On Wednesday, the S&P 500 was up 0.8% and Toronto was up 0.2%.
Toll Brothers was up 5.1%. Constellation Software was up 3.6%.
Yesterday I mentioned the convertible debenture that Cineplex was offering. The reason the exact interest rate and conversion price were not known is that this was not a “bought deal”. Usually, the big banks effectively guarantee to buy any shares (debentures in this case) that they can’t sell. But usually they can easily sell the full amount. In this case the big banks must not have been sure they could sell all these debentures therefore they simply tried to sell it toretail investors but nid not guarantee a price in a “bought deal”. The interest rate was dependent on how much demaind there was for the debentures. It took a day and hald to sell out. Most new issues sell out in an hour or two. Due to the lack of demand the final interest rate came in at the high end of the expected range at 5.75%. And the conversion price came in fairly low at $10.94. That compares to Cineplex’s share price of $8.58. This debenture may end up being a good investment since as long as Cineplex survives it will pay 5.75%. And if Cineplex returns to more normal revenues and/or collects a big payouit from Cineworld then the conversion option would provide a good capital gain.