May 20, 2016

May 21st, 2016

EMA wants to issue new preferreds; Barry Critchley points out they’ll have to pay up relative to their last round:

This week Emera took another step on the way to rounding up the cash need to fund the US$10.4 billion acquisition of TECO Energy.

Emera, which expects to close the acquisition by mid-year, raised $544 million from the sale of most of its stake in Algonquin Power & Utilities Corp. After the share sale, Emera — which is expected to receive the second instalment of a $2.185 billion offering of convertible debentures when the TECO deal gets the final green light — will own about five per cent of Algonquin.

But lots of capital still needs to be raised — even if it seems that all the common equity has been obtained. In a presentation unveiled this week, Emera indicated it is seeking between US$3.4 billion and US$3.8 billion of debt (the US$10.4 billion acquisition cost includes US$3.9 billion of assumed debt). It is also after US$0.8 billion to US$1.2 billion in either preferred equity or hybrid securities.

Emera last issued rate reset preferred shares in May 2014 when it raised $200 million at a yield of 4.25 per cent. At 4.25 per cent, the coupon represented a spread of 263 basis points above comparable five-year Canada bonds.

Next time out Emera will find that the preferred share market has changed in two ways.

IGM Financial has bought a piece of a robo-advisor:

IGM Financial Inc. has closed a $50 million (U.S.) investment in Personal Capital Corporation, a market-leading digital wealth advisor based in the U.S., with an agreement to invest an additional $25 million (U.S.) in the next year for a total of $75 million (U.S.). This would result in an initial 10% ownership stake increasing to 15% within 12 months, with the remaining interest owned by Personal Capital’s management team and existing investors.

Personal Capital’s approach to wealth management – combining dedicated financial advisors with innovative customer-facing technology – is unique in the industry. Led by a market-leading and experienced team with a long track record in financial services, Personal Capital has been growing rapidly in the mass affluent and high net worth investor segments of the market, offering a unique, compelling and valuable proposition for its clients.

This is kind of interesting, since IGM’s parent, PWF, already has a piece of WealthSimple, as discussed April 9, 2015.

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 4.66 % 5.66 % 11,568 17.06 1 0.6944 % 1,693.7
FixedFloater 6.74 % 5.85 % 18,988 16.65 1 -2.7586 % 2,999.6
Floater 4.51 % 4.72 % 44,505 15.95 4 0.4317 % 1,720.6
OpRet 0.00 % 0.00 % 0 0.00 0 -0.2390 % 2,818.4
SplitShare 4.97 % 5.28 % 80,228 3.94 7 -0.2390 % 3,298.0
Interest-Bearing 0.00 % 0.00 % 0 0.00 0 -0.2390 % 2,573.3
Perpetual-Premium 5.76 % -9.92 % 78,517 0.09 6 0.0853 % 2,600.2
Perpetual-Discount 5.48 % 5.57 % 102,014 14.50 33 0.1460 % 2,678.9
FixedReset 5.21 % 4.64 % 166,452 13.84 88 0.3126 % 1,963.9
Deemed-Retractible 5.12 % 5.47 % 132,034 5.01 33 0.1175 % 2,680.1
FloatingReset 3.20 % 5.00 % 26,016 5.27 17 0.0351 % 2,089.6
Performance Highlights
Issue Index Change Notes
TRP.PR.I FloatingReset -4.76 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-20
Maturity Price : 11.00
Evaluated at bid price : 11.00
Bid-YTW : 4.79 %
BAM.PR.G FixedFloater -2.76 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-20
Maturity Price : 25.00
Evaluated at bid price : 14.10
Bid-YTW : 5.85 %
SLF.PR.H FixedReset -1.99 % YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 16.27
Bid-YTW : 8.94 %
ALB.PR.C SplitShare -1.11 % YTW SCENARIO
Maturity Type : Call
Maturity Date : 2017-02-28
Maturity Price : 25.67
Evaluated at bid price : 25.76
Bid-YTW : 4.10 %
TRP.PR.E FixedReset 1.01 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-20
Maturity Price : 17.98
Evaluated at bid price : 17.98
Bid-YTW : 4.67 %
TD.PR.S FixedReset 1.01 % YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2022-01-31
Maturity Price : 25.00
Evaluated at bid price : 22.95
Bid-YTW : 4.48 %
BAM.PF.B FixedReset 1.04 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-20
Maturity Price : 17.48
Evaluated at bid price : 17.48
Bid-YTW : 5.13 %
NA.PR.S FixedReset 1.07 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-20
Maturity Price : 18.01
Evaluated at bid price : 18.01
Bid-YTW : 4.64 %
TD.PR.Y FixedReset 1.09 % YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2022-01-31
Maturity Price : 25.00
Evaluated at bid price : 23.25
Bid-YTW : 4.42 %
BAM.PF.F FixedReset 1.13 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-20
Maturity Price : 19.62
Evaluated at bid price : 19.62
Bid-YTW : 4.91 %
BAM.PF.E FixedReset 1.17 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-20
Maturity Price : 18.16
Evaluated at bid price : 18.16
Bid-YTW : 4.97 %
FTS.PR.K FixedReset 1.26 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-20
Maturity Price : 16.86
Evaluated at bid price : 16.86
Bid-YTW : 4.45 %
HSE.PR.C FixedReset 1.45 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-20
Maturity Price : 17.54
Evaluated at bid price : 17.54
Bid-YTW : 5.85 %
FTS.PR.M FixedReset 1.71 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-20
Maturity Price : 18.46
Evaluated at bid price : 18.46
Bid-YTW : 4.64 %
BAM.PR.X FixedReset 1.78 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-20
Maturity Price : 13.75
Evaluated at bid price : 13.75
Bid-YTW : 4.98 %
BAM.PR.T FixedReset 1.86 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-20
Maturity Price : 15.35
Evaluated at bid price : 15.35
Bid-YTW : 5.21 %
BAM.PF.A FixedReset 1.88 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-20
Maturity Price : 19.00
Evaluated at bid price : 19.00
Bid-YTW : 5.06 %
TRP.PR.A FixedReset 2.21 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-20
Maturity Price : 14.31
Evaluated at bid price : 14.31
Bid-YTW : 5.00 %
GWO.PR.O FloatingReset 3.85 % YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 13.50
Bid-YTW : 9.92 %
Volume Highlights
Issue Index Shares
Traded
Notes
TRP.PR.J FixedReset 112,180 YTW SCENARIO
Maturity Type : Call
Maturity Date : 2021-05-31
Maturity Price : 25.00
Evaluated at bid price : 25.76
Bid-YTW : 4.81 %
FTS.PR.K FixedReset 28,368 YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-20
Maturity Price : 16.86
Evaluated at bid price : 16.86
Bid-YTW : 4.45 %
TD.PF.C FixedReset 25,223 YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-20
Maturity Price : 18.00
Evaluated at bid price : 18.00
Bid-YTW : 4.44 %
NA.PR.X FixedReset 23,346 YTW SCENARIO
Maturity Type : Call
Maturity Date : 2021-05-15
Maturity Price : 25.00
Evaluated at bid price : 26.10
Bid-YTW : 4.64 %
TD.PF.G FixedReset 17,988 YTW SCENARIO
Maturity Type : Call
Maturity Date : 2021-04-30
Maturity Price : 25.00
Evaluated at bid price : 26.12
Bid-YTW : 4.57 %
TRP.PR.A FixedReset 17,950 YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-20
Maturity Price : 14.31
Evaluated at bid price : 14.31
Bid-YTW : 5.00 %
There were 22 other index-included issues trading in excess of 10,000 shares.
Wide Spread Highlights
Issue Index Quote Data and Yield Notes
BAM.PR.G FixedFloater Quote: 14.10 – 14.85
Spot Rate : 0.7500
Average : 0.4749

