July 26, 2007

The day ended, at long last, with not just a sound thumping for US Equities, but just about everybody else as well, including Canada.

Liquidity in the US Corporate markets was terrible (worse than yesterday), with marked spread-widening after yet another blown-up hedge fund, but there is some steepening developing with expectations the Fed will cut rates this year. The housing numbers are getting blamed for this in some quarters. Me, I’m not sure. There’s never just one reason. Weak (non-housing) economic news and Junk Bond Fatigue have also been blamed.

Still, at least Treasuries and Canadas had a good day, although the CAD got whacked.

More mundanely, the quarterly results from Loblaws seem to argue against any imminent reversal of the Weston downgrade. And I couldn’t resist checking the definitive BCE / Teachers’ Agreement:

6.4(9): The Purchaser acknowledges and agrees that its obtaining financing is not a condition to any of its obligations hereunder, regardless of the reasons why financing is not obtained or whether such reasons are within or beyond the control of the Purchaser. For the avoidance of doubt, if any financing referred to in this Section 6.4 is not obtained, the Purchaser will continue to be obligated to consummate the Arrangement, subject to and on the terms contemplated by this Agreement.

The PerpetualDiscount index had a nine-day winning streak snapped – but not by much, as the preferred market displayed its customary insouciance towards silly old market news. BCE issues, particularly, did quite well. The Ratchet Rate Index, comprised entirely of Bell Ratchets, kept its streak alive with ten-straight. The volume certainly wasn’t heavy today, but it wasn’t too much on the light side.

Note that these indices are experimental; the absolute and relative daily values are expected to change in the final version. In this version, index values are based at 1,000.0 on 2006-6-30
Index Mean Current Yield (at bid) Mean YTW Mean Average Trading Value Mean Mod Dur (YTW) Issues Day’s Perf. Index Value
Ratchet 4.98% 4.99% 24,636 15.46 2 +0.5965% 1,038.6
Fixed-Floater 4.97% 5.18% 136,047 15.28 8 +0.1292% 1,017.9
Floater 4.86% 2.59% 79,599 11.53 4 -0.0900% 1,047.4
Op. Retract 4.83% 4.03% 85,083 3.19 16 +0.0973% 1,021.5
Split-Share 5.05% 4.57% 107,030 3.89 17 -0.1013% 1,047.0
Interest Bearing 6.21% 6.53% 64,224 4.40 3 -0.1673% 1,038.0
Perpetual-Premium 5.53% 5.18% 116,729 5.79 26 +0.0061% 1,023.6
Perpetual-Discount 5.09% 5.11% 343,200 15.32 38 -0.0001% 972.9
Major Price Changes
Issue Index Change Notes
BAM.PR.N PerpetualDiscount -3.0345% Now with a pre-tax bid-YTW of 5.70% based on a bid of 21.09 and a limitMaturity.
WFS.PR.A SplitShare -1.1639% Now with a pre-tax bid-YTW of 4.85% based on a bid of 10.19 and a hardMaturity 2011-6-30 at 10.00.
Volume Highlights
Issue Index Volume Notes
SLF.PR.B PerpetualDiscount 47,250 Now with a pre-tax bid-YTW of 4.97% based on a bid of 24.33 and a limitMaturity.
BMO.PR.G OpRet 31,681 Has been called for redemption.
CM.PR.I PerpetualDiscount 23,163 Now with a pre-tax bid-YTW of 5.11% based on a bid of 23.10 and a limitMaturity.
POW.PR.D PerpetualDiscount 22,414 Now with a pre-tax bid-YTW of 5.24% based on a bid of 24.00 and a limitMaturity. There’s not much room for a capital gain on this one, but the yield looks juicy, eh?
BNS.PR.L PerpetualDiscount 21,635 Now with a pre-tax bid-YTW of 5.00% based on a bid of 22.62 and a limitMaturity.

There were fifteen other $25-equivalent index-included issues trading over 10,000 shares today.

One Response to “July 26, 2007”

  1. […] On July 26, I had to admit: I couldn’t resist checking the definitive BCE / Teachers’ Agreement:  6.4(9): The Purchaser acknowledges and agrees that its obtaining financing is not a condition to any of its obligations hereunder, regardless of the reasons why financing is not obtained or whether such reasons are within or beyond the control of the Purchaser. For the avoidance of doubt, if any financing referred to in this Section 6.4 is not obtained, the Purchaser will continue to be obligated to consummate the Arrangement, subject to and on the terms contemplated by this Agreement. […]

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