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Fitch Ratings-Liquidity and Covenant Analysis for Large U.S. Leveraged Issuers
June 24, 2011--Credit Improvement Plateaus as Issuers Focus on Refinancing
Liquidity and Free Cash Flow Remain Strong: In aggregate, near-term liquidity remains ample as 71% (22 in total) of the issuers studied have more than a combined $1 billion in cash
and revolver availability. The number of issuers with negative FCF on an LTM basis was unchanged from the last period at 19%.
As in previous periods, companies continue to use cash,
in addition to FCF, for strategic opportunities, acquisitions, dividends, debt repayment, and recently for share repurchases. Cash levels-although still robust -trended lower for 18 of the 31 issuers studied, compared to the previous period.
Covenant Cushions Tighten: Covenant cushions contracted for 19% of the issuers (six in total) from Dec. 31, 2010 to March 31, 2010, by an average of 2.8%. Nonetheless, covenant headroom remains adequate for most of the issuers studied. Only two issuers experienced a covenant stepdown during the period, while one issuer experienced a loosening of its covenant. Eight companies (down from nine in the last report) are in a position where a 20% (or less) decline in EBITDA would trip their tightest covenant. MGM International continues to have the tightest covenant cushion at 10%.
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Source: Fitch Ratings
Maple Group Receives Endorsement From Stephen Jarislowsky
June 24, 2011--Maple Group Acquisition Corporation ("Maple"), a corporation whose investors comprise 13 of Canada's leading financial institutions and pension funds, released a statement it received from Stephen Jarislowsky, Chairman, C.E.O. and Director of Jarislowsky Fraser Limited.
We can grow internationally
The London Stock Exchange is promising to take the TMX and its companies into the international arena. With all due respect for our friends in London, Canada and its financial community do not need their assistance to ensure their development on the international scene.
How can the fact of wanting to develop one's own stock exchange be construed as evidence of an introverted or protectionist attitude? Does it mean we should remain silent and let our companies and institutions leave even if we firmly believe we are in the best position to help them grow--locally as well as internationally--for the benefit of our country? The TMX's takeover by the London Stock Exchange will result in a weakening of Canada's financial community. We are at risk of seeing an exodus of our financial institutions and our brightest financial talents.
Source: Maple Group Acquisition Corporation
Release Of June 21-22 FOMC Mins Moved To July 12
June 24, 2011--The minutes of the Federal Open Market Committee (FOMC) meeting of June 21-22, 2011, will be released at 2 p.m. EDT on Tuesday, July 12, 2011, a day earlier than usual. The release date was rescheduled in light of the timing of the House Financial Services Committee hearing on July 13 to receive the Federal Reserve Board's Monetary Policy Report to the Congress.
The minutes of each regularly scheduled meeting of the FOMC are ordinarily made available three weeks after the day of the policy decision. A summary of economic projections made by the Federal Reserve Board members and Reserve Bank presidents for the June 21-22 meeting will be included as an addendum to the minutes.
Source: Federal Reserve
Banks lose out as Washington rigs the rules
June 24, 2011--It was after the American civil war that US banks were first told to put their money in government securities to help refinance and repay wartime debts. Today the banks are once again ramping up their holdings of Treasury debt, albeit for more complicated reasons in another round of what economists refer to as “financial repression”.
No wonder the public markets hate the banks. Every day they appear more like boring utilities in the best case, and like Japan’s zombie banks in the worst case.
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Source: FT.com
Scwab files with the SEC
June 24, 2011--Charles Schwab has filed a post-effective amendment No. 10 with the SEC for the Schwab U.S. REIT ETF.
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Source: SEC.gov
Forum Investment Advisors, LLC files with the SEC
June 24, 2011--Forum Investment Advisors, LLC has filed an application for exemptive relief with the SEC for actively-managed ETFs.
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Source: SEC.gov
DB Global Equity Research: North America-US ETF Market Weekly Review : $12bn SPY related inflows push ETP AUM higher
June 23, 2011--Massive inflows, but the true story is that we are still in risk-off mode
The latest parade of weak US Economic data has put undue pressure in the Equity markets leading it to a straight 6-week losing streak, most recently. However, last week Equity markets in the US (S&P 500) were able to snap the losing streak with a 0.04% nominal gain.
Last week, total US ETP flows from all products registered $10.1bn of inflows vs $0.4bn of outflows the previous week, setting the YTD weekly flows average at +$2.3bn.
US ETP AUM gained $2.9bn, closing at $1.056 trillion or 6.1% up YTD.
