82.11 -0.15 (-0.19%)
After hours: 4:26PM EST
|Bid||82.07 x 800|
|Ask||83.00 x 1300|
|Day's Range||81.71 - 82.26|
|52 Week Range||65.76 - 82.58|
|Beta (3Y Monthly)||1.05|
|PE Ratio (TTM)||13.09|
|Earnings Date||Nov 30, 2016 - Dec 5, 2016|
|Forward Dividend & Yield||3.21 (3.93%)|
|1y Target Est||88.84|
(Bloomberg) -- Streaming video has been one of the biggest growth stories of the past several years, but even with all the attention that has been paid to the space, the industry is nowhere near full maturity, according to an executive at streaming-platform Roku Inc.“In the long run, the total addressable market for streaming video is all TV money, period,” said Scott Rosenberg, a senior vice president and general manager of Roku’s platform business. Over-the-top (OTT) streaming “lets advertisers do things that they’ve gotten used to in digital but which hasn’t been possible on TV,” such as individually targeting consumers based on user-specific data.Rosenberg compared the industry, specifically streaming-related advertising, to the early days of smartphones, when usage far outpaced how much advertisers focused on them. He cited a study from Magna that suggested 29% of TV viewing was happening outside the traditional model, although only 3% of TV ad budgets were being allocated to streaming services.That imbalance will correct “in a pretty accelerated fashion over the next two or three years,” he said in a phone interview. “Marketers are starting to move their money, and once it begins to happen apace, I think we’ll see a significant outflow.”It will likely take a few years for streaming ad revenue to surpass linear TV, he said, though the trend is accelerating. According to Bloomberg Intelligence, OTT ad revenue is expected to grow to $9 billion by 2023, compared with $4 billion in 2019. The TV advertising market is estimated at around $70 billion.While much of the focus on the sector has been on the fight for audiences between content providers -- both Apple and Walt Disney have recently launched new services, with others on the way, including HBO Max next spring -- Roku has benefited by being a portal to these services, rather than a competitor. Last month, Apple announced that its TV+ app would be available on Roku’s platform, news that was notable as the iPhone maker offers its own streaming hardware.The agreement “validates [Roku’s] dominant role as an aggregator,” and “the content-agnostic nature of its platform will allow more deals with streaming services,” Bloomberg Intelligence wrote.Investors have rewarded Roku’s position within the ecosystem. Shares are up more than 400% thus far this year, making it the biggest gainer in the Russell 1000 index by far. Netflix Inc. is up about 10% thus far in 2019, while Disney has risen 32%.Earlier this month, RBC Capital Markets wrote that Roku was “one of the best plays on ad-supported OTT, with the company being one of the best positioned to take share of the very large, underpenetrated” $70 billion TV advertising spending opportunityRoku posted its sixth straight advance on Friday and has risen more than 30% over that stretch. The gains have coincided with the launch of Disney+, as well as bullish commentary from Bank of America, which on Friday raised its price target and wrote that Roku’s Black Friday discounts are setting it up for “outsized” account growth in the fourth quarter.While the stock struggled in September because of concerns about competition for streaming hardware, Roku’s platform business accounts for a growing percentage of its overall revenue. According to data compiled by Bloomberg, the division comprised nearly 70% of the company’s third-quarter revenue, while the rest came from its players business. Over all of 2018, platforms accounted for just 56.1% of revenue.Roku’s Rosenberg told Bloomberg that the company continued to view linear TV as its biggest competition for near-term growth. “We’re trying to take OTT advertising from a $5 billion market to a market that’s $20, $30, or even $50 billion. However, cord-cutters are leaving paid-TV in droves, and user engagement is on our side. When I started here, there were no networks doing streaming, but now Disney is all-in on a major service. There’s been a series of tipping points for the industry.”He added that he was planning to spend the weekend watching “The Mandalorian,” a new series set in the “Star Wars” universe, now streaming on Disney+.To contact the reporter on this story: Ryan Vlastelica in New York at email@example.comTo contact the editors responsible for this story: Catherine Larkin at firstname.lastname@example.org, Tatiana DarieFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
In this week's cryptocurrency news, Facebook's Libra and China's newfound blockchain and crypto acceptance push other nations to react or potentially be left behind.
