Q: Assuming the RY.PR.H rate reset preferred resets today I have made the following new interest rate calculation;
The new interest rate is the GCAN5YR interest rate plus 2.26%. Today the GCAN5YR is 1.368% so 1.368 plus 2.26 equals 3.628%. This is below the initial 5 year interest rate of 3.9%. I calculate the actual Fixed Rate Calculation Date is August 24, 2019 minus 30 days is July 25 2019, which is only a month & a half away. At that time the GCAN5YR rate will probably be the same as today. Would you please confirm that my new interest rate calculation is correct. Today the RY.PR.H on the TSX is trading at a yield of 5.5%. If my calculations are correct, is the price falling because no one wants to own this preferred when the new lower interest rate is determined. Would appreciate your thoughts. Thanks .. Cal
The new interest rate is the GCAN5YR interest rate plus 2.26%. Today the GCAN5YR is 1.368% so 1.368 plus 2.26 equals 3.628%. This is below the initial 5 year interest rate of 3.9%. I calculate the actual Fixed Rate Calculation Date is August 24, 2019 minus 30 days is July 25 2019, which is only a month & a half away. At that time the GCAN5YR rate will probably be the same as today. Would you please confirm that my new interest rate calculation is correct. Today the RY.PR.H on the TSX is trading at a yield of 5.5%. If my calculations are correct, is the price falling because no one wants to own this preferred when the new lower interest rate is determined. Would appreciate your thoughts. Thanks .. Cal