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Useful Articles

Several appendices appear in every edition of PrefLetter (until a major change is announced!); there are also occasional "Special Appendices"

Regular Appendices

Appendix FR: This appendix provides data regarding FixedReset and FloatingReset issues, divided into two main sections &emdash; Investment Grade (rated Pfd-2(low) and higher by DBRS) and Sub-Investment Grade (rated Pfd-3(high) and lower by DBRS. The table contains the following fields:
- Ticker : The ticker symbol of the issue
- Initial Dividend : The initial or current dividend of the issue; data in this column will contain the announced reset rate of the issue if the PrefLetter edition is published following the announcement but prior to the effective date of the reset.
- Spread on Reset : The spread to 5-Year Canada Bonds (FixedReset) or to 3-Month Treasury Bills (FloatingReset) for potential future resets to the dividend rate.
- Reset Date : The next reset date of the security
- Next Ex-Dividend Date : The presumed next ex-dividend date for the security. This will usually be an estimate, being approximately three months following the prior ex-dividend date, but is sometimes the actual date, if the announcement has been made. When trading securities near to their ex-dividend date, it is strongly recommended that investors verify the exact date with the company or an authoritative "live" third party.
- YTW : The Yield-To-Worst of the security, based on the bid price, the initial dividend, the spread on reset, and the five-year Canada bond rate assumed for the purpose of this calculation (disclosed at the bottom of the tables), and the effect of potential redemptions of the issue. It is presumed that the issuer will make redemption decisions that work out to be the worst for investor, in terms of calculated yield.
- Bid : The bid price reported by the Toronto Stock Exchange, as of the close on the effective date of the publication
- Ask : The aski price reported by the Toronto Stock Exchange, as of the close on the effective date of the publication
- Note 1 : A note regarding the calculation, disclosing the YTW scenario (e.g., "To Perpetuity" or blank for a call) and a note that an announced future, but not yet effective, dividend rate has been used
- Note 2 : Other information regarding the issue - e.g. it may be "ROC" (Return of Capital and, usually, interest treatment of distributions) or it may have a minimum reset rate
Appendix SP: This appendix provides data regarding PerpetualPremium and PerpetualDiscount issues ("Straight Preferreds") divided into two main sections &emdash; Investment Grade (rated Pfd-2(low) and higher by DBRS) and Sub-Investment Grade (rated Pfd-3(high) and lower by DBRS. The table contains the following fields:
- Ticker : The ticker symbol of the issue
- Dividend Rate : The dividend rate paid on the issue
- Next Ex-Dividend Date : The presumed next ex-dividend date for the security. This will usually be an estimate, being approximately three months following the prior ex-dividend date, but is sometimes the actual date, if the announcement has been made. When trading securities near to their ex-dividend date, it is strongly recommended that investors verify the exact date with the company or an authoritative "live" third party.
- Bid : The bid price reported by the Toronto Stock Exchange, as of the close on the effective date of the publication
- Ask : The aski price reported by the Toronto Stock Exchange, as of the close on the effective date of the publication
- YTW (bid) : The Yield-To-Worst of the security, based on the bid price, the dividend rate, the Limit Maturity End Price, the End Date and the effect of potential redemptions of the issue. It is presumed that the issuer will make redemption decisions that work out to be the worst for investor, in terms of calculated yield.
- YTW (ask) : The Yield-To-Worst of the security, based on the ask price, the dividend rate, the Limit Maturity End Price, the End Date and the effect of potential redemptions of the issue. It is presumed that the issuer will make redemption decisions that work out to be the worst for investor, in terms of calculated yield.
- ModDur : The Modified Duration of the instrument, according to the HIMIPref™ calculation.
- Limit Maturity End Price : The price of the security thirty years hence, which is the current price less an allowance taking into account that since in this scenario the issue has not been redeemed the probability distribution after thirty years is skewed towards lower prices.
- End Date : The end date of the scenario used for YTW calculation, which may be thirty years hence, if the issue is expected to remain outstanding, or a nearer time if the issue is presumed to be called
Supplementary Charts: A discussion of market behaviour over the past month, with notes regarding important aspects of the market I feel investors should take into account.

Special Appendices

Published irregularly, usually when I feel that there is some important aspect of the market that should be examined mathematically.