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-20
Maturity Price : 25.00
Evaluated at bid price : 14.10
Bid-YTW : 5.85 %

EML.PR.A FixedReset Quote: 25.82 – 26.58
Spot Rate : 0.7600
Average : 0.4894

YTW SCENARIO
Maturity Type : Call
Maturity Date : 2021-04-17
Maturity Price : 25.00
Evaluated at bid price : 25.82
Bid-YTW : 5.14 %

HSE.PR.B FloatingReset Quote: 10.35 – 11.28
Spot Rate : 0.9300
Average : 0.7073

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-20
Maturity Price : 10.35
Evaluated at bid price : 10.35
Bid-YTW : 5.58 %

ALB.PR.C SplitShare Quote: 25.76 – 26.50
Spot Rate : 0.7400
Average : 0.5897

YTW SCENARIO
Maturity Type : Call
Maturity Date : 2017-02-28
Maturity Price : 25.67
Evaluated at bid price : 25.76
Bid-YTW : 4.10 %

SLF.PR.J FloatingReset Quote: 13.00 – 13.45
Spot Rate : 0.4500
Average : 0.3312

YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 13.00
Bid-YTW : 10.60 %

SLF.PR.I FixedReset Quote: 19.43 – 19.94
Spot Rate : 0.5100
Average : 0.3929

YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 19.43
Bid-YTW : 7.15 %

May 19, 2016

May 20th, 2016
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 4.69 % 5.70 % 12,032 17.02 1 -0.4838 % 1,682.0
FixedFloater 6.55 % 5.68 % 19,121 16.86 1 1.0453 % 3,084.7
Floater 4.53 % 4.75 % 44,776 15.90 4 0.2163 % 1,713.2
OpRet 0.00 % 0.00 % 0 0.00 0 -0.0348 % 2,825.1
SplitShare 4.95 % 5.09 % 83,077 3.95 7 -0.0348 % 3,305.9
Interest-Bearing 0.00 % 0.00 % 0 0.00 0 -0.0348 % 2,579.4
Perpetual-Premium 5.76 % -11.01 % 78,310 0.09 6 0.0000 % 2,598.0
Perpetual-Discount 5.48 % 5.57 % 103,339 14.52 33 -0.0145 % 2,675.0
FixedReset 5.22 % 4.63 % 164,900 13.82 88 -0.1938 % 1,957.8
Deemed-Retractible 5.13 % 5.53 % 131,576 5.01 33 0.4175 % 2,677.0
FloatingReset 3.15 % 5.01 % 25,656 5.28 17 0.3984 % 2,088.9
Performance Highlights
Issue Index Change Notes
PWF.PR.Q FloatingReset -2.65 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-19
Maturity Price : 12.51
Evaluated at bid price : 12.51
Bid-YTW : 4.27 %
NA.PR.S FixedReset -2.30 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-19
Maturity Price : 17.82
Evaluated at bid price : 17.82
Bid-YTW : 4.59 %
TRP.PR.A FixedReset -1.89 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-19
Maturity Price : 14.00
Evaluated at bid price : 14.00
Bid-YTW : 4.99 %
CU.PR.C FixedReset -1.88 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-19
Maturity Price : 17.78
Evaluated at bid price : 17.78
Bid-YTW : 4.42 %
SLF.PR.G FixedReset -1.63 % YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 14.46
Bid-YTW : 9.50 %
BMO.PR.W FixedReset -1.39 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-19
Maturity Price : 17.79
Evaluated at bid price : 17.79
Bid-YTW : 4.34 %
BMO.PR.T FixedReset -1.38 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-19
Maturity Price : 17.85
Evaluated at bid price : 17.85
Bid-YTW : 4.35 %
TD.PF.A FixedReset -1.35 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-19
Maturity Price : 18.30
Evaluated at bid price : 18.30
Bid-YTW : 4.29 %
RY.PR.Z FixedReset -1.09 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-19
Maturity Price : 18.15
Evaluated at bid price : 18.15
Bid-YTW : 4.25 %
NA.PR.W FixedReset -1.01 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-19
Maturity Price : 17.57
Evaluated at bid price : 17.57
Bid-YTW : 4.48 %
BAM.PR.G FixedFloater 1.05 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-19
Maturity Price : 25.00
Evaluated at bid price : 14.50
Bid-YTW : 5.68 %
IAG.PR.G FixedReset 1.11 % YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 20.12
Bid-YTW : 6.77 %
BAM.PR.R FixedReset 1.28 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-19
Maturity Price : 15.05
Evaluated at bid price : 15.05
Bid-YTW : 5.05 %
BAM.PR.T FixedReset 1.62 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-19
Maturity Price : 15.07
Evaluated at bid price : 15.07
Bid-YTW : 5.18 %
SLF.PR.J FloatingReset 2.19 % YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 13.05
Bid-YTW : 10.50 %
FTS.PR.I FloatingReset 2.58 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-19
Maturity Price : 11.51
Evaluated at bid price : 11.51
Bid-YTW : 4.28 %
TRP.PR.I FloatingReset 7.44 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-19
Maturity Price : 11.55
Evaluated at bid price : 11.55
Bid-YTW : 4.49 %
Volume Highlights
Issue Index Shares
Traded
Notes
BNS.PR.O Deemed-Retractible 115,600 YTW SCENARIO
Maturity Type : Call
Maturity Date : 2016-06-18
Maturity Price : 25.25
Evaluated at bid price : 25.43
Bid-YTW : 0.37 %
BAM.PF.G FixedReset 49,242 YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-19
Maturity Price : 19.73
Evaluated at bid price : 19.73
Bid-YTW : 4.82 %
MFC.PR.M FixedReset 45,000 YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 19.20
Bid-YTW : 7.03 %
PWF.PR.H Perpetual-Premium 35,243 YTW SCENARIO
Maturity Type : Call
Maturity Date : 2016-06-18
Maturity Price : 25.00
Evaluated at bid price : 25.17
Bid-YTW : 1.11 %
TD.PF.B FixedReset 34,440 YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-19
Maturity Price : 18.15
Evaluated at bid price : 18.15
Bid-YTW : 4.32 %
RY.PR.H FixedReset 30,250 YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-19
Maturity Price : 18.10
Evaluated at bid price : 18.10
Bid-YTW : 4.32 %
There were 36 other index-included issues trading in excess of 10,000 shares.
Wide Spread Highlights
Issue Index Quote Data and Yield Notes
BNS.PR.P FixedReset Quote: 23.85 – 24.49
Spot Rate : 0.6400
Average : 0.3617

YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2022-01-31
Maturity Price : 25.00
Evaluated at bid price : 23.85
Bid-YTW : 3.89 %

VNR.PR.A FixedReset Quote: 18.00 – 18.49
Spot Rate : 0.4900
Average : 0.3211

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-19
Maturity Price : 18.00
Evaluated at bid price : 18.00
Bid-YTW : 5.02 %

PWF.PR.Q FloatingReset Quote: 12.51 – 13.39
Spot Rate : 0.8800
Average : 0.7541

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-19
Maturity Price : 12.51
Evaluated at bid price : 12.51
Bid-YTW : 4.27 %

BNS.PR.R FixedReset Quote: 22.76 – 23.35
Spot Rate : 0.5900
Average : 0.4850

YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2022-01-31
Maturity Price : 25.00
Evaluated at bid price : 22.76
Bid-YTW : 5.04 %

BNS.PR.D FloatingReset Quote: 18.51 – 18.74
Spot Rate : 0.2300
Average : 0.1434

YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2022-01-31
Maturity Price : 25.00
Evaluated at bid price : 18.51
Bid-YTW : 7.18 %

IFC.PR.C FixedReset Quote: 17.58 – 17.89
Spot Rate : 0.3100
Average : 0.2240

YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 17.58
Bid-YTW : 8.36 %

May 18, 2016

May 18th, 2016

PerpetualDiscounts now yield 5.59%, equivalent to 7.27% interest at the standard equivalency factor of 1.3x. Long corporates now yield 4.00%, so the pre-tax interest-equivalent spread is now about 325bp, a slight (and perhaps spurious) narrowing from the 330bp reported May 11.

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 4.67 % 5.68 % 11,772 17.05 1 0.1384 % 1,690.2
FixedFloater 6.62 % 5.74 % 18,540 16.79 1 0.0000 % 3,052.8
Floater 4.54 % 4.75 % 44,961 15.89 4 -0.7395 % 1,709.5
OpRet 0.00 % 0.00 % 0 0.00 0 0.2191 % 2,826.1
SplitShare 4.95 % 5.05 % 82,785 2.49 7 0.2191 % 3,307.1
Interest-Bearing 0.00 % 0.00 % 0 0.00 0 0.2191 % 2,580.3
Perpetual-Premium 5.76 % -9.37 % 74,272 0.09 6 0.0000 % 2,598.0
Perpetual-Discount 5.48 % 5.59 % 103,383 14.50 33 -0.2022 % 2,675.4
FixedReset 5.21 % 4.69 % 166,294 13.81 88 -0.1286 % 1,961.6
Deemed-Retractible 5.15 % 5.56 % 131,545 6.76 33 -0.0773 % 2,665.9
FloatingReset 3.16 % 5.00 % 26,458 5.28 17 -0.2111 % 2,080.6
Performance Highlights
Issue Index Change Notes
TRP.PR.A FixedReset -2.46 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-18
Maturity Price : 14.27
Evaluated at bid price : 14.27
Bid-YTW : 4.88 %
TD.PF.E FixedReset -2.08 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-18
Maturity Price : 20.24
Evaluated at bid price : 20.24
Bid-YTW : 4.48 %
PWF.PR.A Floater -2.04 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-18
Maturity Price : 11.51
Evaluated at bid price : 11.51
Bid-YTW : 4.13 %
FTS.PR.I FloatingReset -1.92 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-18
Maturity Price : 11.22
Evaluated at bid price : 11.22
Bid-YTW : 4.39 %
FTS.PR.J Perpetual-Discount -1.58 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-18
Maturity Price : 22.09
Evaluated at bid price : 22.36
Bid-YTW : 5.32 %
TRP.PR.G FixedReset -1.50 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-18
Maturity Price : 19.02
Evaluated at bid price : 19.02
Bid-YTW : 4.86 %
MFC.PR.F FixedReset -1.45 % YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 13.56
Bid-YTW : 10.15 %
FTS.PR.F Perpetual-Discount -1.41 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-18
Maturity Price : 22.77
Evaluated at bid price : 23.05
Bid-YTW : 5.32 %
TRP.PR.E FixedReset -1.32 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-18
Maturity Price : 17.91
Evaluated at bid price : 17.91
Bid-YTW : 4.60 %
CU.PR.G Perpetual-Discount -1.28 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-18
Maturity Price : 20.78
Evaluated at bid price : 20.78
Bid-YTW : 5.44 %
CM.PR.P FixedReset -1.04 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-18
Maturity Price : 18.14
Evaluated at bid price : 18.14
Bid-YTW : 4.31 %
NA.PR.W FixedReset -1.00 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-18
Maturity Price : 17.75
Evaluated at bid price : 17.75
Bid-YTW : 4.43 %
CU.PR.I FixedReset 1.02 % YTW SCENARIO
Maturity Type : Call
Maturity Date : 2020-12-01
Maturity Price : 25.00
Evaluated at bid price : 25.70
Bid-YTW : 3.80 %
FTS.PR.H FixedReset 1.18 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-18
Maturity Price : 12.90
Evaluated at bid price : 12.90
Bid-YTW : 4.31 %
MFC.PR.J FixedReset 1.23 % YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 19.80
Bid-YTW : 6.62 %
SLF.PR.G FixedReset 1.31 % YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 14.70
Bid-YTW : 9.27 %
BIP.PR.A FixedReset 1.43 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-18
Maturity Price : 19.15
Evaluated at bid price : 19.15
Bid-YTW : 5.72 %
PWF.PR.Q FloatingReset 1.50 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-18
Maturity Price : 12.85
Evaluated at bid price : 12.85
Bid-YTW : 4.15 %
FTS.PR.M FixedReset 1.61 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-18
Maturity Price : 18.25
Evaluated at bid price : 18.25
Bid-YTW : 4.60 %
SLF.PR.H FixedReset 1.97 % YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 16.57
Bid-YTW : 8.58 %
Volume Highlights
Issue Index Shares
Traded
Notes
BNS.PR.O Deemed-Retractible 30,900 YTW SCENARIO
Maturity Type : Call
Maturity Date : 2016-06-17
Maturity Price : 25.25
Evaluated at bid price : 25.40
Bid-YTW : 1.63 %
RY.PR.R FixedReset 24,063 YTW SCENARIO
Maturity Type : Call
Maturity Date : 2021-08-24
Maturity Price : 25.00
Evaluated at bid price : 26.30
Bid-YTW : 4.64 %
BAM.PF.D Perpetual-Discount 22,186 YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-18
Maturity Price : 21.01
Evaluated at bid price : 21.01
Bid-YTW : 5.93 %
BAM.PF.C Perpetual-Discount 18,250 YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-18
Maturity Price : 20.86
Evaluated at bid price : 20.86
Bid-YTW : 5.91 %
EML.PR.A FixedReset 17,080 YTW SCENARIO
Maturity Type : Call
Maturity Date : 2021-04-17
Maturity Price : 25.00
Evaluated at bid price : 25.80
Bid-YTW : 5.15 %
TD.PF.G FixedReset 15,297 YTW SCENARIO
Maturity Type : Call
Maturity Date : 2021-04-30
Maturity Price : 25.00
Evaluated at bid price : 26.13
Bid-YTW : 4.56 %
There were 16 other index-included issues trading in excess of 10,000 shares.
Wide Spread Highlights
Issue Index Quote Data and Yield Notes
FTS.PR.I FloatingReset Quote: 11.22 – 11.85
Spot Rate : 0.6300
Average : 0.4375