RBC Global Asset Management Inc. recognized for investment excellence at 2019 Canada Lipper Fund Awards
RBC Global Asset Management Inc. announces final valuation of RBC Target 2019 Corporate Bond Index ETF
TORONTO , Nov. 14, 2019 /CNW/ - An estimated one million Canadian workers who are "at-risk" of losing their jobs to automation have the foundational skills for the burgeoning health care sector, according to a new report from RBC (www.rbc.com/pagingdrdata). Applying research methodology developed by the Bank to better understand how young Canadians can prepare for a future defined by disruptive technologies, RBC concluded that these vulnerable workers possess key skills that will be especially important in the healthcare sector, including active listening, service orientation, and social perceptiveness and monitoring. "With the right training, many impacted Canadians are well-positioned to cross into the healthcare field, especially those with a combination of social and digital skills," said John Stackhouse , Senior Vice-President, RBC.
The traditional approaches to retirement planning are longer covering all expenses in nest egg years. So what can retirees do? Thankfully, there are alternative investments that provide steady, higher-rate income streams to replace dwindling bond yields.
A look at the shareholders of Royal Bank of Canada (TSE:RY) can tell us which group is most powerful. Institutions...
RBC Global Asset Management Inc. announces October sales results for RBC Funds, PH&N Funds and BlueBay Funds
The U.S. is home to literally thousands of dividend payers, which would seem to eliminate the need to look elsewhere for income. But there's a convincing case to be made for at least a couple dozen Canadian dividend stocks.Newer income investors often look for the highest-yielding dividend stocks. They see a 7% yield as being better than 6%, 8% yields superior to 7%, and so on. But that's a much riskier proposition than it seems; sometimes, high yields are indicative of a troubled stock or company.A safer approach is selecting companies with more reasonable current yields that consistently grow their payouts over time. Here in America, many investors look to the Dividend Aristocrats - a group of 57 dividend stocks in the S&P; 500 that have improved their annual payouts for at least 25 consecutive years. But America isn't the only part of the world with Aristocrats. Canada, for instance, has 82.The Canadian Aristocrats' standards aren't as stringent as those of their U.S. counterpart. To qualify for the Canadian Dividend Aristocrats, a stock must be listed on the Toronto Stock Exchange, be a member of the S&P; Canada BMI (Broad Market Index), increase its annual payout for at least five consecutive years (it can maintain the same dividend for two consecutive years) and have a float-adjusted market cap of at least C$300 million.We've trimmed down that list to 25 Canadian dividend stocks that are best suited for American investors. The following 25 Canadian Dividend Aristocrats trade on either the New York Stock Exchange or Nasdaq, and have increased their dividends annually for at least seven years. SEE ALSO: 20 Dividend Stocks to Fund 20 Years of Retirement
(Bloomberg Opinion) -- Like expensive gems, luxury goods companies have scarcity value. If Bernard Arnault’s LVMH Moet Hennessy Louis Vuitton SE is allowed to get its hands on Tiffany & Co., the American jeweler is unlikely to come up for sale again. That’s something LVMH’s biggest rivals, Kering SA and Cie Financiere Richemont SA, might want to consider carefully.Financially they could both afford to make counterbids for Tiffany. An offer from either Cartier-owning Richemont or Gucci-owning Kering at the $120 per share price proposed by Arnault would lift their net debt to about 2.5 times Ebitda. That’s not too much of a stretch. Kering also has a 15.7% stake in sportswear maker Puma, worth about $1.8 billion, which it could reuse on something more promising.Both companies are no doubt extremely wary of taking on someone with such deep (and well-tailored) pockets as Arnault. But it’s a hard fight to sit out. Of the two, Richemont has most to lose from an LVMH-Tiffany tie up. The combined Franco-American group would take the Swiss giant’s position as the global leader in luxury jewelry, according to Bloomberg Intelligence.Arnault has a track record of turbocharging the brands he adds to his stable. Take the jeweler Bulgari, which has more than doubled its revenue since being bought by LVMH in 2011, according to analysts at Royal Bank of Canada. If LVMH repeated that trick with Tiffany, it would seriously challenge Richemont’s flagship Cartier brand.It would be a leap for Richemont to take on a lot more debt, especially when it’s still integrating the acquisition of online retailer Yoox Net-a-Porter and is developing a web joint venture with Alibaba Group Holdings Ltd. But these distractions might explain Arnault’s tactics in striking now for Tiffany.As for Francois-Henri Pinault’s Kering, it has lived with higher leverage in the past, although it tried to stick within a range of 1-2 times Ebitda. It certainly has room to expand in jewelry. Along with watches, the category accounted for just 6.8% of its sales in 2018. But many of Tiffany’s products