The market appeared to disdain the Yellow Pages Group new issue, as it dropped well below the issue to close at 24.63-65, 50×14, on heavy volume of 757,556 shares. The YPG bonds, 5.25% of Feb 2016 are now indicated at Canada 4.5/15 + 146bp, call it about 5.44% at last night’s close. So the bonds have improved since announcement date – even though they’ve widened. Can’t blame the bond market for this one!
| Curve Price & Comparables for YPG.PR.A | ||||
| Item | YPG.PR.A | BNA.PR.C | BAM.PR.J | CFS.PR.A |
| Price due to base-rate | 24.11 | 23.85 | 26.53 | 9.89 |
| Price due to short-term | -0.39 | -0.47 | -0.50 | -0.14 |
| Price due to long-term | 1.41 | 1.70 | 1.79 | 0.52 |
| Price to to Cumulative Dividends | 0.00 | 0.00 | 0.00 | 0.00 |
| Price due to SplitShareCorp | 0.00 | -1.21 | 0.00 | -0.22 |
| Price due to Retractibility | 0.73 | 1.34 | 1.33 | 0.25 |
| Price due to Liquidity | 0.49 | 0.90 | -0.13 | 0.17 |
| Price due to Credit Spread (2) | 0.00 | -0.32 | -0.32 | 0.00 |
| Price due to Credit Spread (3) | -0.54 | 0.00 | 0.00 | 0.00 |
| Price due to Credit Spread (High) | 0.00 | 0.00 | 0.00 | 0.00 |
| Price due to Credit Spread (Low) | 0.00 | 0.00 | -0.30 | 0.00 |
| Price due to error | 0.01 | 0.07 | 0.04 | 0.00 |
| Curve Price (Taxable Curve) | $25.80 | $25.84 | $28.44 | $10.47 |
| DBRS Credit Rating | Pfd-3(high) | Pfd-2 | Pfd-2(low) | Pfd-1 |
| Quote, 3/6 | $24.63-65 | 24.77-84 | 27.96-12 | $10.15-25 |
| YTW (After Tax – bid) | 3.62% | 3.56% | 3.29% | 3.19% |
| Modified Duration (YTW – after tax) | 5.22 | 9.61 | 6.13 | 4.47 |
| Pseudo-Convexity (YTW – after tax) | 0.38 | 0.40 | -10.95 | 0.47 |
| YTW (Pre-tax) | 4.56% | 4.47% | 4.14% | 4.01% |
Naturally, this issue is more attractive at 24.65 than it was at 25.00 … but I’ll remind potential purchasers again: it’s only a Pfd-3(high) credit, so it should be included in portfolios only as spice, not as core!
The issue has been added to the HIMIPref™ database with the securityCode A56000. A reorgDataEntry has been input to record the transition from the preIssue code of P50011.
As a Pfd-3(high) issue by DBRS, this issue is not eligible for inclusion in the HIMIPref™ indices.
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