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-18
Maturity Price : 11.22
Evaluated at bid price : 11.22
Bid-YTW : 4.39 %

SLF.PR.J FloatingReset Quote: 12.77 – 13.25
Spot Rate : 0.4800
Average : 0.3117

YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 12.77
Bid-YTW : 10.80 %

EML.PR.A FixedReset Quote: 25.80 – 26.25
Spot Rate : 0.4500
Average : 0.2942

YTW SCENARIO
Maturity Type : Call
Maturity Date : 2021-04-17
Maturity Price : 25.00
Evaluated at bid price : 25.80
Bid-YTW : 5.15 %

TRP.PR.A FixedReset Quote: 14.27 – 14.82
Spot Rate : 0.5500
Average : 0.4110

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-18
Maturity Price : 14.27
Evaluated at bid price : 14.27
Bid-YTW : 4.88 %

BAM.PF.B FixedReset Quote: 17.30 – 17.77
Spot Rate : 0.4700
Average : 0.3421

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-18
Maturity Price : 17.30
Evaluated at bid price : 17.30
Bid-YTW : 5.08 %

NA.PR.W FixedReset Quote: 17.75 – 18.09
Spot Rate : 0.3400
Average : 0.2418

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-18
Maturity Price : 17.75
Evaluated at bid price : 17.75
Bid-YTW : 4.43 %

MFC.PR.F To Be Extended

May 18th, 2016

Manulife Financial Corporation has announced:

that it does not intend to exercise its right to redeem all or any of its currently outstanding 8,000,000 Non-cumulative Rate Reset Class 1 Shares Series 3 (the “Series 3 Preferred Shares”) (TSX: MFC.PR.F) on June 19, 2016. As a result, subject to certain conditions described in the prospectus supplement dated March 7, 2011 relating to the issuance of the Series 3 Preferred Shares (the “Prospectus”), the holders of the Series 3 Preferred Shares have the right, at their option, to convert all or part of their Series 3 Preferred Shares on a one-for-one basis into Non-cumulative Floating Rate Class 1 Shares Series 4 of Manulife (the “Series 4 Preferred Shares”) on June 20, 2016. This date is the first business day following the conversion date of June 19, 2016, identified in the Prospectus, which falls on a Sunday. A formal notice of the right to convert Series 3 Preferred Shares into Series 4 Preferred Shares will be sent to the registered holders of the Series 3 Preferred Shares in accordance with the share conditions of the Series 3 Preferred Shares. Holders of Series 3 Preferred Shares are not required to elect to convert all or any part of their Series 3 Preferred Shares into Series 4 Preferred Shares. Holders who do not exercise their right to convert their Series 3 Preferred Shares into Series 4 Preferred Shares on such date will retain their Series 3 Preferred Shares, unless automatically converted in accordance with the conditions below.

The foregoing conversion right is subject to the conditions that: (i) if, after June 6, 2016, Manulife determines that there would be less than 1,000,000 Series 3 Preferred Shares outstanding on June 20, 2016, then all remaining Series 3 Preferred Shares will automatically be converted into an equal number of Series 4 Preferred Shares on June 20, 2016, and (ii) alternatively, if, after June 6, 2016, Manulife determines that there would be less than 1,000,000 Series 4 Preferred Shares outstanding on June 20, 2016, then no Series 3 Preferred Shares will be converted into Series 4 Preferred Shares. In either case, Manulife will give written notice to that effect to any registered holders of Series 3 Preferred Shares affected by the preceding minimums on or before June 13, 2016.

The dividend rate applicable to the Series 3 Preferred Shares for the 5-year period commencing on June 20, 2016, and ending on June 19, 2021, and the dividend rate applicable to the Series 4 Preferred Shares for the 3-month period commencing on June 20, 2016, and ending on September 19, 2016, will be determined and announced by way of a news release on May 24, 2016. Manulife will also give written notice of these dividend rates to the registered holders of Series 3 Preferred Shares.

Beneficial owners of Series 3 Preferred Shares who wish to exercise their right of conversion should instruct their broker or other nominee to exercise such right before 5:00 p.m. (EDT) on June 6, 2016. Conversion inquiries should be directed to Manulife’s Registrar and Transfer Agent, CST Trust Company, at 1-800-387-0825.

Subject to certain conditions described in the Prospectus, Manulife may redeem the Series 3 Preferred Shares, in whole or in part, on June 19, 2021 and on June 19 every five years thereafter and may redeem the Series 4 Preferred Shares, in whole or in part, after June 20, 2016.

The Toronto Stock Exchange (“TSX”) has conditionally approved the listing of the Series 4 Preferred Shares effective upon conversion. Listing of the Series 4 Preferred Shares is subject to Manulife fulfilling all the listing requirements of the TSX and, upon approval, the Series 4 Preferred Shares will be listed on the TSX under the trading symbol “MFC.PR.P”.

This is not a surprise given the low Issue Reset Spread of 141bp. I will report the reset rate when this is announced May 24.