are in the so-called “accessible” luxury segment (sometimes priced at about $1,000 or below), which Kering has been moving away from. The French group got rid of most of its stake in Puma last year to focus on the high-end stuff.Another problem for both rivals is that any counterbid would have to be above the $120 per share on the table, and would probably provoke a response from Arnault. The final purchase price would be even more of a stretch. LVMH has a “balance sheet war chest” of more than $20 billion, according to Deborah Aitken of Bloomberg Intelligence.Of course, a competing bid could be funded partly with shares, but Tiffany might well prefer cash.If Richemont and Kering can’t be enticed, the American company will have to persuade LVMH that it’s worth more without the help of an interloper bidding up the price. With its sales going in the wrong direction that looks difficult. But auction or not, it’s Tiffany’s job to make Arnault pay up.\--With assistance from Chris Hughes.To contact the author of this story: Andrea Felsted at email@example.comTo contact the editor responsible for this story: James Boxell at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Andrea Felsted is a Bloomberg Opinion columnist covering the consumer and retail industries. She previously worked at the Financial Times.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
(Bloomberg) -- Investors in Uber Technologies Inc. are bracing themselves for the end of a lockup period on Wednesday that’s expected to flood the market with shares of the ride-hailing giant. Those worries -- following lackluster quarterly results -- sent the company’s stock to an all-time low on Tuesday, after months of downward movement.The lockup period expiry, which will allow early investors to sell stock to a skittish public market, comes on the heels of a rocky earnings report for the company on Monday. Uber’s food-delivery business and bookings growth underperformed investor expectations, overshadowing a pledge by the money-losing company to achieve profitability by 2021.But the stock’s mostly downward trajectory since its much-hyped initial public offering in May has some investors wondering if the deluge of new shares will mark a turning point.“The one thing that is holding back Uber shares is the enormous lockup expiration that starts [Wednesday], and it is tough to get a lot of these long-only investors into the game ahead of such a mass supply hitting the market,” Evercore ISI analyst Benjamin Black said in a phone interview.There’s no consensus on the number of shares that will start trading on Wednesday. RBC Capital Markets analyst Mark Mahaney estimated that roughly 1.7 billion shares will become eligible for sale. Wedbush Securities’ Daniel Ives said he expected 763 million will hit the market. The company had about 1.7 billion shares outstanding as of Sept. 30, according to Bloomberg data.IPO specialist Renaissance Capital estimated that about 1.5 billion shares will be released for trading, which would make the expiration of Uber’s lockup the second-largest ever for a venture capital-backed company, the firm said, behind only Alibaba Group Holding Ltd.’s 1.6 billion shares.Black said it could take the market around 100 days to digest an additional supply of around 1 billion shares, based on current trading volumes.Uber’s earnings on Monday beat estimates on both revenue and loss, and could be encouraging for investors who look most closely at traditional metrics, Black said. Those investors could start taking positions once the market processes the new supply, he added.“It’s just that right now there is a buyers’ strike and the shorts can get pretty aggressive,” Black said.To contact the reporter on this story: Esha Dey in New York at email@example.comTo contact the editors responsible for this story: Brad Olesen at firstname.lastname@example.org, ;Mark Milian at email@example.com, Anne VanderMey, Molly SchuetzFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Uber Technologies Inc.’s new target of achieving profitability by 2021 impressed analysts, even as shares fell amid continued competitive pressures in the food delivery business and ahead of a lock-up expiry on Wednesday.Third-quarter results were weighed down by the Eats segment, where bookings came in well below analysts’ estimates. Overall, the results prompted a mixed response from Wall Street, with analysts at RBC Capital Markets and Morgan Stanley boosting their price targets noting signs of improvement in the main ride-hailing unit, while DA Davidson and Wedbush lowered their targets citing negative market sentiment, weak results and slower growth estimates.Analysts also cautioned that longer-term investors becoming able to sell down holdings from Nov. 6 could weigh on the shares.Uber shares fell as much as 9% to an all-time low in New York on Tuesday. Peer Lyft was down as much as 2.2%.Here’s a summary of what analysts have had to say.Citi, Itay Michaeli(Buy, price target $45)More positives than negatives, with clear improvements in ride fundamentals, demonstrated by a segment Ebitda margin of 22% versus 8% in the first quarter.Ride improvements offset Eats softness, which shouldn’t come as a surprise given recent signs of competitive pressures.New break-even target implies at least $1.3b upside to 2021 consensus Ebitda.RBC Capital Markets, Mark S.F. Mahaney(Outperform, price target raised to Street-high $64 from $62)“Bad news. Good news. Great News:” Bookings, users and trips came in slightly lower than expected, while Rides and Eats revenue beat and the Ebitda loss was materially better than expected.Goal of Ebitda profitability in 2021 is achievable, and would be well ahead of Street.Wedbush, Ygal Arounian(Outperform, price target $45 from $58)“Overall this was a B- quarter by Dara & Co. as the company missed underlying bookings and ridesharing metrics which will be viewed mixed to negatively by the Street.”