15","slug":"august-14-2009","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=7549","title":{"rendered":"August 14, 2009"},"content":{"rendered":"

Non-performing loans in the States are reaching extraordinary levels<\/a>:<\/p>\n

More than 150 publicly traded U.S. lenders own nonperforming loans that equal 5 percent or more of their holdings, a level that former regulators say can wipe out a bank\u2019s equity and threaten its survival.<\/p>\n

The number of banks exceeding the threshold more than doubled in the year through June, according to data compiled by Bloomberg, as real estate and credit-card defaults surged. Almost 300 reported 3 percent or more of their loans were nonperforming, a term for commercial and consumer debt that has stopped collecting interest or will no longer be paid in full.<\/p><\/blockquote>\n

On August 12<\/a> I mentioned some proposed changes to rules in the States that would draw some clearer lines between a broker’s agent & principal functions when underwriting new municipal issues. There’s an example of bone-headed new issue pricing from Chicago<\/a>:<\/p>\n

The Metropolitan Water Reclamation District of Greater Chicago, in a debt offering typical of President Barack Obama\u2019s Build America Bonds, raised $600 million this week, relying on advice from Mesirow Financial Inc., a 72-year-old investment bank based in the city. Within 12 hours, the firm assured itself and investors a profit of at least 2 percent as the bonds appreciated as much as $25.82 for each $1,000 face amount, according to the Municipal Securities Rulemaking Board.
…<\/b>
The water district saved money for taxpayers with Build America Bonds, said Treasurer Harold Downs. The program, which started in April as part of President Barack Obama\u2019s $787 billion stimulus plan, pays a subsidy for 35 percent of the interest costs on taxable debt sold by states, local governments and universities to finance capital projects creating jobs.<\/p><\/blockquote>\n

Does this prove that the underwriter was incompetent or that there was hanky-panky? No. Is this a question that really needs to be looked at carefully? Yes.<\/p>\n

