Government Motors will be profitable, provided subsidies are increased:
The Electrification Coalition, a Washington-based group of 21 company executives that formed a year ago to advocate for electric vehicles, released a report requesting the tax credits for corporations that make purchases for fleets, and to extend assistance through 2018 for building charging stations.
Coalition members are promoting their agenda ahead of a new Congress that will take office in January, with Republicans replacing Democrats in control of the House. General Electric Co. announced Nov. 11 that it plans to buy as many as 25,000 rechargeable cars, almost half from General Motors Co.
“I would almost guarantee you we will be successful in the next two years” in advancing the electric-vehicle agenda, Representative Edward Markey, a Massachusetts Democrat, said at the news conference.
DBRS had some good commentary on the G-20:
DBRS continues to believe the Canadian banks are well positioned to comply with the new minimum capital ratios given their existing tangible common equity ratios, expectation of internal capital generation, extended implementation period of adjustments and the lengthy phase-in period.
Going forward, DBRS believes the identification of systemically important financial institutions (SIFI) and globally SIFI (G-SIFI) will be an issue that could negatively impact one or more of the largest Canadian Banks as SIFIs and G-SIFI will be required to have higher loss absorbency capacity to reflect the greater risk that the failure of these firms poses to the global financial system. Currently, based on DBRS’s global bank rating methodology, the five largest Canadian Banks (Bank of Montreal, Bank of Nova Scotia, Canadian Imperial Bank of Commerce, Royal Bank of Canada, and Toronto-Dominion Bank) are all deemed systemically important in Canada, which positively impacts DBRS’s senior and subordinated debt ratings of these banks.
Given that the comment period for Basel’s consultative paper “Proposal to ensure the loss absorbency of regulatory capital at the point of non-viability,” which includes the issue of contingent capital, ended on October 1, 2010, DBRS did not expect any significant announcements to be made surrounding this topic in the G-20 meeting in South Korea. The timeline for an announcement on contingent capital looks to be in or after 2011 as the Financial Stability Board and BCBS continue their work. Notwithstanding, DBRS believes the uncertainty surrounding contingent capital has been a contributing factor to spur significant subordinated debt issuances over the last month by several large Canadian banks.
Threats of easy sovereign default are having an effect in Europe:
Greece’s Prime Minister George Papandreou, speaking in Paris at a meeting of the Socialist International group, said Germany’s plan to force private bond investors to share the cost of sovereign bailouts with taxpayers was responsible for creating “a spiral of higher interest rates for countries that seemed to be in a difficult position, such as Ireland and Portugal … It could force economies toward bankruptcy.”
…
On Monday, Portuguese Finance Minister Fernando Teixeira dos Santos said Portugal might have to seek a bailout package if only to prevent other euro zone countries from getting infected.
…
The economic outlook for Portugal is so bleak that Foreign Affairs Minister Luis Amado said his country “faces a scenario of exit from the euro zone” – the 16 EU countries that share the euro – if it doesn’t get its financial house in order.
Gee … it’s not too long ago we were told such a thing couldn’t possibly happen!
The Canadian preferred share market took a hit today on very heavy volume, with PerpetualDiscounts down 37bp and FixedResets losing 17bp.