“Despite the clearer path to profitability, mixed results and still-negative investor sentiment is leading to a lower target multiple.”Morgan Stanley, Brian Nowak(Overweight, price target raised to $55 from $53)Target of Ebitda profitability in 2021 is $775m better than Morgan Stanley’s estimate, demonstrating impact of scale, expenditure discipline, and higher efficiency.More importantly, messaging on food delivery indicates market is becoming more rational, although fourth quarter is expected to be another tough one for Eats.New segment disclosures (for example on rides margins) will enable investors to appreciate value of each core businesses.Loop Capital Markets, Jeffrey Kauffman, Rob Sanderson(Buy, price target $48)“Fairly solid results” with better ride revenue and loss margin similar to Lyft Inc. Tough dynamics in Eats, which faces difficult comparatives, was similar to competitor GrubHub Inc.More signs of improvement than deterioration since the IPO. Shares to stabilize once expiration passes.DA Davidson, Tom White(Neutral, price target $35 from $44)“Our 2020 and 2021 revenue estimates decline by 3% and 10%, respectively, due primarily to more conservative Eats growth assumptions.”“Near-term visibility for Eats remains limited in our view, but we continue to believe that, over the long-term, Uber’s multi-product platform can be a critical differentiator in the crowded online food delivery space.”MKM Partners, Rohit Kulkarni(Neutral, price target $32)“Baby step” on path toward profitability, with top and bottom lines beating expectations.That said, “lofty” goal of reaching break-even on Ebitda during 2021 is surprising. Gross bookings continue to decelerate and variable costs, including on marketing, rise.No evidence yet that Uber has been able to stabilize bookings growth via a reduction in incentives offered to both drivers and riders.(Updates share move in fourth paragraph.)\--With assistance from Kit Rees and James Cone.To contact the reporters on this story: Joe Easton in London at firstname.lastname@example.org;Esha Dey in New York at email@example.comTo contact the editors responsible for this story: Beth Mellor at firstname.lastname@example.org, Brad Olesen, Janet FreundFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Royal Bank of Canada is cutting as many as 40 jobs at its investment bank in London, according to people familiar with the changes.The reductions are across RBC Capital Markets and affect areas including investment banking, equity sales and trading, and research, according to the people, who asked not to be identified because the moves haven’t been publicly announced. The cuts represent about 2% of the division’s workforce in the British capital.“We consistently review our businesses to ensure that we are investing in areas which deliver greatest client value and position our business for growth,” Mark Hermitage, a spokesman for RBC Capital Markets, said Tuesday in an interview. “We are consulting with a small number of U.K.-based employees on the potential impact to their roles following a recent business review.”Royal Bank has more than 2,000 employees in RBC Capital Markets in London, and the firm has been adding to those ranks in recent years. To contact the reporters on this story: William Canny in Amsterdam at email@example.com;Doug Alexander in Toronto at firstname.lastname@example.orgTo contact the editors responsible for this story: Michael J. Moore at email@example.com, ;David Scanlan at firstname.lastname@example.org, Steve DicksonFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Modest returns for Canadian Defined Benefit Pension Plans in Q3 2019: RBC Investor & Treasury Services
(Bloomberg) -- Oil closed at a one-week high as investors digested signals that a U.S.-China trade deal is imminent.Futures advanced rose 0.6% in New York on Monday. Chinese government officials are considering locations in the U.S. where leader Xi Jinping would meet U.S. President Donald Trump to sign a trade accord, people familiar with the plans said. Prices erased some of the session’s gains as doubts crept in about the extent and duration of any truce that may emerge.“As the day went on we are getting the same opaqueness about what’s actually occurring in the trade talks,” said Gene McGillian, senior analyst and broker at Tradition Energy Group in Stamford, Conn. “The market is hunting for a driver.”Prices rose as much as 2.2% in earlier trading, spurred on by the trade talks, record stock gains, positive economic data and rising bullish sentiment among money managers.Yet futures remain down about 15% from a late April peak as the trade conflict between the world’s largest economies undermines demand for fuel to run trucks, cars, planes and trains.