The preferred share market was on fire today, with PerpetualDiscounts gaining 83bp in their thirteenth consecutive trading day of gains. Yawn. In the course of this run, they have gained 6.63%. Yawn. FixedResets trailed, but were in the black at +39bp today, but were shut out of the volume tables. Yawn. Volume continued high. Yawn.<\/p>\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>\n1.9032 %<\/td>\n1,426.0<\/td>\n<\/tr>\n
FixedFloater<\/td>\n6.27 %<\/td>\n4.53 %<\/td>\n51,964<\/td>\n17.90<\/td>\n1<\/td>\n2.6020 %<\/td>\n2,450.1<\/td>\n<\/tr>\n
Floater<\/td>\n3.20 %<\/td>\n3.21 %<\/td>\n68,459<\/td>\n19.17<\/td>\n2<\/td>\n1.9032 %<\/td>\n1,781.5<\/td>\n<\/tr>\n
OpRet<\/td>\n4.86 %<\/td>\n-7.81 %<\/td>\n142,806<\/td>\n0.09<\/td>\n15<\/td>\n0.4547 %<\/td>\n2,276.1<\/td>\n<\/tr>\n
SplitShare<\/td>\n5.70 %<\/td>\n6.44 %<\/td>\n96,211<\/td>\n4.09<\/td>\n3<\/td>\n0.1264 %<\/td>\n2,037.4<\/td>\n<\/tr>\n
Interest-Bearing<\/td>\n0.00 %<\/td>\n0.00 %<\/td>\n0<\/td>\n0.00<\/td>\n0<\/td>\n0.4547 %<\/td>\n2,081.2<\/td>\n<\/tr>\n
Perpetual-Premium<\/td>\n5.75 %<\/td>\n5.17 %<\/td>\n72,627<\/td>\n2.64<\/td>\n4<\/td>\n0.2895 %<\/td>\n1,870.3<\/td>\n<\/tr>\n
Perpetual-Discount<\/td>\n5.76 %<\/td>\n5.74 %<\/td>\n181,139<\/td>\n14.20<\/td>\n67<\/td>\n0.8319 %<\/td>\n1,784.7<\/td>\n<\/tr>\n
FixedReset<\/td>\n5.48 %<\/td>\n3.95 %<\/td>\n506,564<\/td>\n4.16<\/td>\n40<\/td>\n0.3891 %<\/td>\n2,110.2<\/td>\n<\/tr>\n<\/table>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\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
ELF.PR.G<\/td>\nPerpetual-Discount<\/td>\n-1.39 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2039-08-14
\nMaturity Price : 17.76
\nEvaluated at bid price : 17.76
\nBid-YTW : 6.78 %<\/td>\n<\/tr>\n
CM.PR.E<\/td>\nPerpetual-Discount<\/td>\n1.00 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2039-08-14
\nMaturity Price : 23.87
\nEvaluated at bid price : 24.15
\nBid-YTW : 5.84 %<\/td>\n<\/tr>\n
SLF.PR.E<\/td>\nPerpetual-Discount<\/td>\n1.03 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2039-08-14
\nMaturity Price : 19.70
\nEvaluated at bid price : 19.70
\nBid-YTW : 5.80 %<\/td>\n<\/tr>\n
POW.PR.C<\/td>\nPerpetual-Discount<\/td>\n1.03 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2039-08-14
\nMaturity Price : 24.12
\nEvaluated at bid price : 24.46
\nBid-YTW : 5.99 %<\/td>\n<\/tr>\n
GWO.PR.H<\/td>\nPerpetual-Discount<\/td>\n1.04 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2039-08-14
\nMaturity Price : 21.42
\nEvaluated at bid price : 21.42
\nBid-YTW : 5.75 %<\/td>\n<\/tr>\n
RY.PR.A<\/td>\nPerpetual-Discount<\/td>\n1.04 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2039-08-14
\nMaturity Price : 20.42
\nEvaluated at bid price : 20.42
\nBid-YTW : 5.48 %<\/td>\n<\/tr>\n
BAM.PR.P<\/td>\nFixedReset<\/td>\n1.07 %<\/td>\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2014-10-30
\nMaturity Price : 25.00
\nEvaluated at bid price : 27.39
\nBid-YTW : 5.23 %<\/td>\n<\/tr>\n
BNS.PR.J<\/td>\nPerpetual-Discount<\/td>\n1.16 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2039-08-14
\nMaturity Price : 22.64
\nEvaluated at bid price : 23.60
\nBid-YTW : 5.56 %<\/td>\n<\/tr>\n
PWF.PR.H<\/td>\nPerpetual-Discount<\/td>\n1.16 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2039-08-14
\nMaturity Price : 24.09
\nEvaluated at bid price : 24.43
\nBid-YTW : 5.93 %<\/td>\n<\/tr>\n
BMO.PR.J<\/td>\nPerpetual-Discount<\/td>\n1.19 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2039-08-14
\nMaturity Price : 20.43
\nEvaluated at bid price : 20.43
\nBid-YTW : 5.53 %<\/td>\n<\/tr>\n
POW.PR.D<\/td>\nPerpetual-Discount<\/td>\n1.20 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2039-08-14
\nMaturity Price : 21.87
\nEvaluated at bid price : 21.98
\nBid-YTW : 5.75 %<\/td>\n<\/tr>\n
MFC.PR.C<\/td>\nPerpetual-Discount<\/td>\n1.20 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2039-08-14
\nMaturity Price : 20.00
