My eagle-eyed readership will have noticed that the FixedFloater index is not doing very well recently.<\/p>\n
This is largely due to the fact that it is entirely comprised of BCE issues<\/a>: BCE has been in the news lately due to speculation that Ontario Teachers<\/a> might take a run at it … or at least try to pump up the shareholder value … and I don’t mean the PREFERRED shares!<\/p>\n DBRS<\/a> had this to say today:<\/p>\n DBRS notes that the Company\u2019s largest shareholder, Ontario Teachers\u2019 Pension Plan Board (OTBP or Teachers), has recently changed its long-standing position from being a more passive shareholder to an active shareholder. This change could place further pressure on the Company and thereby heighten its event risk.<\/p>\n DBRS\u2019s current expectations for BCE include the Company maintaining a stable and conservative balance sheet and the balanced deployment of the Telesat proceeds. Should the Company\u2019s response to recent pressure be outside of DBRS\u2019s expectations, DBRS may reconsider the appropriateness of the Company\u2019s A (low)\/\u201cA\u201d ratings.<\/p>\n However, DBRS currently expects that any changes in the Company\u2019s financial policy as outlined above would likely result in one-notch rating change at BCE to BBB (high)\/A (low).<\/p>\n<\/blockquote>\n Nice, eh? I tell people and tell people : Floating prefs are not money market instruments<\/a>, no matter how much they quack like those ducks, but nobody ever listens.<\/p>\n A more aggressively pro-shareholder stance by BCE will not lead to another offer for the preferreds<\/a> – if anything, such an event will be less likely. I bet the old Bell Canada pref holders are now feeling a little blue : they voted to switch to an inferior credit<\/a> for a trivial consideration and this could be nasty.<\/p>\n How will all this work out? I have no idea. I’d be buying options like crazy if I did. But I did want to ensure that readers understand that the recent decline in the FixedFloater index (down to 1,039.4 today from a peak of 1055.7 on March 15) is not necessarily due to any market disenchantment with FixedFloaters – it is more likely BCE related.\n<\/p>\n <\/p>\n","protected":false},"excerpt":{"rendered":" My eagle-eyed readership will have noticed that the FixedFloater index is not doing very well recently. This is largely due to the fact that it is entirely comprised of BCE issues: BCE has been in …<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[10],"tags":[],"class_list":["post-757","post","type-post","status-publish","format-standard","hentry","category-index-construction-and-reporting"],"_links":{"self":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/757","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=757"}],"version-history":[{"count":0,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/757\/revisions"}],"wp:attachment":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=757"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=757"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=757"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}\n