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Hi Ozeb,The bank hybrids have one nasty clause which the Ramsay...

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boomeronrations

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19/03/20

21:24

Post #: 43593165
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Originally posted by ozeb: ↑

I'm invested in CBCPD which has its next call date in Dec 2022. Currently trading well below its $100 nominal value.
But Ramsay's FRN is trading at a decent $101.50 and it's perpetual. Perpetual notes usually trade well below $100.
How come the CBA note is trading at such a discount? I would have thought that the Ramsay note was a riskier product.

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Hi Ozeb,
The bank hybrids have one nasty clause which the Ramsay notes do not have.
http://www.fundsfocus.com.au/managed-funds/pdfs/ipo/cba-perls-7-analysis.pdf

It relates to the regulator having the power to write them off to protect the viability of the bank.
They can only be repaid with the regulator's permission.
This is why they have taken a bit of a pasting lately.

I have too many of them.

cheers
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