November 21, 2012

Olam is fighting back against Muddy Waters:

Olam International Ltd. (OLMIF), the world’s second-largest rice trader, filed a lawsuit against investment firm Muddy Waters LLC and its founder Carson Block after he questioned the commodity trader’s accounting methods.

The legal action was initiated in the High Court of Singapore following Block’s statements against the company at a conference in London on Nov. 19, Olam said yesterday in a regulatory filing. The suit, which couldn’t immediately be confirmed in the court, is for slander, libel and/or malicious falsehood, Olam’s spokesman Aditya Renjen said. He declined to comment on the size of the damages sought.

A war of words between Olam and Block began when the Muddy Waters research director accused the Singapore-based company of booking profits on transactions before it’s clear how they would work out over time. Olam Chief Executive Officer Sunny Verghese said on Nov. 20 the statements were designed to panic shareholders of the company.

I see that Joe Fontana has been charged with fraud:

Mayor Joe Fontana is facing three criminal charges relating to a federal cheque that paid the deposit on the 2005 wedding reception for his son Michael, his lawyer says.

The charges of fraud, breach of trust by a public official and uttering forged documents were filed against him Wednesday by the Royal Canadian Mounted Police following an investigation of more than two months.

They relate to a $1,700 cheque issued by Public Works Canada that was used to pay the Marconi Club — a London social club. A copy of the stub from that cheque was obtained by QMI Agency and published five weeks ago. The invoice number on the cheque stub, dated April 6, 2005, matched that of the Marconi Club invoice issued about six months earlier.

A former Marconi Club manager told QMI Agency Fontana later produced a similar cheque for the $18,900 balance owing. He said he remembered the payment clearly because he had to chase Fontana six months to get it.

At the time, Fontana was a Liberal mMember of Parliament for London North Centre and federal minister of labour and housing. He was elected mayor here in late 2010 and is midway through his four-year term.

Fontana was my MP when I lived in London. I called him once to express my irritation with a call received from a federal agency that was trying to track down some other Hymas (not even a relation. They had no reason other than my name to call me) … I told him that I resented being considered an informer by government agencies on fishing expeditions. He got angry with me – perhaps he’d just returned from a ‘Bring the STASI to Canada’ meeting – and told me that I had a duty to help out my government.

Have a nice time with your defence, Joe! Remember your duty to help out your government!

It was a good day for the Canadian preferred share market, with PerpetualPremiums gaining 2bp, FixedResets up 9bp and DeemedRetractibles winning 27bp. Volatility was average. Volume was quite good and all the highlighted issues are FixedResets.

PerpetualDiscounts now yield 4.89%, equivalent to 6.36% interest at the standard equivalency factor of 1.3x. Long Corporates now yield a little over 4.25%, so the pre-tax interest-equivalent spread (in this context, the “Seniority Spread”) is now about 210bp, a narrowing from the 220bp reported November 14 and equal to the spread paid by CIU with their recent 40-year deal.