May 17, 2016

May 18th, 2016
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 4.68 % 5.68 % 11,857 17.05 1 -0.2761 % 1,687.8
FixedFloater 6.62 % 5.74 % 18,761 16.79 1 0.0000 % 3,052.8
Floater 4.51 % 4.73 % 44,248 15.94 4 0.3111 % 1,722.2
OpRet 0.00 % 0.00 % 0 0.00 0 0.0173 % 2,819.9
SplitShare 4.93 % 5.24 % 81,579 2.46 7 0.0173 % 3,299.9
Interest-Bearing 0.00 % 0.00 % 0 0.00 0 0.0173 % 2,574.7
Perpetual-Premium 5.76 % -10.92 % 75,343 0.08 6 0.0788 % 2,598.0
Perpetual-Discount 5.47 % 5.57 % 103,302 14.48 33 0.1130 % 2,680.8
FixedReset 5.21 % 4.65 % 166,708 7.48 88 -0.0473 % 1,964.1
Deemed-Retractible 5.15 % 5.58 % 130,646 6.76 33 0.1549 % 2,667.9
FloatingReset 3.16 % 4.91 % 27,100 5.29 17 0.0916 % 2,085.0
Performance Highlights
Issue Index Change Notes
FTS.PR.G FixedReset -2.83 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-17
Maturity Price : 16.14
Evaluated at bid price : 16.14
Bid-YTW : 4.58 %
BAM.PR.X FixedReset -2.40 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-17
Maturity Price : 13.43
Evaluated at bid price : 13.43
Bid-YTW : 4.96 %
FTS.PR.I FloatingReset -2.22 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-17
Maturity Price : 11.44
Evaluated at bid price : 11.44
Bid-YTW : 4.30 %
FTS.PR.M FixedReset -1.59 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-17
Maturity Price : 17.96
Evaluated at bid price : 17.96
Bid-YTW : 4.67 %
FTS.PR.H FixedReset -1.54 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-17
Maturity Price : 12.75
Evaluated at bid price : 12.75
Bid-YTW : 4.36 %
GWO.PR.N FixedReset -1.44 % YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 13.65
Bid-YTW : 10.16 %
RY.PR.J FixedReset -1.28 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-17
Maturity Price : 19.27
Evaluated at bid price : 19.27
Bid-YTW : 4.52 %
SLF.PR.J FloatingReset -1.08 % YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 12.86
Bid-YTW : 10.69 %
FTS.PR.K FixedReset -1.08 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-17
Maturity Price : 16.54
Evaluated at bid price : 16.54
Bid-YTW : 4.43 %
BAM.PR.Z FixedReset 1.03 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-17
Maturity Price : 18.60
Evaluated at bid price : 18.60
Bid-YTW : 5.13 %
NA.PR.Q FixedReset 1.04 % YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2022-01-31
Maturity Price : 25.00
Evaluated at bid price : 23.39
Bid-YTW : 4.62 %
TD.PR.T FloatingReset 1.27 % YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2022-01-31
Maturity Price : 25.00
Evaluated at bid price : 21.60
Bid-YTW : 4.91 %
HSE.PR.G FixedReset 1.59 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-17
Maturity Price : 19.20
Evaluated at bid price : 19.20
Bid-YTW : 5.70 %
TRP.PR.E FixedReset 1.68 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-17
Maturity Price : 18.15
Evaluated at bid price : 18.15
Bid-YTW : 4.53 %
HSE.PR.E FixedReset 1.73 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-17
Maturity Price : 19.45
Evaluated at bid price : 19.45
Bid-YTW : 5.64 %
CM.PR.Q FixedReset 2.75 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-17
Maturity Price : 19.45
Evaluated at bid price : 19.45
Bid-YTW : 4.55 %
Volume Highlights
Issue Index Shares
Traded
Notes
TRP.PR.J FixedReset 41,513 YTW SCENARIO
Maturity Type : Call
Maturity Date : 2021-05-31
Maturity Price : 25.00
Evaluated at bid price : 25.76
Bid-YTW : 4.80 %
MFC.PR.O FixedReset 37,692 YTW SCENARIO
Maturity Type : Call
Maturity Date : 2021-06-19
Maturity Price : 25.00
Evaluated at bid price : 26.15
Bid-YTW : 4.50 %
RY.PR.R FixedReset 30,738 YTW SCENARIO
Maturity Type : Call
Maturity Date : 2021-08-24
Maturity Price : 25.00
Evaluated at bid price : 26.35
Bid-YTW : 4.60 %
BIP.PR.B FixedReset 27,942 YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-17
Maturity Price : 23.20
Evaluated at bid price : 25.02
Bid-YTW : 5.48 %
RY.PR.Z FixedReset 25,505 YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-17
Maturity Price : 18.40
Evaluated at bid price : 18.40
Bid-YTW : 4.19 %
PVS.PR.E SplitShare 19,025 YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2022-10-31
Maturity Price : 25.00
Evaluated at bid price : 24.47
Bid-YTW : 6.15 %
There were 14 other index-included issues trading in excess of 10,000 shares.
Wide Spread Highlights
Issue Index Quote Data and Yield Notes
PWF.PR.Q FloatingReset Quote: 12.66 – 13.48
Spot Rate : 0.8200
Average : 0.6006

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-17
Maturity Price : 12.66
Evaluated at bid price : 12.66
Bid-YTW : 4.22 %

HSE.PR.G FixedReset Quote: 19.20 – 19.60
Spot Rate : 0.4000
Average : 0.2847

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-17
Maturity Price : 19.20
Evaluated at bid price : 19.20
Bid-YTW : 5.70 %

HSE.PR.C FixedReset Quote: 17.31 – 17.59
Spot Rate : 0.2800
Average : 0.1929

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-17
Maturity Price : 17.31
Evaluated at bid price : 17.31
Bid-YTW : 5.83 %

BAM.PR.R FixedReset Quote: 14.85 – 15.08
Spot Rate : 0.2300
Average : 0.1479

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-17
Maturity Price : 14.85
Evaluated at bid price : 14.85
Bid-YTW : 5.11 %

BAM.PR.X FixedReset Quote: 13.43 – 13.75
Spot Rate : 0.3200
Average : 0.2400

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-17
Maturity Price : 13.43
Evaluated at bid price : 13.43
Bid-YTW : 4.96 %

BAM.PF.E FixedReset Quote: 17.90 – 18.10
Spot Rate : 0.2000
Average : 0.1470

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-17
Maturity Price : 17.90
Evaluated at bid price : 17.90
Bid-YTW : 4.95 %

New Issue: BEP FixedReset, 5.75%+501M575

May 16th, 2016

Brookfield Renewable Partners L.P. has announced:

that it has agreed to issue 6,000,000 Cumulative Minimum Rate Reset Class A Preferred Limited Partnership Units, Series 9 (the “Series 9 Preferred Units”) on a bought deal basis to a syndicate of underwriters led by CIBC Capital Markets, RBC Capital Markets, Scotiabank and TD Securities Inc. for distribution to the public. The Series 9 Preferred Units will be issued at a price of $25.00 per unit, for gross proceeds of $150,000,000.