“We are revisiting optimism about a positive outcome for U.S.-China trade talks, amplified by speculative long positioning,” said Frances Hudson, global thematic strategist at Standard Life Investments in Edinburgh, Scotland. The more recent economic data suggests the threat of recession is receding, she said.West Texas Intermediate for December delivery rose 34 cents to settle at $56.54 a barrel on the New York Mercantile Exchange.Brent for January settlement added 44 cents to close at $62.13 on the London-based ICE Futures Europe Exchange. The global benchmark crude traded at a $5.53 premium to WTI for the same month.Meanwhile, Saudi Arabia is taking measures to help ensure a successful public offering of shares in the kingdom’s oil company. Taxes on the company have been reduced, incentives have been unveiled to entice investors to hold onto their shares, and dividends may be increased.\--With assistance from Alex Longley.To contact the reporter on this story: Jacquelyn Melinek in New York at email@example.comTo contact the editors responsible for this story: David Marino at firstname.lastname@example.org, Catherine Traywick, Joe CarrollFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
MONTREAL , Nov. 1, 2019 /CNW Telbec/ - To help Canadians better understand how to manage their personal finances, McGill University's Desautels Faculty of Management has collaborated with RBC Future Launch and the Globe and Mail to increase access to, and deliver personal finance education to all Canadians across the country for free. The McGill Personal Finance Essentials program launches today, which marks the start of financial literacy month in Canada .
RBC Canadian Core Real Estate Fund raises $1.25 billion in first equity tranche, exceeding subscription targets
(Bloomberg) -- Want the lowdown on European markets? In your inbox before the open, every day. Sign up here.Pound traders looking forward to quiet before the U.K.’s December election could be in for a rude awakening.A gauge of swings in the currency over the next two months is hovering near six-week lows, following a delay to Brexit and signs that a Conservative Party victory could help to stabilize British politics. Yet if the 2017 snap election is anything to go by, a surge in the polls by the Tories’ opponents could still knock the currency off course and drive volatility back up.This time around, turbulence could return on any boost for the Labour party and its socialist agenda, the Brexit party and its no-deal strategy, or a hung Parliament that could prolong the stalemate in Westminster.Two-month volatility jumped when then-Prime Minister Theresa May announced in April 2017 that a snap poll would be held in June the same year. Yet it quickly reversed course and hit fresh cycle lows, before rising again as the election loomed into view.Jeremy Corbyn’s Labour did better than expected and May ultimately lost her parliamentary majority before failing to secure an exit from the EU.“All we can say at this point is, with the Tories no longer the party of no deal, Tories up in the polls is good and Labour up is bad,” said Adam Cole, head of currency strategy at RBC Europe. “We’re stuck in a $1.2750-$1.3000 range until we get a steer either from the polls starting to shift, or the major parties shifting policy.”Options currently show the market cooling off following the most turbulent month for the pound in nearly three years. Realized volatility surged as traders braced for a chaotic exit from the European Union in October, then saw the prospect vanish as Britain secured a third extension, this time until Jan. 31.Concerns about a no-deal Brexit sent the U.K. currency briefly below $1.22 on Oct. 8, only for the pound to enjoy its best two-day run in a decade days later when the potential for a divorce deal sent sterling flying.Short- and medium-term positioning turned more balanced after U.K. Prime Minister Boris Johnson won lawmakers’ backing for his Brexit deal. Appetite for longer term volatility eased further when he secured an election for Dec. 12.Demand for options trades that will pay off following a large swing in the pound before Nov. 31 currently stands near a two-month low. According to Bloomberg’s options-pricing model, there is a 70% probability that the pound will trade within a 1.2650-1.3250 range against the dollar in November.NOTE: Vassilis Karamanis is an FX and rates strategist who writes for Bloomberg. The observations he makes are his own and are not intended as investment advice(Rewrites from paragraph 1.)\--With assistance from Charlotte Ryan.To contact the reporter on this story: Vassilis Karamanis in Athens at email@example.comTo contact the editors responsible for this story: Paul Dobson at firstname.lastname@example.org, William Shaw, Michael HunterFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Sign up to our Brexit Bulletin, follow us @Brexit and subscribe to our podcast.Pound traders are unlikely to find that the promise of a December U.K. election provides an escape from the Brexit maze.The currency was little changed after Prime Minister Boris Johnson won backing in Parliament for a Dec. 12 general election. An election is unlikely to send the pound plunging with the Conservatives ahead in the polls, strategists say. Yet there is enough uncertainty around the result and the Brexit outcome that it also won’t prompt a huge rally.