{"id":7779,"date":"2009-09-03T20:40:21","date_gmt":"2009-09-04T00:40:21","guid":{"rendered":"http:\/\/www.prefblog.com\/?p=7779"},"modified":"2009-09-03T20:40:21","modified_gmt":"2009-09-04T00:40:21","slug":"september-3-2009","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=7779","title":{"rendered":"September 3, 2009"},"content":{"rendered":"

There’s an interesting twist<\/a> in emerging Credit Rating Agency law:<\/p>\n

A U.S. judge refused to dismiss a lawsuit against Moody\u2019s Investors Service Inc. and Standard & Poor\u2019s, rejecting arguments that investors can\u2019t sue over deceptive ratings of private-placement notes because those opinions are protected by free-speech rights.
…<\/b>
U.S. District Judge Shira Scheindlin in New York rejected the ratings firms\u2019 arguments yesterday, forcing them and Morgan Stanley, which was also sued, to respond to fraud charges in a class-action by investors claiming the raters hid the risks of securities linked to subprime mortgages.
…<\/b>
Scheindlin said in her ruling that the First Amendment of the U.S. Constitution doesn\u2019t provide a defense the case because the rating firms\u2019 comments were distributed privately to a select group of investors and not to the general public.<\/p>\n

Without ruling on the merits of the lawsuit, the judge said opinions by the ratings companies may be the basis for a lawsuit \u201cif the speaker does not genuinely and reasonably believe it or if it is without basis in fact.\u201d She said there are enough facts alleged against the two agencies and Morgan Stanley, the sixth-biggest U.S. bank by assets, for the lawsuit to go forward with evidence gathering needed for any trial.<\/p><\/blockquote>\n

It seems pretty strange to me, but I’m prepared to concede that Scheindlin knows American constitutional law than I do! I don’t understand, however, why the CRAs have a duty to tell the truth. So they lie. So? The only person who’s paying them is the issuer. It also seems to me to be a reasonably easy lawsuit to defend: the CRAs simply have to show that they used a reasonable model such as the one they used for everything else.<\/p>\n

Private Equity methodology is changing<\/a>:<\/p>\n

The world\u2019s biggest private-equity firms, shut out of the market for leveraged buyouts as banks curtail lending, are turning to bankruptcy courts to make acquisitions.<\/p>\n

KKR & Co., the New York takeover firm co-founded by Henry Kravis, is part of a group converting loans made to Lear Corp. into a controlling stake in the bankrupt car-seat maker. Late yesterday, Hayes Lemmerz International Inc. said it reached an agreement with the lenders who financed its bankruptcy, giving them an equity stake in the maker of wheels for cars. This year, 162 companies merged or were bought out of bankruptcy, a 60 percent jump from the same period in 2008 and almost triple the amount in 2007, according to data compiled by Bloomberg.
…<\/b>
\u201cIt\u2019s not a tactic that private-equity firms have historically employed, but it seems to be an idea whose time has come,\u201d said Steven Smith, global head of leveraged finance and restructuring at UBS AG in New York. \u201cThis is clearly one of the new and most distinctive features of the current wave of restructurings.\u201d<\/p><\/blockquote>\n