Holders of the Series 9 Preferred Units will be entitled to receive a cumulative quarterly fixed distribution yielding 5.75% annually for the initial period ending July 31, 2021. Thereafter, the distribution rate will be reset every five years at a rate equal to the greater of (i) the 5-year Government of Canada bond yield plus 5.01%, and (ii) 5.75%. The Series 9 Preferred Units are redeemable on July 31, 2021 and on each Series 9 Reclassification Date (as defined below) thereafter.

Holders of the Series 9 Preferred Units will have the right, at their option, to reclassify their Series 9 Preferred Units into Cumulative Floating Rate Reset Class A Preferred Limited Partnership Units, Series 10 (the “Series 10 Preferred Units”), subject to certain conditions, on July 31, 2021 and on July 31 every 5 years thereafter (each a “Series 9 Reclassification Date”). Holders of Series 10 Preferred Units will be entitled to receive a cumulative quarterly floating distribution at a rate equal to the 90-day Canadian Treasury Bill yield plus 5.01%.

Brookfield Renewable has granted the underwriters an option, exercisable until 48 hours prior to closing, to purchase up to an additional 2,000,000 Series 9 Preferred Units which, if exercised, would increase the gross offering size to $200,000,000.

The Series 9 Preferred Units will be offered in all provinces and territories of Canada by way of a supplement to Brookfield Renewable’s existing Canadian short form base shelf prospectus. The Series 9 Preferred Units may not be offered or sold in the United States or to U.S. persons absent registration or an applicable exemption from the registration requirements under the U.S. Securities Act.

Brookfield Renewable intends to use the net proceeds of the issue of Series 9 Preferred Units to repay indebtedness. The offering of Series 9 Preferred Units is expected to close on or about May 25, 2016.

It is my understanding that distributions on the units will be characterized in the same manner as, for instance, the related issue BEP.PR.G:

According to the prospectus:
Management anticipates the 5 year average per unit Canadian dividend, ordinary income and return of capital will be 50%, 25%, and 25%, respectively, for the period between 2015 and 2020; however, no assurance can be provided this will occur.

… but the prospectus supplement is not yet available for this particular new issue. It’s a pity they didn’t include this rather vital information in the press release.

May 16, 2016

May 16th, 2016

The BoC has released the Bank of Canada Review – Spring 2016.

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 4.66 % 5.67 % 12,333 17.07 1 0.6250 % 1,692.5
FixedFloater 6.62 % 5.74 % 18,307 16.79 1 0.0000 % 3,052.8
Floater 4.52 % 4.75 % 43,664 15.90 4 -0.1911 % 1,716.9
OpRet 0.00 % 0.00 % 0 0.00 0 0.1906 % 2,819.5
SplitShare 4.93 % 5.47 % 82,625 2.46 7 0.1906 % 3,299.3
Interest-Bearing 0.00 % 0.00 % 0 0.00 0 0.1906 % 2,574.2
Perpetual-Premium 5.77 % -10.51 % 78,439 0.08 6 0.0394 % 2,596.0
Perpetual-Discount 5.48 % 5.59 % 102,937 14.49 33 0.2506 % 2,677.8
FixedReset 5.21 % 4.74 % 168,276 7.48 88 -0.1845 % 1,965.0
Deemed-Retractible 5.16 % 5.67 % 131,472 6.77 33 0.1590 % 2,663.8
FloatingReset 3.16 % 5.15 % 25,182 5.29 17 0.1732 % 2,083.1
Performance Highlights
Issue Index Change Notes
CM.PR.Q FixedReset -3.52 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-16
Maturity Price : 18.93
Evaluated at bid price : 18.93
Bid-YTW : 4.67 %
BIP.PR.A FixedReset -2.63 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-16
Maturity Price : 18.89
Evaluated at bid price : 18.89
Bid-YTW : 5.80 %
IFC.PR.C FixedReset -2.19 % YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 17.90
Bid-YTW : 8.10 %
BMO.PR.Y FixedReset -1.99 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-16
Maturity Price : 19.75
Evaluated at bid price : 19.75
Bid-YTW : 4.43 %
CU.PR.C FixedReset -1.42 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-16
Maturity Price : 18.00
Evaluated at bid price : 18.00
Bid-YTW : 4.36 %
TD.PF.E FixedReset -1.38 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-16
Maturity Price : 20.67
Evaluated at bid price : 20.67
Bid-YTW : 4.38 %
IFC.PR.A FixedReset -1.29 % YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 15.31
Bid-YTW : 9.60 %
NA.PR.S FixedReset -1.02 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-16
Maturity Price : 18.46
Evaluated at bid price : 18.46
Bid-YTW : 4.42 %
CIU.PR.A Perpetual-Discount 1.05 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-16
Maturity Price : 21.25
Evaluated at bid price : 21.25
Bid-YTW : 5.43 %
FTS.PR.I FloatingReset 1.12 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-16
Maturity Price : 11.70
Evaluated at bid price : 11.70
Bid-YTW : 4.21 %
SLF.PR.J FloatingReset 1.17 % YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 13.00
Bid-YTW : 10.54 %
HSE.PR.B FloatingReset 1.27 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-16
Maturity Price : 10.35
Evaluated at bid price : 10.35
Bid-YTW : 5.51 %
FTS.PR.G FixedReset 1.46 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-16
Maturity Price : 16.61
Evaluated at bid price : 16.61
Bid-YTW : 4.45 %
GWO.PR.N FixedReset 1.47 % YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 13.85
Bid-YTW : 9.95 %
GWO.PR.O FloatingReset 1.56 % YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 13.00
Bid-YTW : 10.37 %
HSE.PR.A FixedReset 3.56 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-16
Maturity Price : 11.65
Evaluated at bid price : 11.65
Bid-YTW : 5.26 %
Volume Highlights
Issue Index Shares
Traded
Notes
BAM.PR.K Floater 69,200 YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-16
Maturity Price : 10.06
Evaluated at bid price : 10.06
Bid-YTW : 4.75 %
BAM.PF.H FixedReset 49,818 YTW SCENARIO
Maturity Type : Call
Maturity Date : 2020-12-31
Maturity Price : 25.00
Evaluated at bid price : 26.02
Bid-YTW : 4.19 %
NA.PR.X FixedReset 49,091 YTW SCENARIO
Maturity Type : Call
Maturity Date : 2021-05-15
Maturity Price : 25.00
Evaluated at bid price : 26.20
Bid-YTW : 4.54 %
MFC.PR.O FixedReset 44,088 YTW SCENARIO
Maturity Type : Call
Maturity Date : 2021-06-19
Maturity Price : 25.00
Evaluated at bid price : 26.00
Bid-YTW : 4.63 %
BAM.PR.R FixedReset 39,594 YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-16
Maturity Price : 14.95
Evaluated at bid price : 14.95
Bid-YTW : 5.08 %
BAM.PF.B FixedReset 32,625 YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-16
Maturity Price : 17.55
Evaluated at bid price : 17.55
Bid-YTW : 5.01 %
There were 40 other index-included issues trading in excess of 10,000 shares.
Wide Spread Highlights
Issue Index Quote Data and Yield Notes
CM.PR.Q FixedReset Quote: 18.93 – 19.50
Spot Rate : 0.5700
Average : 0.3855