“The most severe of the longer-term structural risks facing the U.K. -- a no-deal crash out -- have all but evaporated,” said Ned Rumpeltin, European head of currency strategy at Toronto-Dominion Bank. “There is a lot of good news in the price, and the balance of headlines may not be as constructive once we head into an election cycle.”The pound is headed for its best month against the dollar since January 2018, with the risk of a no-deal Brexit reduced after lawmakers voted to force Johnson to seek an extension to the deadline. The election now looks set to become a proxy vote on European Union membership.The pound was steady at $1.2863 on Tuesday after Parliament voted, and climbed 0.1% to 86.37 pence per euro. The yield on U.K. 10-year government bonds dipped to 0.71%.Wary InvestorsEven as polls suggest a Tory-led government is the most likely outcome, the market will be mindful of risks around Jeremy Corbyn. Investors have long been wary of a government led by the left-wing Labour leader, who is seen nationalizing parts of the economy, boosting borrowing and redistributing income.There is also the question of how the two main parties position themselves on Brexit. If Labour opts to campaign on a platform of no Brexit or an arrangement where Britain maintains close ties with the EU, while the Conservatives go for a departure at any cost, volatility will likely pick up into the vote, according to Thu Lan Nguyen, a currency strategist at Commerzbank AG.“I wouldn’t expect a large market reaction in pound spot rates,” said Nguyen. “Rather, I think we will see a repricing on options markets, factoring in an increased political risk around the date of the elections.”Option pricing has been subdued in recent days, with implied volatility in the pound staying low in the shorter and longer term. This suggests traders foresee smaller jumps in the currency, reflecting optimism about the fading risk of no-deal, contained by pessimism caused by simmering political uncertainty.Persistent question marks over Brexit itself could also keep a lid on the pound. Traders may also shift their attention to the risk of the second phase of Brexit negotiations when Britain will have to decide its future relationship with the EU.“The capacity for sterling to enjoy a major relief rally that ‘it’s over’ may be more constrained than others may think because, let’s face it, it’s not over,” said Toronto-Dominion’s Rumpeltin. “Not by a long shot.”(Updates with Tuesday’s Parliament vote.)\--With assistance from Katherine Greifeld.To contact the reporters on this story: Charlotte Ryan in London at email@example.com;Anooja Debnath in London at firstname.lastname@example.orgTo contact the editors responsible for this story: Paul Dobson at email@example.com, William Shaw, Michael HunterFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Royal Bank of Canada’s biggest bail-in bond on record saw spreads tighten in secondary trading after the deal was oversubscribed by investors when first sold on Monday.RBC’s C$2.5 billion ($1.91 billion) of five-year notes were quoted at a spread of 96.8 basis points over Canada’s 1.5% bonds due 2024 compared to 97.8 basis points yesterday, according to Bloomberg Valuation bid prices. The deal’s order book was oversubscribed around 1.5 times, people familiar with the transaction said on Monday.The lender’s 2.609% bonds saw this increased demand amid a mixed tone in the global financial markets ahead of the Federal Reserve and Bank of Canada monetary policy meetings on Wednesday.“A benchmark deal of that size will dictate how the bail-in sector trades,” Andrew Torres, chief executive officer at Toronto-based Lawrence Park Asset Management, which manages over C$500 million of assets. “The lead syndicate got the balance right.”Canadian systemic banks began building their buffers of senior bail-in eligible securities in September 2018, and RBC was the first to sell the debt with a C$2 billion dollar deal. The bonds are designed to help prevent a repeat of the 2008 financial crisis when taxpayers worldwide had to rescue banks. Bail-in bonds are riskier than deposit notes because they may be converted to equity in the event a bank runs into trouble.The biggest Canadian banks, including RBC, may together issue at least C$108 billion more of bail-in eligible senior bonds to comply with total loss-absorbing capacity (TLAC) requirements by Nov. 1, 2021, according to latest Bloomberg Intelligence estimates released Sept. 14.RBC last priced a benchmark-size, senior bail-in deal in loonies in July when it sold C$2 billion of five-year securities at a spread of 97.1 basis points over Canada’s 2.5% bonds due 2024, according to data compiled by Bloomberg. A representative for RBC hasn’t replied to a request for comment.To contact the reporter on this story: Esteban Duarte in Toronto at firstname.lastname@example.orgTo contact the editors responsible for this story: Nikolaj Gammeltoft at email@example.com, Christopher DeReza, Allan LopezFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.