Barclays is buying back some Tier 1 Capital:
Barclays Plc (BARC), the U.K.’s second- largest bank by assets, offered to buy back as much as 2.5 billion pounds ($3.9 billion) of capital notes to improve the quality of the capital it holds.
The lender will offer to buy back the Tier 1 securities for a discount of as much as 30 percent to face value, London-based Barclays said in a statement today.
…
The “offers will enable the issuer to enhance further the quality of its capital structure through the reduction of non- Basel III compliant tier one capital and subsequent generation of additional core tier one capital,” Barclays said in the statement.
There may be a mass downgrade of Europe brewing:
Standard & Poor’s said Germany and France may be stripped of their AAA credit ratings as the debt crisis prompts 15 euro nations to be put on review for possible downgrade.
The euro area’s six AAA rated countries are among the nations to be placed on a negative outlook, and their credit ratings may be cut depending on the result of a summit of European Union leaders on Dec. 9, S&P said today in a statement. The euro reversed its gains and U.S. Treasuries rose earlier today after the Financial Times reported that the credit-ranking firm planned to reduce six AAA outlooks.
“Systemic stress in the eurozone has risen in recent weeks and reached such a level that a review of all eurozone sovereign ratings is warranted,” S&P said in a statement.
…
The firm said that ratings could be cut by one level for Austria, Belgium, Finland, Germany, Netherlands and Luxembourg, and by up to two notches for the other governments. The euro pared gains against the dollar, trading at $1.3401 per euro at 5:01 p.m. in New York after rising as high as $1.3487.S&P said it maintained the negative outlook for Cyprus, and Greece wasn’t put on “creditwatch.”
Even Japan’s getting a little desperate:
Japanese Finance Minister Jun Azumi will be rewarding investors who buy more than 10 million yen ($129,000) in reconstruction bonds with gold in the government’s latest attempt to bolster demand for the debt.
Individual investors who hold the bonds for three years will be eligible for a gold commemorative coin valued at 10,000 yen, the Finance Ministry said in Tokyo today. At 15.6 grams, (0.55 ounces), it would be worth about $948 based on prices for the precious metal. Only a limited number of coins will be issued, the Finance Ministry said in a statement.
DBRS has today confirmed the Issuer Rating of Brookfield Office Properties Canada (BOPC or the Trust) at BBB with a Stable trend. DBRS has also confirmed the Issuer Rating of BPO Properties Ltd. (BPO or the Company) at BBB and its Cumulative Redeemable Preferred Shares ratings at Pfd-3. The trends are Stable.
The confirmations follow BOPC’s announcement of the acquisition of the Canadian Office Fund portfolio (the Acquisition) from BPO for approximately $362 million, including assumed mortgages totaling approximately $140 million. DBRS expects BOPC to fund the balance of the Acquisition primarily with cash on hand and a drawdown on the Trust’s revolving credit facility. The Acquisition includes an undivided 25% interest in nine Class AA and Class A office properties, including such high-quality office properties as First Canadian Place in downtown Toronto and Jean Edmonds Towers, Place de Ville I and Place de Ville II in Ottawa.
The financial impact of the Acquisition is expected to result in BOPC’s leverage increasing to approximately 44.7% (debt-to-capital ratio based on fair value) from 42.0%, while EBITDA interest coverage is expected to improve to 2.50 times, which DBRS considers appropriate for the current rating category
The confirmation of BPO’s ratings reflects its 83.3% equity interest in BOPC and strong ownership by Brookfield Office Properties, Inc.
BPP has three issues of shares outstanding: BPP.PR.G (1.8-million shares); BPP.PR.J (3.8-million) and BPP.PR.M (2.8-million). These are the Amazing Shares That Would Not Die, having been issued by Royal Trustco in 1985, 1986 and 1986, respectively, and changing their name from Gentra to BPO Properties effective 2001-5-7, following a name change from Royal Trustco 1993-6-18.