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-16
Maturity Price : 18.93
Evaluated at bid price : 18.93
Bid-YTW : 4.67 %

ALB.PR.C SplitShare Quote: 26.05 – 26.88
Spot Rate : 0.8300
Average : 0.6523

YTW SCENARIO
Maturity Type : Call
Maturity Date : 2017-02-28
Maturity Price : 25.67
Evaluated at bid price : 26.05
Bid-YTW : 2.58 %

CU.PR.C FixedReset Quote: 18.00 – 18.43
Spot Rate : 0.4300
Average : 0.2878

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-16
Maturity Price : 18.00
Evaluated at bid price : 18.00
Bid-YTW : 4.36 %

CU.PR.I FixedReset Quote: 25.45 – 25.93
Spot Rate : 0.4800
Average : 0.3824

YTW SCENARIO
Maturity Type : Call
Maturity Date : 2020-12-01
Maturity Price : 25.00
Evaluated at bid price : 25.45
Bid-YTW : 4.04 %

SLF.PR.H FixedReset Quote: 16.12 – 16.69
Spot Rate : 0.5700
Average : 0.4754

YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 16.12
Bid-YTW : 8.96 %

TRP.PR.I FloatingReset Quote: 10.75 – 12.28
Spot Rate : 1.5300
Average : 1.4562

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-16
Maturity Price : 10.75
Evaluated at bid price : 10.75
Bid-YTW : 4.83 %

May PrefLetter To Be Delayed

May 13th, 2016

I regret to announce that the May edition of PrefLetter will be delayed by one week. It will be prepared as of the close on May 20 and is scheduled to be delivered to clients prior to the opening on May 24 (Monday May 23 is a holiday).

May 13, 2016

May 13th, 2016

Assiduous Readers will remember my interest in the minimum wage debate and my position that an increase in the minimum wage is desirable, not because of any bleating about fairness, but because this will help to increase productivity as lower-skill jobs are automated. This automation is well-illustrated by McDonalds self-ordering kiosks in Europe; the issue was further discussed on August 6, 2015. We now have another data point – the hamburger chain Wendy’s is bringing in more self-ordering kiosks to reduce labour costs:

Wendy’s (WEN) said that self-service ordering kiosks will be made available across its 6,000-plus restaurants in the second half of the year as minimum wage hikes and a tight labor market push up wages.

It will be up to franchisees whether to deploy the labor-saving technology, but Wendy’s President Todd Penegor did note that some franchise locations have been raising prices to offset wage hikes.

McDonald’s (MCD) has been testing self-service kiosks. But Wendy’s, which has been vocal about embracing labor-saving technology, is launching the biggest potential expansion.

Wendy’s Penegor said company-operated stores, only about 10% of the total, are seeing wage inflation of 5% to 6%, driven both by the minimum wage and some by the need to offer a competitive wage “to access good labor.”

In addition to self-order kiosks, the company is also getting ready to move beyond the testing phase with labor-saving mobile ordering and mobile payment available systemwide by the end of the year. Yum Brands and McDonald’s already have mobile ordering apps.

… and Assiduous Reader SM draws my attention to drone racing:

With the drone industry charged, Mountain Dew® and DR1 Racing, announced a global partnership full of industry firsts. Featuring the top drone racing pilots in the world, this newly formed drone racing series marks the first branded partnership and national broadcast for this burgeoning sport. Headlining the series, the DR1 Invitational presented by Mountain Dew will air this August in a one-hour broadcast special. DR1 will also be the first truly live drone series to stream globally on Twitch, the world’s leading social video platform and community for gamers.

The DR1 Invitational presented by Mountain Dew will showcase 12 of the top drone racing pilots in the world as they compete for the title at the iconic Sepulveda Dam in Los Angeles this summer. Pilots, who control drones from the top of the dam, will face down a gauntlet of environmental and man-made obstacles as they fly their drones at speeds of more than 80 MPH while spectators watch on from above.

Sounds great, but best of all would be a demolition derby! Have a field – say the size of a football field – with a large hoop at each end. Go through the hoops alternately. Most hoop passages in twenty minutes wins. I’d buy tickets for that!