\nEvaluated at bid price : 20.00
\nBid-YTW : 5.63 %<\/td>\n<\/tr>\n
RY.PR.D<\/td>\nPerpetual-Discount<\/td>\n1.23 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2039-08-14
\nMaturity Price : 20.60
\nEvaluated at bid price : 20.60
\nBid-YTW : 5.49 %<\/td>\n<\/tr>\n
RY.PR.F<\/td>\nPerpetual-Discount<\/td>\n1.29 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2039-08-14
\nMaturity Price : 20.36
\nEvaluated at bid price : 20.36
\nBid-YTW : 5.49 %<\/td>\n<\/tr>\n
BAM.PR.N<\/td>\nPerpetual-Discount<\/td>\n1.31 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2039-08-14
\nMaturity Price : 17.81
\nEvaluated at bid price : 17.81
\nBid-YTW : 6.79 %<\/td>\n<\/tr>\n
POW.PR.B<\/td>\nPerpetual-Discount<\/td>\n1.32 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2039-08-14
\nMaturity Price : 22.80
\nEvaluated at bid price : 23.06
\nBid-YTW : 5.86 %<\/td>\n<\/tr>\n
HSB.PR.D<\/td>\nPerpetual-Discount<\/td>\n1.34 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2039-08-14
\nMaturity Price : 21.90
\nEvaluated at bid price : 22.01
\nBid-YTW : 5.76 %<\/td>\n<\/tr>\n
BAM.PR.H<\/td>\nOpRet<\/td>\n1.37 %<\/td>\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2009-10-30
\nMaturity Price : 25.50
\nEvaluated at bid price : 25.86
\nBid-YTW : 2.17 %<\/td>\n<\/tr>\n
BAM.PR.B<\/td>\nFloater<\/td>\n1.40 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2039-08-14
\nMaturity Price : 12.27
\nEvaluated at bid price : 12.27
\nBid-YTW : 3.23 %<\/td>\n<\/tr>\n
SLF.PR.A<\/td>\nPerpetual-Discount<\/td>\n1.46 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2039-08-14
\nMaturity Price : 20.80
\nEvaluated at bid price : 20.80
\nBid-YTW : 5.80 %<\/td>\n<\/tr>\n
MFC.PR.E<\/td>\nFixedReset<\/td>\n1.47 %<\/td>\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2014-10-19
\nMaturity Price : 25.00
\nEvaluated at bid price : 26.73
\nBid-YTW : 4.03 %<\/td>\n<\/tr>\n
RY.PR.X<\/td>\nFixedReset<\/td>\n1.71 %<\/td>\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2014-09-23
\nMaturity Price : 25.00
\nEvaluated at bid price : 28.00
\nBid-YTW : 3.68 %<\/td>\n<\/tr>\n
MFC.PR.A<\/td>\nOpRet<\/td>\n1.77 %<\/td>\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2010-07-19
\nMaturity Price : 26.25
\nEvaluated at bid price : 26.51
\nBid-YTW : 2.42 %<\/td>\n<\/tr>\n
CL.PR.B<\/td>\nPerpetual-Discount<\/td>\n1.81 %<\/td>\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2009-09-13
\nMaturity Price : 25.50
\nEvaluated at bid price : 25.88
\nBid-YTW : -2.77 %<\/td>\n<\/tr>\n
PWF.PR.E<\/td>\nPerpetual-Discount<\/td>\n1.82 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2039-08-14
\nMaturity Price : 22.63
\nEvaluated at bid price : 23.45
\nBid-YTW : 5.88 %<\/td>\n<\/tr>\n
SLF.PR.C<\/td>\nPerpetual-Discount<\/td>\n1.91 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2039-08-14
\nMaturity Price : 19.75
\nEvaluated at bid price : 19.75
\nBid-YTW : 5.72 %<\/td>\n<\/tr>\n
GWO.PR.G<\/td>\nPerpetual-Discount<\/td>\n1.92 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2039-08-14
\nMaturity Price : 22.66
\nEvaluated at bid price : 22.84
\nBid-YTW : 5.77 %<\/td>\n<\/tr>\n
SLF.PR.D<\/td>\nPerpetual-Discount<\/td>\n2.05 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2039-08-14
\nMaturity Price : 19.90
\nEvaluated at bid price : 19.90
\nBid-YTW : 5.68 %<\/td>\n<\/tr>\n
MFC.PR.D<\/td>\nFixedReset<\/td>\n2.05 %<\/td>\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2014-07-19
\nMaturity Price : 25.00
\nEvaluated at bid price : 28.04
\nBid-YTW : 3.79 %<\/td>\n<\/tr>\n
SLF.PR.B<\/td>\nPerpetual-Discount<\/td>\n2.14 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2039-08-14
\nMaturity Price : 21.01
\nEvaluated at bid price : 21.01
\nBid-YTW : 5.80 %<\/td>\n<\/tr>\n
PWF.PR.K<\/td>\nPerpetual-Discount<\/td>\n2.16 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2039-08-14
\nMaturity Price : 21.46
\nEvaluated at bid price : 21.77
\nBid-YTW : 5.72 %<\/td>\n<\/tr>\n
