RE:RE:Tax Changes and Dividends and BPO.PR.EHi Pierre.
I like your play on the Ts -- the high current dividend lowers duration (if we can use that term for prefs) and payback period in a very pleasing way.
However, the Ts (and the As, with reset on the horizon) are benefiting from the luck of timing. Their terms are significantly worse than those of the Es, and it is rational to expect that the luck will even out over time.
T $14.41 +316 on par, +548 on price, CY 11.78%
A $12.94 +315 on par, +609 on price, CY 9.10%
E $12.48 +396 on par, +793 on price, CY 11.08% minimum div 5.10% on par, 10.22% on price
When adjusted for price -- for example, what one can buy in Es on terms of Ts, being -- the Es are even better of course:
+460 on par, +927 on price , CY 12.88%, min div 5.92% on par, 11.94% on price
Do I think that GoC will be lower in March 2027? Yep, but not with so much conviction that I'd pass on a 10.22% minimum dividend forever, with the potential for much higher with that juicy +793 spread and a long time to run before call risk is a concern. Compare that to discount perpetuals with 6.50% YTW (per James at prefblog) with that yield being perhaps overstated given substantial call risk. Remember that straight perpetual call risk is a function of both the benchmark rate -- GoC30 -- and issuer credit risk, so the value of the call within YTW is substantial (and, in my mind, not properly compensated).
I have traded in and out of the As but am currently holding a good whack on the theory that Mr. Market's love of current yield (as you are enjoying with the Ts) is likely to lead to gains as we close in on December. From a value perspective, though, the Es are trading stupid cheap versus the rest of the complex.
If my theory that someone trading at TD has to get out for taxes by today, we'll look back wistfully at $12.40ish for the Es. Maybe it's a hedgie trying to push down the complex one series at a time, but not sure why they'd choose to focus on the Es. Hmmm.
Anyway, we'll see Monday am!