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 4.69 % 5.70 % 11,720 17.03 1 0.0000 % 1,682.0
FixedFloater 6.62 % 5.74 % 18,930 16.80 1 -0.4854 % 3,052.8
Floater 4.51 % 4.73 % 43,819 15.94 4 0.0717 % 1,720.1
OpRet 0.00 % 0.00 % 0 0.00 0 -0.0589 % 2,814.1
SplitShare 4.94 % 5.47 % 80,008 3.96 7 -0.0589 % 3,293.0
Interest-Bearing 0.00 % 0.00 % 0 0.00 0 -0.0589 % 2,569.3
Perpetual-Premium 5.77 % -10.28 % 79,408 0.08 6 -0.0066 % 2,595.0
Perpetual-Discount 5.49 % 5.58 % 102,536 14.51 33 0.1860 % 2,671.1
FixedReset 5.19 % 4.70 % 168,453 7.42 88 -0.1390 % 1,968.7
Deemed-Retractible 5.16 % 5.66 % 129,257 6.77 33 -0.0013 % 2,659.6
FloatingReset 3.16 % 5.19 % 23,705 5.29 17 0.1802 % 2,079.5
Performance Highlights
Issue Index Change Notes
HSE.PR.G FixedReset -3.10 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-13
Maturity Price : 18.75
Evaluated at bid price : 18.75
Bid-YTW : 5.83 %
NA.PR.Q FixedReset -1.57 % YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2022-01-31
Maturity Price : 25.00
Evaluated at bid price : 23.13
Bid-YTW : 4.83 %
HSE.PR.C FixedReset -1.50 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-13
Maturity Price : 17.10
Evaluated at bid price : 17.10
Bid-YTW : 5.90 %
TD.PR.T FloatingReset -1.48 % YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2022-01-31
Maturity Price : 25.00
Evaluated at bid price : 21.28
Bid-YTW : 5.19 %
FTS.PR.H FixedReset -1.44 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-13
Maturity Price : 13.02
Evaluated at bid price : 13.02
Bid-YTW : 4.34 %
MFC.PR.C Deemed-Retractible -1.36 % YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 21.01
Bid-YTW : 7.13 %
MFC.PR.K FixedReset -1.34 % YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 18.45
Bid-YTW : 7.44 %
TD.PR.S FixedReset -1.31 % YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2022-01-31
Maturity Price : 25.00
Evaluated at bid price : 22.56
Bid-YTW : 4.75 %
HSE.PR.E FixedReset -1.30 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-13
Maturity Price : 19.00
Evaluated at bid price : 19.00
Bid-YTW : 5.77 %
TRP.PR.G FixedReset -1.28 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-13
Maturity Price : 19.35
Evaluated at bid price : 19.35
Bid-YTW : 4.86 %
MFC.PR.L FixedReset -1.26 % YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 18.76
Bid-YTW : 7.32 %
MFC.PR.H FixedReset -1.25 % YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 21.25
Bid-YTW : 6.29 %
MFC.PR.I FixedReset -1.12 % YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 20.37
Bid-YTW : 6.66 %
MFC.PR.M FixedReset -1.03 % YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 19.20
Bid-YTW : 7.20 %
TRP.PR.C FixedReset 1.10 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-13
Maturity Price : 12.00
Evaluated at bid price : 12.00
Bid-YTW : 4.70 %
CU.PR.F Perpetual-Discount 1.11 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-13
Maturity Price : 20.92
Evaluated at bid price : 20.92
Bid-YTW : 5.39 %
TRP.PR.B FixedReset 1.14 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-13
Maturity Price : 11.50
Evaluated at bid price : 11.50
Bid-YTW : 4.42 %
BAM.PR.X FixedReset 1.18 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-13
Maturity Price : 13.71
Evaluated at bid price : 13.71
Bid-YTW : 4.85 %
TD.PF.F Perpetual-Discount 1.45 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-13
Maturity Price : 24.12
Evaluated at bid price : 24.50
Bid-YTW : 5.02 %
PWF.PR.Q FloatingReset 2.36 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-13
Maturity Price : 12.57
Evaluated at bid price : 12.57
Bid-YTW : 4.25 %
TRP.PR.A FixedReset 3.33 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-13
Maturity Price : 14.59
Evaluated at bid price : 14.59
Bid-YTW : 4.76 %
SLF.PR.J FloatingReset 4.22 % YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 12.85
Bid-YTW : 10.69 %
BIP.PR.A FixedReset 8.81 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-13
Maturity Price : 19.40
Evaluated at bid price : 19.40
Bid-YTW : 5.64 %
Volume Highlights
Issue Index Shares
Traded
Notes
FTS.PR.H FixedReset 233,200 YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-13
Maturity Price : 13.02
Evaluated at bid price : 13.02
Bid-YTW : 4.34 %
TRP.PR.J FixedReset 60,016 YTW SCENARIO
Maturity Type : Call
Maturity Date : 2021-05-31
Maturity Price : 25.00
Evaluated at bid price : 25.75
Bid-YTW : 4.80 %
NA.PR.X FixedReset 55,941 YTW SCENARIO
Maturity Type : Call
Maturity Date : 2021-05-15
Maturity Price : 25.00
Evaluated at bid price : 26.22
Bid-YTW : 4.52 %
TRP.PR.C FixedReset 54,200 YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-13
Maturity Price : 12.00
Evaluated at bid price : 12.00
Bid-YTW : 4.70 %
RY.PR.Q FixedReset 52,106 YTW SCENARIO
Maturity Type : Call
Maturity Date : 2021-05-24
Maturity Price : 25.00
Evaluated at bid price : 26.13
Bid-YTW : 4.47 %
TD.PF.F Perpetual-Discount 32,220 YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-13
Maturity Price : 24.12
Evaluated at bid price : 24.50
Bid-YTW : 5.02 %
There were 24 other index-included issues trading in excess of 10,000 shares.
Wide Spread Highlights
Issue Index Quote Data and Yield Notes
POW.PR.B Perpetual-Discount Quote: 23.82 – 24.28
Spot Rate : 0.4600
Average : 0.3133

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-13
Maturity Price : 23.55
Evaluated at bid price : 23.82
Bid-YTW : 5.67 %

IAG.PR.A Deemed-Retractible Quote: 21.68 – 22.20
Spot Rate : 0.5200
Average : 0.3885

YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 21.68
Bid-YTW : 6.76 %

RY.PR.J FixedReset Quote: 19.39 – 19.99
Spot Rate : 0.6000
Average : 0.4712

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-13
Maturity Price : 19.39
Evaluated at bid price : 19.39
Bid-YTW : 4.48 %

BNS.PR.F FloatingReset Quote: 18.51 – 19.55
Spot Rate : 1.0400
Average : 0.9120

YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2022-01-31
Maturity Price : 25.00
Evaluated at bid price : 18.51
Bid-YTW : 7.57 %

PWF.PR.L Perpetual-Discount Quote: 22.90 – 23.23
Spot Rate : 0.3300
Average : 0.2070

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-13
Maturity Price : 22.66
Evaluated at bid price : 22.90
Bid-YTW : 5.61 %

MFC.PR.I FixedReset Quote: 20.37 – 20.73
Spot Rate : 0.3600
Average : 0.2443

YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 20.37
Bid-YTW : 6.66 %

RON.PR.A, RON.PR.B – Control Deal To Close May 20

May 13th, 2016

Lowe’s Companies Inc. has announced:

that it has been granted approval under the Investment Canada Act and clearance from the Competition Bureau with respect to its pending acquisition of RONA inc. (TSX: RON, RON.PR.A, RON.PR.B) (“RONA”).

“We are very pleased that Canadian regulatory agencies have authorized the transaction and we look forward to the benefits it will bring to stakeholders across the country,” said Lowe’s Canada President Sylvain Prud’homme. “We have made significant commitments to the Canadian market overall, to Quebec and to the communities in which the company operates. We believe these commitments will serve customers, employees, dealer owners and our partners well on a long-term basis.”

RONA President and CEO Robert Sawyer added, “Today we have completed a major step toward the closing of the transaction, which will be very positive for the future of RONA, its employees and all of its stakeholders.”

Given that the transaction has previously been approved by RONA common shareholders, this announcement represents the last major milestone in the process and clears the way for final closing of the transaction. The Company expects to close on May 20.

Holders of RON.PR.A turned down Lowe’s offer of $20 via a plan of arrangement on March 31, while common shareholders were enthusiastic about their deal. The issue closed at 20.55-71 today; the comparators I examined while making my favourable recommendation are up more … some a lot more, some just a bit more.

Update, 2016-5-21: Closed:

Lowe’s Companies, Inc. (NYSE: LOW) (“Lowe’s” or the “Company”) today announced that it has completed its previously announced acquisition of RONA inc. (“RONA”), in a transaction valued at C$3.2 billion (US$2.4 billion).