I’m not sure what Spain’s debt maturity profile looks like – but there’s one good reason for issuing long-term debt:
Spain can’t continue much longer with its current high borrowing rates, the prime minister warned Wednesday as he urged a joint European response to keep the region’s debt problems from getting worse.
Mariano Rajoy and newly elected French President Francois Hollande, heading later in the evening to meet other European Union leaders, also stressed their commitment to keeping Greece in the euro despite its political uncertainty.
It was another mixed day for the Canadian preferred share market, with PerpetualPremiums gaining 9bp, FixedResets off 3bp and DeemedRetractibles losing 16bp. Volatility was average. Volume was above average.
PerpetualDiscounts now yield 5.16%, equivalent to 6.71% interest at the standard equivalency factor of 1.3x. Long corporate yields … are delayed.
Update: Long corporates are at about 4.40% (maybe just a hairsbreadth over), so the pre-tax interest-equivalent spread (in this context, the Seniority Spread) is now about 230bp, a sharp widening from the 210bp reported May 9.
| 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 | -0.2416 % | 2,460.7 |
| FixedFloater | 4.47 % | 3.84 % | 30,239 | 17.64 | 1 | -0.7470 % | 3,528.0 |
| Floater | 2.93 % | 2.96 % | 66,711 | 19.79 | 3 | -0.2416 % | 2,656.9 |
| OpRet | 4.81 % | 2.79 % | 47,120 | 1.07 | 5 | -0.0619 % | 2,497.1 |
| SplitShare | 5.27 % | -3.03 % | 52,037 | 0.56 | 4 | -0.0596 % | 2,709.8 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.0619 % | 2,283.4 |
| Perpetual-Premium | 5.45 % | 2.03 % | 73,256 | 0.64 | 25 | 0.0909 % | 2,227.6 |
| Perpetual-Discount | 5.10 % | 5.16 % | 86,836 | 15.11 | 8 | 0.0518 % | 2,431.1 |
| FixedReset | 5.07 % | 3.19 % | 187,535 | 2.19 | 68 | -0.0291 % | 2,392.0 |
| Deemed-Retractible | 4.98 % | 3.62 % | 168,457 | 2.73 | 45 | -0.1621 % | 2,318.6 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| BAM.PR.K | Floater | -2.04 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2042-05-23 Maturity Price : 17.78 Evaluated at bid price : 17.78 Bid-YTW : 2.98 % |
| SLF.PR.I | FixedReset | -1.31 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-12-31 Maturity Price : 25.00 Evaluated at bid price : 24.80 Bid-YTW : 4.40 % |
| BAM.PR.M | Perpetual-Discount | 1.18 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2042-05-23 Maturity Price : 22.74 Evaluated at bid price : 23.17 Bid-YTW : 5.18 % |
| BAM.PR.C | Floater | 1.36 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2042-05-23 Maturity Price : 17.90 Evaluated at bid price : 17.90 Bid-YTW : 2.96 % |
| BAM.PR.N | Perpetual-Discount | 1.53 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2042-05-23 Maturity Price : 22.84 Evaluated at bid price : 23.25 Bid-YTW : 5.16 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| PWF.PR.I | Perpetual-Premium | 196,260 | Nesbitt crossed blocks of 150,000 and 43,200, both at 25.50. YTW SCENARIO Maturity Type : Call Maturity Date : 2012-06-22 Maturity Price : 25.00 Evaluated at bid price : 25.50 Bid-YTW : -13.11 % |
| PWF.PR.R | Perpetual-Premium | 116,277 | Nesbitt crossed 112,900 at 25.90. YTW SCENARIO Maturity Type : Call Maturity Date : 2021-04-30 Maturity Price : 25.00 Evaluated at bid price : 25.85 Bid-YTW : 5.10 % |
| CM.PR.K | FixedReset | 86,465 | Nesbitt crossed 83,000 at 26.25. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-07-31 Maturity Price : 25.00 Evaluated at bid price : 26.23 Bid-YTW : 3.19 % |
| TD.PR.Y | FixedReset | 62,427 | Desjardins crossed 39,800 at 26.00. YTW SCENARIO Maturity Type : Call Maturity Date : 2013-10-31 Maturity Price : 25.00 Evaluated at bid price : 25.89 Bid-YTW : 2.81 % |
| BMO.PR.P | FixedReset | 61,741 | Nesbitt crossed 49,800 at 26.70. YTW SCENARIO Maturity Type : Call Maturity Date : 2015-02-25 Maturity Price : 25.00 Evaluated at bid price : 26.66 Bid-YTW : 2.88 % |
| RY.PR.P | FixedReset | 45,078 | Scotia crossed 10,000 at 26.50; RBC crossed 25,000 at the same price. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-02-24 Maturity Price : 25.00 Evaluated at bid price : 26.41 Bid-YTW : 2.94 % |
| There were 36 other index-included issues trading in excess of 10,000 shares. | |||
| Wide Spread Highlights | ||
| Issue | Index | Quote Data and Yield Notes |
| IAG.PR.F | Deemed-Retractible | Quote: 25.65 – 26.37 Spot Rate : 0.7200 Average : 0.4752 YTW SCENARIO |
| MFC.PR.A | OpRet | Quote: 25.12 – 25.49 Spot Rate : 0.3700 Average : 0.2487 YTW SCENARIO |
| CIU.PR.A | Perpetual-Discount | Quote: 24.53 – 25.00 Spot Rate : 0.4700 Average : 0.3510 YTW SCENARIO |
| NA.PR.P | FixedReset | Quote: 26.33 – 26.70 Spot Rate : 0.3700 Average : 0.2623 YTW SCENARIO |
| ENB.PR.D | FixedReset | Quote: 25.12 – 25.40 Spot Rate : 0.2800 Average : 0.1792 YTW SCENARIO |
| RY.PR.L | FixedReset | Quote: 26.04 – 26.34 Spot Rate : 0.3000 Average : 0.2181 YTW SCENARIO |
[…] PerpetualDiscounts now yield 5.15%, equivalent to 6.70% interest at the standard equivalency factor of 1.3x. Long Corporates now yield about 4.4%, so the pre-tax interest-equivalent spread is now about 230bp, unchanged from the figure reported May 23. […]