Aston Hill is looking for a buyer:
Executives at Aston Hill Financial Inc. have been shopping their firm to other asset managers, hoping to find a buyer.
Over the past two months, senior employees at Aston Hill have reached out to several Canadian firms and expressed interest in selling their company, according to multiple people familiar with the discussions.
The overtures have been made at a volatile time for the company, which recently lost a high profile mandate to manage $2.2-billion worth of funds for IA Clarington Investments Inc. which prompted Aston Hill to slash its dividend.
In January 2011, Aston Hill renamed its subsidiary, Catapult Financial Management Inc. to Aston Hill Investments Inc.
Catapult was mentioned on PrefBlog in February 2009 as offering a closed-end actively managed preferred share fund, Preferred Share Investment Trust. This fund now has $68.1-million under management and is still managed by Aston Hill Investments Inc. Performance has been disappointing.
It was another poor day for the Canadian preferred share market, with PerpetualDiscounts off 13bp, FixedResets losing 27bp and DeemedRetractibles down 15bp. The lengthy Performance Highlights table is dominated by losing FixedResets. Volume was extremely high.
For as long as the FixedReset market is so violently unsettled, I’ll keep publishing updates of the more interesting and meaningful series of FixedResets’ Implied Volatilities. This doesn’t include Enbridge because although Enbridge has a large number of issues outstanding, all of which are quite liquid, the range of Issue Reset Spreads is too small for decent conclusions. The low is 212bp (ENB.PR.H; second-lowest is ENB.PR.D at 237bp) and the high is a mere 268 for ENB.PF.G.
Remember that all rich /cheap assessments are:
» based on Implied Volatility Theory only
» are relative only to other FixedResets from the same issuer
» assume constant GOC-5 yield
» assume constant Implied Volatility
» assume constant spread
Here’s TRP:
Click for Big
TRP.PR.E, which resets 2019-10-30 at +235, is bid at 22.96 to be $1.11 rich, while TRP.PR.B, resetting 2015-6-30 at +128, is $0.98 cheap at its bid price of 13.50.
Click for Big
Another excellent fit, but the numbers are perplexing. Implied Volatility for MFC continues to be a conundrum, although it declined substantially today. It is still too high if we consider that NVCC rules will never apply to these issues; it is still too low if we consider them to be NVCC non-compliant issues (and therefore with Deemed Maturities in the call schedule).
Most expensive is MFC.PR.J, resetting at +261 on 2018-3-19, bid at 24.30 to be $0.49 rich, while MFC.PR.K, resetting at +222bp on 2018-9-19, is bid at 25.12 to be $0.70 cheap.
Click for Big
The cheapest issue relative to its peers is BAM.PR.R, resetting at +230bp on 2016-6-30, bid at 19.06 to be $0.56 cheap. BAM.PF.G, resetting at +284bp 2020-6-30 is bid at 23.61 and appears to be $0.57 rich.
Click for Big
This is just weird because the middle is expensive and the ends are cheap but anyway … FTS.PR.H, with a spread of +145bp, and bid at 15.25, looks $1.01 cheap and resets 2015-6-1. FTS.PR.K, with a spread of +205bp and resetting 2019-3-1, is bid at 21.05 and is $0.46 rich.
Click for Big
Investment-grade pairs other than TRP.PR.A / TRP.PR.F now predict an average over the next five years of about 0.30%, up marginally on the day. TRP.PR.A / TRP.PR.F remains an outlier, predicting 0.70%. The DC.PR.B / DC.PR.D pair is still off the charts and now predicts an average bill rate over the next 4 3/4 years of -1.29%.
Click for Big
Shall we just say that this exhibits a high level of confidence in the continued rapacity of Canadian banks?