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	Format of PrefLetter: Appendices
	Useful Articles Several appendices appear in every edition of PrefLetter (until a major change is announced!); there are also occasional "Special Appendices" Regular Appendices Appendix FR: This appendix provides data regarding FixedReset and FloatingReset issues, divided into two main sections &emdash; Investment Grade (rated Pfd-2(low) and higher by DBRS) and Sub-Investment Grade (rated Pfd-3(high) and lower by DBRS. The table contains the following fields: Ticker : The ticker symbol of the issue Initial Dividend : The initial or current dividend of the issue; data in this column will contain the announced reset rate of the issue if the PrefLetter edition is published following the announcement but prior to the effective date of the reset. Spread on Reset : The spread to 5-Year Canada Bonds (FixedReset) or to 3-Month Treasury Bills (FloatingReset) for potential future resets to the dividend rate. Reset Date : The next reset date of the security Next Ex-Dividend Date : The presumed next ex-dividend date for the security. This will usually be an estimate, being approximately three months following the prior ex-dividend date, but is sometimes the actual date, if the announcement has been made. When trading securities near to their ex-dividend date, it is strongly recommended that investors verify the exact date with the company or an authoritative "live" third party. YTW : The Yield-To-Worst of the security, based on the bid price, the initial dividend, the spread on reset, and the five-year Canada bond rate assumed for the purpose of this calculation (disclosed at the bottom of the tables), and the effect of potential redemptions of the issue. It is presumed that the issuer will make redemption decisions that work out to be the worst for investor, in terms of calculated yield. Bid : The bid price reported by the Toronto Stock Exchange, as of the close on the effective date of the publication Ask : The aski price reported by the Toronto Stock Exchange, as of the close on the effective date of the publication Note 1 : A note regarding the calculation, disclosing the YTW scenario (e.g., "To Perpetuity" or blank for a call) and a note that an announced future, but not yet effective, dividend rate has been used Note 2 : Other information regarding the issue - e.g. it may be "ROC" (Return of Capital and, usually, interest treatment of distributions) or it may have a minimum reset rate Appendix SP: This appendix provides data regarding PerpetualPremium and PerpetualDiscount issues ("Straight Preferreds") divided into two main sections &emdash; Investment Grade (rated Pfd-2(low) and higher by DBRS) and Sub-Investment Grade (rated Pfd-3(high) and lower by DBRS. The table contains the following fields: Ticker : The ticker symbol of the issue Dividend Rate : The dividend rate paid on the issue Next Ex-Dividend Date : The presumed next ex-dividend date for the security. This will usually be an estimate, being approximately three months following the prior ex-dividend date, but is sometimes the actual date, if the announcement has been made. When trading securities near to their ex-dividend date, it is strongly recommended that investors verify the exact date with the company or an authoritative "live" third party. Bid : The bid price reported by the Toronto Stock Exchange, as of the close on the effective date of the publication Ask : The aski price reported by the Toronto Stock Exchange, as of the close on the effective date of the publication YTW (bid) : The Yield-To-Worst of the security, based on the bid price, the dividend rate, the Limit Maturity End Price, the End Date and the effect of potential redemptions of the issue. It is presumed that the issuer will make redemption decisions that work out to be the worst for investor, in terms of calculated yield. YTW (ask) : The Yield-To-Worst of the security, based on the ask price, the dividend rate, the Limit Maturity End Price, the End Date and the effect of potential redemptions of the issue. It is presumed that the issuer will make redemption decisions that work out to be the worst for investor, in terms of calculated yield. ModDur : The Modified Duration of the instrument, according to the HIMIPref™ calculation. Limit Maturity End Price : The price of the security thirty years hence, which is the current price less an allowance taking into account that since in this scenario the issue has not been redeemed the probability distribution after thirty years is skewed towards lower prices. End Date : The end date of the scenario used for YTW calculation, which may be thirty years hence, if the issue is expected to remain outstanding, or a nearer time if the issue is presumed to be called Supplementary Charts: A discussion of market behaviour over the past month, with notes regarding important aspects of the market I feel investors should take into account. Special Appendices Published irregularly, usually when I feel that there is some important aspect of the market that should be examined mathematically.