| HIMIPref™ Preferred Indices These values reflect the December 2008 revision of the HIMIPref™ Indices Values are provisional and are finalized monthly |
|||||||
| Index | Mean Current Yield (at bid) |
Median YTW |
Median Average Trading Value |
Median Mod Dur (YTW) |
Issues | Day’s Perf. | Index Value |
| Ratchet | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.2919 % | 2,240.6 |
| FixedFloater | 4.88 % | 3.49 % | 27,445 | 19.16 | 1 | 0.2247 % | 3,449.2 |
| Floater | 2.66 % | 2.33 % | 64,655 | 21.40 | 4 | 0.2919 % | 2,419.2 |
| OpRet | 4.73 % | 2.70 % | 59,272 | 2.45 | 8 | 0.1660 % | 2,406.6 |
| SplitShare | 5.36 % | -0.76 % | 121,141 | 1.07 | 3 | 2.4615 % | 2,485.5 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.1660 % | 2,200.6 |
| Perpetual-Premium | 5.63 % | 5.03 % | 161,345 | 2.74 | 24 | 0.0310 % | 2,027.1 |
| Perpetual-Discount | 5.31 % | 5.37 % | 262,096 | 14.84 | 53 | -0.3734 % | 2,056.0 |
| FixedReset | 5.20 % | 2.93 % | 339,426 | 3.19 | 50 | -0.1680 % | 2,292.2 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| ELF.PR.G | Perpetual-Discount | -2.64 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2040-11-15 Maturity Price : 20.25 Evaluated at bid price : 20.25 Bid-YTW : 5.94 % |
| MFC.PR.C | Perpetual-Discount | -2.33 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2040-11-15 Maturity Price : 20.56 Evaluated at bid price : 20.56 Bid-YTW : 5.48 % |
| MFC.PR.B | Perpetual-Discount | -1.83 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2040-11-15 Maturity Price : 21.43 Evaluated at bid price : 21.43 Bid-YTW : 5.43 % |
| PWF.PR.K | Perpetual-Discount | -1.43 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2040-11-15 Maturity Price : 22.56 Evaluated at bid price : 22.75 Bid-YTW : 5.48 % |
| PWF.PR.L | Perpetual-Discount | -1.40 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2040-11-15 Maturity Price : 23.07 Evaluated at bid price : 23.27 Bid-YTW : 5.52 % |
| FTS.PR.H | FixedReset | -1.31 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2015-07-01 Maturity Price : 25.00 Evaluated at bid price : 25.67 Bid-YTW : 3.56 % |
| GWO.PR.I | Perpetual-Discount | -1.17 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2040-11-15 Maturity Price : 21.20 Evaluated at bid price : 21.20 Bid-YTW : 5.39 % |
| CM.PR.K | FixedReset | -1.13 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2014-08-30 Maturity Price : 25.00 Evaluated at bid price : 27.20 Bid-YTW : 2.89 % |
| BMO.PR.H | Perpetual-Discount | 1.28 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2013-03-27 Maturity Price : 25.00 Evaluated at bid price : 25.34 Bid-YTW : 4.64 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| TDS.PR.C | SplitShare | 216,183 | New issue settled today. YTW SCENARIO Maturity Type : Call Maturity Date : 2011-12-15 Maturity Price : 10.00 Evaluated at bid price : 10.56 Bid-YTW : -0.76 % |
| CL.PR.B | Perpetual-Premium | 117,670 | Nesbitt crossed 27,500 at 25.40 and 80,000 at 25.38. YTW SCENARIO Maturity Type : Call Maturity Date : 2011-01-30 Maturity Price : 25.00 Evaluated at bid price : 25.35 Bid-YTW : 3.32 % |
| TD.PR.S | FixedReset | 104,439 | National crossed 99,800 at 26.65. YTW SCENARIO Maturity Type : Call Maturity Date : 2013-08-30 Maturity Price : 25.00 Evaluated at bid price : 26.61 Bid-YTW : 2.57 % |
| GWO.PR.J | FixedReset | 72,232 | Nesbitt bought two blocks of 10,000 from anonymous, both at 27.75, then bought 32,700 from TD at the same price. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-01-30 Maturity Price : 25.00 Evaluated at bid price : 27.71 Bid-YTW : 2.72 % |
| TD.PR.M | OpRet | 63,700 | Nesbitt crossed 18,400 at 25.90; RBC crossed 16,000 at 25.88. Scotia crossed 19,800 at 25.86. YTW SCENARIO Maturity Type : Call Maturity Date : 2010-12-15 Maturity Price : 25.75 Evaluated at bid price : 25.85 Bid-YTW : 2.12 % |
| BNS.PR.X | FixedReset | 52,864 | RBC crossed 12,700 at 27.95; TD crossed 13,400 at the same price. RBC crossed 10,000 at the same price again. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-05-25 Maturity Price : 25.00 Evaluated at bid price : 27.93 Bid-YTW : 2.87 % |
| There were 61 other index-included issues trading in excess of 10,000 shares. | |||