S&P has a negative outlook on Ontario:
- •In our view, Ontario continues to have a large, wealthy, and well-diversified economy; ongoing transfer payment support from the federal government for various social programs; adequate liquidity support; and exceptional access to capital markets.
- •We are affirming our ratings, including our ‘AA-‘ long-term and ‘A-1+’ short-term issuer credit ratings on the province.
- •The negative outlook reflects our view regarding the minority legislature’s ability in the next one to two years to meet what we view as aggressive cost containment targets necessary for the debt burden to peak in fiscal 2015 as planned.
…
The provincial government estimates that real GDP growth slowed to 1.6% in 2012 from a 1.8% gain in 2011. The government is forecasting real GDP growth to advance at a more tepid pace of 1.5% in 2013.
…
Ontario’s large budgetary deficits since the recession have significantly boosted its debt burden. At the end of fiscal 2013, Ontario’s tax-supported debt totaled C$259.7 billion, representing 230% of consolidated operating revenues (or about 39% of GDP). This is a sharp increase from 134% of consolidated operating revenues in fiscal 2008. Owing to the still-large after-capital deficits expected for fiscal 2014, the province projects its tax-supported debt burden will increase further to 235% of projected consolidated operating revenues (or about C$271.3 billion) this year, which represents an improvement from its forecast level in the fiscal 2013 budget. However, in our opinion, the rate of growth of Ontario’s debt burden remains a concern, as it is already at the high end of the range for similarly rated domestic and international peers.The negative outlook reflects our view that there is at least a one-in-three likelihood that we could lower the long-term rating one notch in the next year.
Additionally, DPS.UN is officially defunct:
DBRS has today discontinued the stability rating on the retractable units (the Units) issued by Diversified Preferred Share Trust following completion of its restructuring into an open-end mutual fund on May 24, 2013.
The announcement of the conversion was discussed on PrefBlog.
Of far greater interest was a new visitor to my garden:
Click for Big
Click for Big
It was another negative day for the Canadian preferred share market, with PerpetualPremiums losing 15bp, FixedResets off 6bp and DeemedRetractibles down 9bp. Volatility was minimal – the only highlight is RY.PR.H, which was called today. Volume was high.
| 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 | 0.6414 % | 2,548.0 |
| FixedFloater | 3.92 % | 3.15 % | 40,072 | 18.76 | 1 | 0.2479 % | 4,195.7 |
| Floater | 2.73 % | 2.97 % | 77,718 | 19.75 | 4 | 0.6414 % | 2,751.2 |
| OpRet | 4.82 % | 1.00 % | 68,765 | 0.09 | 5 | 0.1165 % | 2,617.4 |
| SplitShare | 4.63 % | 4.16 % | 99,884 | 4.06 | 6 | 0.0386 % | 2,986.0 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.1165 % | 2,393.4 |
| Perpetual-Premium | 5.21 % | 3.82 % | 97,837 | 0.74 | 32 | -0.1494 % | 2,374.7 |
| Perpetual-Discount | 4.90 % | 4.96 % | 198,075 | 15.47 | 4 | -0.4291 % | 2,655.9 |
| FixedReset | 4.89 % | 2.71 % | 244,741 | 3.31 | 81 | -0.0589 % | 2,516.6 |
| Deemed-Retractible | 4.90 % | 3.60 % | 139,004 | 1.43 | 44 | -0.0949 % | 2,456.0 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| RY.PR.H | Deemed-Retractible | -1.10 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2013-06-29 Maturity Price : 26.00 Evaluated at bid price : 26.10 Bid-YTW : 1.84 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| CGI.PR.D | SplitShare | 435,750 | new issue settled today. YTW SCENARIO Maturity Type : Soft Maturity Maturity Date : 2023-06-14 Maturity Price : 25.00 Evaluated at bid price : 25.25 Bid-YTW : 3.65 % |
| GWO.PR.N | FixedReset | 120,350 | National crossed blocks of 75,000 and 39,400, both at 24.82. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.72 Bid-YTW : 2.97 % |
| SLF.PR.F | FixedReset | 115,300 | National crossed 75,000 at 25.89 and bought 20,000 from RBC at the same price. RBC crossed 13,200 at the same price again. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-06-30 Maturity Price : 25.00 Evaluated at bid price : 25.88 Bid-YTW : 2.25 % |
| TRP.PR.D | FixedReset | 105,457 | Scotia crossed blocks of 25,000 and 60,000, both at 25.90. YTW SCENARIO Maturity Type : Call Maturity Date : 2019-04-30 Maturity Price : 25.00 Evaluated at bid price : 25.85 Bid-YTW : 3.44 % |
| TD.PR.Q | Deemed-Retractible | 103,400 | RBC crossed 98,300 at 26.60. YTW SCENARIO Maturity Type : Call Maturity Date : 2013-06-29 Maturity Price : 26.00 Evaluated at bid price : 26.53 Bid-YTW : -13.38 % |
| BNS.PR.T | FixedReset | 54,087 | Scotia crossed 25,000 at 26.05. Nesbitt crossed 25,000 at the same price. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-04-25 Maturity Price : 25.00 Evaluated at bid price : 26.01 Bid-YTW : 2.28 % |
| There were 51 other index-included issues trading in excess of 10,000 shares. | |||
| Wide Spread Highlights | ||
| Issue | Index | Quote Data and Yield Notes |
| PWF.PR.P | FixedReset | Quote: 25.52 – 25.85 Spot Rate : 0.3300 Average : 0.2331 YTW SCENARIO |
| BAM.PF.C | Perpetual-Discount | Quote: 24.54 – 24.86 Spot Rate : 0.3200 Average : 0.2417 YTW SCENARIO |
| BAM.PR.N | Perpetual-Discount | Quote: 24.23 – 24.46 Spot Rate : 0.2300 Average : 0.1576 YTW SCENARIO |
| W.PR.H | Perpetual-Premium | Quote: 25.57 – 25.78 Spot Rate : 0.2100 Average : 0.1396 YTW SCENARIO |
| ELF.PR.H | Perpetual-Premium | Quote: 26.29 – 26.50 Spot Rate : 0.2100 Average : 0.1450 YTW SCENARIO |
| HSE.PR.A | FixedReset | Quote: 25.48 – 25.83 Spot Rate : 0.3500 Average : 0.2895 YTW SCENARIO |