Canadian Western Bank Pref shares updated

The reports on the Canadian Western Bank CWB.PR.B and CWB.PR.D are updated. With their recent price increases I don’t really like either one.

I would Sell the CWB.PR.B at $22.50. That’s 27% higher than it was at our last update on December 13. It’s hard to imagine now that this was languishing at about $13 for three months last year (April through June). 

The CWB.PR.D seems somewhat more attractive at $26.65. But the problem is that if it is redeemed at $25 on the reset date in three years, that will lead to a 6% capital loss which wipes out just over a year of dividend income. I’d be interested in this one if I could get in down around $26. Hopefully, CWB will not redeem it. That will depend on the market spread over the 5 year Canada. The prudent assumption however, is to assume they will redeem at $25 in which case this rate reset pref is not attractive. 

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