| 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 | 1.2637 % | 2,211.4 |
| FixedFloater | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 1.2637 % | 3,866.6 |
| Floater | 3.28 % | 3.41 % | 58,156 | 18.74 | 4 | 1.2637 % | 2,350.9 |
| OpRet | 4.43 % | -1.59 % | 38,516 | 0.13 | 2 | 0.0000 % | 2,762.1 |
| SplitShare | 4.58 % | 4.57 % | 62,057 | 3.42 | 3 | -0.0668 % | 3,219.8 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.0000 % | 2,525.6 |
| Perpetual-Premium | 5.33 % | -0.12 % | 64,639 | 0.08 | 25 | -0.1598 % | 2,516.0 |
| Perpetual-Discount | 5.15 % | 5.08 % | 145,758 | 14.91 | 9 | -0.1327 % | 2,770.9 |
| FixedReset | 4.61 % | 3.80 % | 263,395 | 16.35 | 85 | -0.2724 % | 2,316.5 |
| Deemed-Retractible | 4.90 % | 2.38 % | 106,875 | 0.16 | 36 | -0.1484 % | 2,653.8 |
| FloatingReset | 2.54 % | 2.99 % | 77,851 | 6.25 | 8 | -0.0535 % | 2,344.0 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| BAM.PF.E | FixedReset | -4.39 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2045-04-16 Maturity Price : 21.56 Evaluated at bid price : 21.56 Bid-YTW : 4.21 % |
| MFC.PR.K | FixedReset | -2.50 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 21.46 Bid-YTW : 5.24 % |
| TRP.PR.E | FixedReset | -2.30 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2045-04-16 Maturity Price : 22.28 Evaluated at bid price : 22.96 Bid-YTW : 3.63 % |
| TRP.PR.D | FixedReset | -1.67 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2045-04-16 Maturity Price : 21.98 Evaluated at bid price : 22.42 Bid-YTW : 3.68 % |
| CU.PR.C | FixedReset | -1.50 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2045-04-16 Maturity Price : 23.27 Evaluated at bid price : 24.31 Bid-YTW : 3.31 % |
| BMO.PR.W | FixedReset | -1.44 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2045-04-16 Maturity Price : 22.80 Evaluated at bid price : 24.00 Bid-YTW : 3.25 % |
| CU.PR.E | Perpetual-Premium | -1.12 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2045-04-16 Maturity Price : 24.29 Evaluated at bid price : 24.72 Bid-YTW : 5.00 % |
| IFC.PR.C | FixedReset | -1.06 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.30 Bid-YTW : 3.94 % |
| FTS.PR.M | FixedReset | -1.04 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2045-04-16 Maturity Price : 22.69 Evaluated at bid price : 23.75 Bid-YTW : 3.59 % |
| SLF.PR.H | FixedReset | -1.02 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 20.39 Bid-YTW : 5.62 % |
| FTS.PR.G | FixedReset | 1.09 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2045-04-16 Maturity Price : 21.35 Evaluated at bid price : 21.35 Bid-YTW : 3.64 % |
| CIU.PR.C | FixedReset | 1.49 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2045-04-16 Maturity Price : 16.30 Evaluated at bid price : 16.30 Bid-YTW : 3.46 % |
| BAM.PR.B | Floater | 1.94 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2045-04-16 Maturity Price : 14.70 Evaluated at bid price : 14.70 Bid-YTW : 3.41 % |
| BAM.PR.C | Floater | 2.30 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2045-04-16 Maturity Price : 14.65 Evaluated at bid price : 14.65 Bid-YTW : 3.42 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| RY.PR.J | FixedReset | 152,806 | RBC crossed 90,000 at 25.02. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2045-04-16 Maturity Price : 23.12 Evaluated at bid price : 24.90 Bid-YTW : 3.47 % |
| TD.PF.C | FixedReset | 131,600 | TD crossed 120,000 at 24.04. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2045-04-16 Maturity Price : 22.66 Evaluated at bid price : 23.71 Bid-YTW : 3.29 % |
| BIP.PR.A | FixedReset | 88,298 | TD crossed two blocks of 40,000 each, both at 24.60. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2045-04-16 Maturity Price : 22.97 Evaluated at bid price : 24.50 Bid-YTW : 4.42 % |
| NA.PR.W | FixedReset | 80,400 | TD crossed 70,000 at 24.40. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2045-04-16 Maturity Price : 22.91 Evaluated at bid price : 24.30 Bid-YTW : 3.20 % |
| TD.PF.D | FixedReset | 73,200 | RBC crossed 25,000 at 24.80. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2045-04-16 Maturity Price : 23.03 Evaluated at bid price : 24.67 Bid-YTW : 3.53 % |
| TRP.PR.G | FixedReset | 70,700 | Desjardins crossed 50,000 at 24.87. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2045-04-16 Maturity Price : 23.07 Evaluated at bid price : 24.85 Bid-YTW : 3.69 % |
| There were 69 other index-included issues trading in excess of 10,000 shares. | |||
| Wide Spread Highlights | ||
| Issue | Index | Quote Data and Yield Notes |
| MFC.PR.K | FixedReset | Quote: 21.46 – 22.14 Spot Rate : 0.6800 Average : 0.4802 YTW SCENARIO |
| CU.PR.D | Perpetual-Premium | Quote: 24.80 – 25.21 Spot Rate : 0.4100 Average : 0.2512 YTW SCENARIO |
| MFC.PR.N | FixedReset | Quote: 22.79 – 23.49 Spot Rate : 0.7000 Average : 0.5427 YTW SCENARIO |
| TD.PF.C | FixedReset | Quote: 23.71 – 24.14 Spot Rate : 0.4300 Average : 0.2890 YTW SCENARIO |
| BAM.PR.X | FixedReset | Quote: 16.46 – 16.89 Spot Rate : 0.4300 Average : 0.2895 YTW SCENARIO |
| NA.PR.M | Deemed-Retractible | Quote: 25.61 – 25.94 Spot Rate : 0.3300 Average : 0.2081 YTW SCENARIO |