HSB.PR.C<\/td>\nPerpetual-Discount<\/td>\n2.16 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2039-08-14
\nMaturity Price : 22.53
\nEvaluated at bid price : 22.70
\nBid-YTW : 5.69 %<\/td>\n<\/tr>\n
PWF.PR.L<\/td>\nPerpetual-Discount<\/td>\n2.18 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2039-08-14
\nMaturity Price : 21.94
\nEvaluated at bid price : 22.05
\nBid-YTW : 5.83 %<\/td>\n<\/tr>\n
W.PR.J<\/td>\nPerpetual-Discount<\/td>\n2.39 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2039-08-14
\nMaturity Price : 24.12
\nEvaluated at bid price : 24.37
\nBid-YTW : 5.81 %<\/td>\n<\/tr>\n
BAM.PR.K<\/td>\nFloater<\/td>\n2.40 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2039-08-14
\nMaturity Price : 12.36
\nEvaluated at bid price : 12.36
\nBid-YTW : 3.21 %<\/td>\n<\/tr>\n
BAM.PR.J<\/td>\nOpRet<\/td>\n2.43 %<\/td>\nYTW SCENARIO
\nMaturity Type : Soft Maturity
\nMaturity Date\t: 2018-03-30
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.26
\nBid-YTW : 5.38 %<\/td>\n<\/tr>\n
BAM.PR.G<\/td>\nFixedFloater<\/td>\n2.60 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2039-08-14
\nMaturity Price : 25.00
\nEvaluated at bid price : 17.35
\nBid-YTW : 4.53 %<\/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
BNS.PR.K<\/td>\nPerpetual-Discount<\/td>\n152,860<\/td>\nRBC bought two blocks from anonymous, of 14,800 and 16,800 shares, both at 21.48, then crossed 50,000 at 21.44 and finally bought 10,000 from TD at 21.40.
\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2039-08-14
\nMaturity Price : 21.44
\nEvaluated at bid price : 21.44
\nBid-YTW : 5.65 %<\/td>\n<\/tr>\n
GWO.PR.H<\/td>\nPerpetual-Discount<\/td>\n95,669<\/td>\nTD crossed three blocks, of 38,100 & 39,700 & 10,000 shares, all at 21.35.
\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2039-08-14
\nMaturity Price : 21.42
\nEvaluated at bid price : 21.42
\nBid-YTW : 5.75 %<\/td>\n<\/tr>\n
TD.PR.R<\/td>\nPerpetual-Discount<\/td>\n76,087<\/td>\nAnonymous crossed (?) 16,200 at 24.86, then sold two blocks, both of 20,000 shares, to Nesbitt at 24.87.
\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2039-08-14
\nMaturity Price : 24.55
\nEvaluated at bid price : 24.77
\nBid-YTW : 5.69 %<\/td>\n<\/tr>\n
ELF.PR.F<\/td>\nPerpetual-Discount<\/td>\n75,803<\/td>\nDesjardins crossed 46,400 at 19.30.
\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2039-08-14
\nMaturity Price : 19.20
\nEvaluated at bid price : 19.20
\nBid-YTW : 7.00 %<\/td>\n<\/tr>\n
TD.PR.O<\/td>\nPerpetual-Discount<\/td>\n53,876<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2039-08-14
\nMaturity Price : 21.85
\nEvaluated at bid price : 21.96
\nBid-YTW : 5.57 %<\/td>\n<\/tr>\n
BAM.PR.B<\/td>\nFloater<\/td>\n48,750<\/td>\nNesbitt crossed 32,000 at 12.20.
\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2039-08-14
\nMaturity Price : 12.27
\nEvaluated at bid price : 12.27
\nBid-YTW : 3.23 %<\/td>\n<\/tr>\n
There were 49 other index-included issues trading in excess of 10,000 shares.<\/td>\n<\/tr>\n<\/table>\n","protected":false},"excerpt":{"rendered":"

Non-performing loans in the States are reaching extraordinary levels: More than 150 publicly traded U.S. lenders own nonperforming loans that equal 5 percent or more of their holdings, a level that former regulators say can …<\/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-7549","post","type-post","status-publish","format-standard","hentry","category-market-action"],"_links":{"self":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/7549","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=7549"}],"version-history":[{"count":0,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/7549\/revisions"}],"wp:attachment":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=7549"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=7549"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=7549"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}