Last week’s flows were inflated by a $12bn inflow into SPY which may be related to S&P 500 rebalancing and quadruple witching week activity, and thus deemed temporary. Therefore we think that long-only Equity ETP flows (ex last week’s SPY inflows) suggest that investors are in risk-off mode, however the flattening of the Fixed Income ETP flows coupled with the mild inflows into Commodities, and the S&P 500’s snap of its 6-week losing streak could suggest that investors have begun to move to standby mode.
Long only equity ETPs recorded $9.2bn of inflows last week vs $583m of outflows the previous week. From a geographic allocation perspective, EM ETPs registered outflows of $548m, followed by DM ex US with outflows of $191m and Global ETPs with outflows of $157m; while US ETPs recorded inflows of $10.1bn.
Long-only fixed Income ETPs recorded inflows of $44m last week. Broad Benchmarked funds had $292m inflows, followed by Sovereign ETPs with $143m. Corporates had the largest outflows (-$496m). Commodity ETPs recorded inflows of $239m. At a sector level, Precious Metals ETPs recorded the largest inflows with $192m. Gold and Crude Oil ETPs recorded the largest inflows with $457m and $107m, respectively; while Silver ETPs had the largest outflows (-$235m).
New Launch Calendar: Income, FX risk management, Leverage & more
There were 17 new ETPs and 2 new ETNs listed in the NYSE Arca during the past 2 weeks. These new ETPs offer a vast range of exposures and tools such as income generation, embedded FX risk management, leveraged returns, and fundamental strategies, to name a few.
Turnover Review: Floor activity rose in all asset classes on higher volatility
Total weekly turnover increased by 19.2% to $407bn vs. $342bn in the previous week. Equity ETP turnover increased $60.2bn or by 19.8% to $364bn. Commodity ETPs turnover also increased by 1.2bn or 11.2%, totaling a weekly turnover of $24.2bn last week. Moving on to Fixed Income products, weekly turnover rose by 12.1% totaling $15bn at the end of last Friday. Finally, Currency ETPs also experienced a significant increase of $1.2bn or 46.5% on a WoW basis.
Assets Under Management (AUM) Review:
SPY flows push the AUM higher
The, now usual, quadruple witching plus rebalancing week SPY ETF inflows kept AUM above water in spite of the flat/lagging equity markets. ETP AUM rose by $3.0bn or 0.3% as of the end of last week reaching $1.056 trillion. On a YTD basis AUM has risen by $61bn or a 6.1%.
to request report
Source: Deutsche Bank - Equity Research
Invesco PowerShares Announces Changes to ETF Family
June 23, 2011--Invesco PowerShares Capital Management LLC, a leading global provider of exchange-traded funds (ETFs) with more than $60 billion in franchise assets, announced changes to its PowerShares family, one of the broadest in the marketplace today. In a continuing effort to proactively
address the growing needs of ETF investors and to position for future growth opportunities, Invesco
PowerShares announced that it plans to close two of its Active ETF portfolios.
The affected ETFs are listed below:
PowerShares Active Alpha Multi-Cap Fund-Ticker Symbol: PQZ
PowerShares Active AlphaQ Fund- Ticker Symbol: PQY
“We regularly review our family of ETFs, carefully evaluating numerous factors such as investment results, length of time in the market, investor interest, and the potential for future growth," said Ben Fulton, Invesco PowerShares managing director of global ETFs. “Based on this assessment, we believe that it’s in the best interest of our investors that we refocus our resources on areas that we believe are of greater client interest.”
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Source: Invesco PowerShares Capital Management LLC
Standard & Poor's Announces Changes In The S&P/TSX Venture Composite Index
June 23, 2011--Standard & Poor's will make the following changes in the S&P/TSX Venture Composite Index after the close of trading on Thursday, June 23, 2011:
Lion Energy Corp. (TSXVN:LEO) will be removed from the index. The company will be delisted from the TSX Venture Exchange at the request of the company.
The Skor Food Group Inc. (TSXVN:SKF) will be removed from the index. The shares of the company have been acquired by Colabor Group Inc.
Company additions to and deletions from an S&P equity index do not in any way reflect an opinion on the investment merits of the company.
Source: Standard & Poor's
Standard & Poor's Announces Changes In The S&P/TSX Canadian Indices
June 23, 2011--Standard & Poor's Canadian Index Operations announces the following index changes:
The shareholders of TimberWest Forest Corp. (TSX:TWF.UN) have accepted the $CDN6.16 cash per unit offer from the British Columbia Investment Management Corporation (bcIMC) and the Public Sector Pension Investment Board (PSP Investments).
TimberWest will be removed from the S&P/TSX SmallCap Index after the close of Tuesday, June 28, 2011.
Company additions to and deletions from an S&P equity index do not in any way reflect an opinion on the investment merits of the company.
Source: Standard & Poor's