It was an uneventful day for the Canadian preferred share market, with PerpetualDiscounts down 6bp, FixedResets off 2bp and DeemedRetractibles gaining 9bp. Volatility was muted, but positive. Volume was above average.
| 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 | 0.9390 % | 2,079.9 |
| FixedFloater | 4.95 % | 4.70 % | 33,968 | 17.00 | 1 | -0.9794 % | 3,116.2 |
| Floater | 3.19 % | 3.53 % | 65,447 | 18.39 | 3 | 0.9390 % | 2,245.7 |
| OpRet | 4.89 % | 1.01 % | 56,868 | 1.44 | 6 | 0.2179 % | 2,478.9 |
| SplitShare | 5.85 % | 6.73 % | 59,008 | 5.12 | 3 | 0.0427 % | 2,510.7 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.2179 % | 2,266.7 |
| Perpetual-Premium | 5.52 % | 2.75 % | 96,513 | 0.87 | 18 | 0.0762 % | 2,158.6 |
| Perpetual-Discount | 5.25 % | 5.18 % | 108,323 | 14.99 | 12 | -0.0554 % | 2,301.8 |
| FixedReset | 5.12 % | 3.09 % | 232,078 | 2.44 | 63 | -0.0232 % | 2,337.0 |
| Deemed-Retractible | 5.05 % | 4.45 % | 192,568 | 3.82 | 46 | 0.0900 % | 2,222.5 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| MFC.PR.A | OpRet | 1.24 % | YTW SCENARIO Maturity Type : Soft Maturity Maturity Date : 2015-12-18 Maturity Price : 25.00 Evaluated at bid price : 25.32 Bid-YTW : 3.73 % |
| MFC.PR.B | Deemed-Retractible | 1.57 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 21.99 Bid-YTW : 6.28 % |
| PWF.PR.A | Floater | 2.58 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-12-05 Maturity Price : 19.50 Evaluated at bid price : 19.50 Bid-YTW : 2.71 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| RY.PR.I | FixedReset | 93,781 | TD crossed 50,000 at 26.05; RBC crossed 20,000 at the same price. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-02-24 Maturity Price : 25.00 Evaluated at bid price : 26.05 Bid-YTW : 3.12 % |
| TD.PR.K | FixedReset | 61,671 | Scotia crossed 52,500 at 27.30. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-07-31 Maturity Price : 25.00 Evaluated at bid price : 27.25 Bid-YTW : 2.96 % |
| BNS.PR.Q | FixedReset | 60,076 | Desjardins crossed blocks of 13,900 and 10,000, both at 25.90. TD crossed 14,800 at the same price. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 25.88 Bid-YTW : 3.12 % |
| MFC.PR.D | FixedReset | 58,912 | RBC crossed 49,000 at 26.49. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-06-19 Maturity Price : 25.00 Evaluated at bid price : 26.41 Bid-YTW : 4.17 % |
| FTS.PR.C | OpRet | 58,304 | TD bought blocks of 10,000 and 36,900 from anonymous at 25.68. YTW SCENARIO Maturity Type : Call Maturity Date : 2012-01-04 Maturity Price : 25.50 Evaluated at bid price : 25.68 Bid-YTW : -2.51 % |
| ENB.PR.D | FixedReset | 56,414 | Recent new issue. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-12-05 Maturity Price : 23.14 Evaluated at bid price : 25.11 Bid-YTW : 3.67 % |
| There were 38 other index-included issues trading in excess of 10,000 shares. | |||
| Wide Spread Highlights | ||
| Issue | Index | Quote Data and Yield Notes |
| NA.PR.M | Deemed-Retractible | Quote: 26.86 – 27.18 Spot Rate : 0.3200 Average : 0.2054 YTW SCENARIO |
| PWF.PR.O | Perpetual-Premium | Quote: 26.04 – 26.39 Spot Rate : 0.3500 Average : 0.2487 YTW SCENARIO |
| NA.PR.P | FixedReset | Quote: 27.00 – 27.33 Spot Rate : 0.3300 Average : 0.2309 YTW SCENARIO |
| TD.PR.I | FixedReset | Quote: 27.11 – 27.29 Spot Rate : 0.1800 Average : 0.1009 YTW SCENARIO |
| ELF.PR.F | Perpetual-Discount | Quote: 23.15 – 23.45 Spot Rate : 0.3000 Average : 0.2310 YTW SCENARIO |
| BAM.PR.R | FixedReset | Quote: 26.30 – 26.64 Spot Rate : 0.3400 Average : 0.2762 YTW SCENARIO |