PerpetualDiscounts continued to give ground today, losing 31bp agains a FixedReset gain of 6bp; all this happened on relatively light volume and muted volatility: the Performance Highlights chart is pretty skimpy today.<\/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>\n-0.6751 %<\/td>\n1,431.1<\/td>\n<\/tr>\n
FixedFloater<\/td>\n5.84 %<\/td>\n4.11 %<\/td>\n60,099<\/td>\n18.46<\/td>\n1<\/td>\n0.5946 %<\/td>\n2,628.1<\/td>\n<\/tr>\n
Floater<\/td>\n2.55 %<\/td>\n2.14 %<\/td>\n32,858<\/td>\n22.03<\/td>\n4<\/td>\n-0.6751 %<\/td>\n1,787.8<\/td>\n<\/tr>\n
OpRet<\/td>\n4.86 %<\/td>\n-11.08 %<\/td>\n127,226<\/td>\n0.09<\/td>\n15<\/td>\n-0.0128 %<\/td>\n2,278.7<\/td>\n<\/tr>\n
SplitShare<\/td>\n6.49 %<\/td>\n6.74 %<\/td>\n1,163,998<\/td>\n4.07<\/td>\n2<\/td>\n-0.7554 %<\/td>\n2,037.0<\/td>\n<\/tr>\n
Interest-Bearing<\/td>\n0.00 %<\/td>\n0.00 %<\/td>\n0<\/td>\n0.00<\/td>\n0<\/td>\n-0.0128 %<\/td>\n2,083.7<\/td>\n<\/tr>\n
Perpetual-Premium<\/td>\n5.76 %<\/td>\n5.55 %<\/td>\n151,681<\/td>\n2.59<\/td>\n12<\/td>\n0.0132 %<\/td>\n1,880.5<\/td>\n<\/tr>\n
Perpetual-Discount<\/td>\n5.70 %<\/td>\n5.75 %<\/td>\n205,091<\/td>\n14.29<\/td>\n59<\/td>\n-0.3099 %<\/td>\n1,800.5<\/td>\n<\/tr>\n
FixedReset<\/td>\n5.50 %<\/td>\n4.06 %<\/td>\n473,283<\/td>\n4.11<\/td>\n40<\/td>\n0.0619 %<\/td>\n2,104.9<\/td>\n<\/tr>\n<\/table>\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-3.62 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2039-09-03
\nMaturity Price : 18.62
\nEvaluated at bid price : 18.62
\nBid-YTW : 6.49 %<\/td>\n<\/tr>\n
TRI.PR.B<\/td>\nFloater<\/td>\n-2.58 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2039-09-03
\nMaturity Price : 18.51
\nEvaluated at bid price : 18.51
\nBid-YTW : 2.14 %<\/td>\n<\/tr>\n
GWO.PR.H<\/td>\nPerpetual-Discount<\/td>\n-1.78 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2039-09-03
\nMaturity Price : 20.92
\nEvaluated at bid price : 20.92
\nBid-YTW : 5.81 %<\/td>\n<\/tr>\n
RY.PR.H<\/td>\nPerpetual-Premium<\/td>\n-1.14 %<\/td>\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2017-06-23
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.26
\nBid-YTW : 5.55 %<\/td>\n<\/tr>\n
BNA.PR.C<\/td>\nSplitShare<\/td>\n-1.04 %<\/td>\nYTW SCENARIO
\nMaturity Type : Hard Maturity
\nMaturity Date\t: 2019-01-10
\nMaturity Price : 25.00
\nEvaluated at bid price : 19.10
\nBid-YTW : 8.02 %<\/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.P<\/td>\nFixedReset<\/td>\n123,646<\/td>\nNesbitt bought two blocks from Desjardins, 23,900 and 25,000 shares, both at 26.06. RBC crossed 15,000 and Desjardins crossed 50,000 at the same price.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2013-05-25
\nMaturity Price : 25.00
\nEvaluated at bid price : 26.06
\nBid-YTW : 3.90 %<\/td>\n<\/tr>\n
TD.PR.P<\/td>\nPerpetual-Discount<\/td>\n75,462<\/td>\nNesbitt crossed blocks of 22,300 and 45,000 shares, both at 23.50.
\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2039-09-03
\nMaturity Price : 23.29
\nEvaluated at bid price : 23.47
\nBid-YTW : 5.66 %<\/td>\n<\/tr>\n
SLF.PR.A<\/td>\nPerpetual-Discount<\/td>\n59,935<\/td>\nScotia crossed 50,000 at 20.60.
\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2039-09-03
\nMaturity Price : 20.60
\nEvaluated at bid price : 20.60
\nBid-YTW : 5.78 %<\/td>\n<\/tr>\n
PWF.PR.H<\/td>\nPerpetual-Discount<\/td>\n57,285<\/td>\nRBC crossed blocks of 19,400 and 24,900 shares, both at 25.00.
\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2039-09-03
\nMaturity Price : 24.56
\nEvaluated at bid price : 24.89
\nBid-YTW : 5.84 %<\/td>\n<\/tr>\n
BNS.PR.T<\/td>\nFixedReset<\/td>\n56,625<\/td>\nNesbitt crossed 50,000 shares at 27.90.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2014-05-25
\nMaturity Price : 25.00
\nEvaluated at bid price : 27.90
\nBid-YTW : 3.74 %<\/td>\n<\/tr>\n
GWO.PR.I<\/td>\nPerpetual-Discount<\/td>\n55,650<\/td>\nNesbitt crossed 50,000 at 19.80.
\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2039-09-03
\nMaturity Price : 19.80
\nEvaluated at bid price : 19.80
\nBid-YTW : 5.69 %<\/td>\n<\/tr>\n
There were 29 other index-included issues trading in excess of 10,000 shares.<\/td>\n<\/tr>\n<\/table>\n","protected":false},"excerpt":{"rendered":"

There’s an interesting twist in emerging Credit Rating Agency law: A U.S. judge refused to dismiss a lawsuit against Moody\u2019s Investors Service Inc. and Standard & Poor\u2019s, rejecting arguments that investors can\u2019t sue over deceptive …<\/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-7779","post","type-post","status-publish","format-standard","hentry","category-market-action"],"_links":{"self":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/7779","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=7779"}],"version-history":[{"count":0,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/7779\/revisions"}],"wp:attachment":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=7779"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=7779"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=7779"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}