I agree, I think RHCPA is mispriced in the market. I assume that...

I agree, I think RHCPA is mispriced in the market. I assume that it is priced higher than the bank hybrids as bank profits are presently perceived to be in a downward trend, whereas RHC is perceived to have defensive income and profit. Also the bank hybrids have caveats that increase their risk in the event of a bank run.

In actual fact, RHC's credit ratios are not attractive - they are carrying a lot of debt, three times the level of only three years ago. I think the RHC ords are a better risk/reward proposition than the hybrid, as the hybrid really has no credit protection over the ords in the event of liquidation - NTA per share is a large negative number. I should qualify this by saying that I don't see RHC getting into a credit problem in the foreseeable future - but when you invest in credit securities (as opposed to equity), then "crash risk" is paramount as there is no upside from growth, but full downside risk.

A better comparison would be RHCPA vs SVWPA - they are paying similar coupon margins, however SVW is well and truly on the nose as far as the market is concerned. SVW's credit metrics are much better than RHC and SVWPA has real credit protection over the ords. They are actually a better credit investment, but have traded down to half the price of RHCPA recently.