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 0.1072 % 2,458.2
FixedFloater 4.17 % 3.52 % 28,660 18.27 1 0.2643 % 3,855.0
Floater 2.81 % 3.01 % 53,471 19.66 4 0.1072 % 2,654.2
OpRet 4.60 % 2.55 % 57,713 0.59 4 0.1236 % 2,594.1
SplitShare 5.45 % 4.80 % 58,759 4.47 3 -0.2908 % 2,852.8
Interest-Bearing 0.00 % 0.00 % 0 0.00 0 0.1236 % 2,372.0
Perpetual-Premium 5.26 % 2.43 % 72,831 0.87 30 0.0226 % 2,315.4
Perpetual-Discount 4.85 % 4.89 % 100,560 15.59 3 0.1227 % 2,623.1
FixedReset 4.99 % 3.01 % 199,670 4.19 75 0.0934 % 2,447.4
Deemed-Retractible 4.90 % 3.31 % 123,659 0.50 46 0.2742 % 2,404.3
Performance Highlights
Issue Index Change Notes
BNA.PR.C SplitShare -1.03 % YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2019-01-10
Maturity Price : 25.00
Evaluated at bid price : 24.10
Bid-YTW : 5.03 %
GWO.PR.J FixedReset 1.00 % YTW SCENARIO
Maturity Type : Call
Maturity Date : 2013-12-31
Maturity Price : 25.00
Evaluated at bid price : 26.26
Bid-YTW : 2.18 %
MFC.PR.F FixedReset 1.03 % YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2022-01-31
Maturity Price : 25.00
Evaluated at bid price : 24.50
Bid-YTW : 3.54 %
HSB.PR.D Deemed-Retractible 1.13 % YTW SCENARIO
Maturity Type : Call
Maturity Date : 2012-12-31
Maturity Price : 25.50
Evaluated at bid price : 25.90
Bid-YTW : -2.95 %
Volume Highlights
Issue Index Shares
Traded
Notes
SLF.PR.F FixedReset 214,270 TD crossed three blocks: 70,000 and 100,000 at 26.45 and 39,400 at 26.50.
YTW SCENARIO
Maturity Type : Call
Maturity Date : 2014-06-30
Maturity Price : 25.00
Evaluated at bid price : 26.45
Bid-YTW : 2.84 %
BNS.PR.R FixedReset 182,667 Nesbitt crossed blocks of 85,000 and 50,000, both at 25.25; RBC crossed 19,000 at the same price.
YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2022-01-31
Maturity Price : 25.00
Evaluated at bid price : 25.26
Bid-YTW : 3.34 %
TD.PR.A FixedReset 148,648 TD crossed 147,000 at 25.60.
YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2022-01-31
Maturity Price : 25.00
Evaluated at bid price : 25.56
Bid-YTW : 3.25 %
BMO.PR.Q FixedReset 125,048 National crossed 100,000 at 25.15.
YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2022-01-31
Maturity Price : 25.00
Evaluated at bid price : 25.12
Bid-YTW : 3.01 %
BMO.PR.M FixedReset 111,810 TD crossed 85,900 at 25.01.
YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2022-01-31
Maturity Price : 25.00
Evaluated at bid price : 24.95
Bid-YTW : 3.13 %
CIU.PR.B FixedReset 94,826 National crossed three blocks: 40,400 shares, 35,000 and 15,400, all at 26.72.
YTW SCENARIO
Maturity Type : Call
Maturity Date : 2014-06-01
Maturity Price : 25.00
Evaluated at bid price : 26.67
Bid-YTW : 2.14 %
There were 37 other index-included issues trading in excess of 10,000 shares.
Wide Spread Highlights
Issue Index Quote Data and Yield Notes
IAG.PR.C FixedReset Quote: 25.60 – 26.05
Spot Rate : 0.4500
Average : 0.2664

YTW SCENARIO
Maturity Type : Call
Maturity Date : 2013-12-31
Maturity Price : 25.00
Evaluated at bid price : 25.60
Bid-YTW : 3.38 %

IAG.PR.G FixedReset Quote: 25.70 – 25.96
Spot Rate : 0.2600
Average : 0.1452

YTW SCENARIO
Maturity Type : Call
Maturity Date : 2017-06-30
Maturity Price : 25.00
Evaluated at bid price : 25.70
Bid-YTW : 3.54 %

MFC.PR.D FixedReset Quote: 26.48 – 26.79
Spot Rate : 0.3100
Average : 0.2090

YTW SCENARIO
Maturity Type : Call
Maturity Date : 2014-06-19
Maturity Price : 25.00
Evaluated at bid price : 26.48
Bid-YTW : 2.45 %

BMO.PR.L Deemed-Retractible Quote: 26.66 – 26.88
Spot Rate : 0.2200
Average : 0.1333

YTW SCENARIO
Maturity Type : Call
Maturity Date : 2013-05-25
Maturity Price : 26.00
Evaluated at bid price : 26.66
Bid-YTW : 0.42 %

BAM.PR.K Floater Quote: 17.45 – 17.71
Spot Rate : 0.2600
Average : 0.1800

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2042-11-21
Maturity Price : 17.45
Evaluated at bid price : 17.45
Bid-YTW : 3.03 %

MFC.PR.C Deemed-Retractible Quote: 23.94 – 24.20
Spot Rate : 0.2600
Average : 0.1846

YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2022-01-31
Maturity Price : 25.00
Evaluated at bid price : 23.94
Bid-YTW : 5.07 %

One Response to “November 21, 2012”

  1. […] PerpetualDiscounts now yield 4.89%, equivalent to 6.36% interest at the standard equivalency factor of 1.3x. Long Corporates now yield about 4.2%, so the pre-tax interest-equivalent spread (in this context, the “Seniority Spread”) is now about 215bp, a small (and perhaps spurious) increase from the 210bp reported November 21. […]

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