So CGF's capital structure and hence value would be very...

  1. 1,502 Posts.
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    So CGF's capital structure and hence value would be very susceptible to a bond "crash" or sell-off.

    It depends.

    If it is just a broad-based bond sell-off we're talking about (i.e. a generic widening in credit spreads, and/or a rise in benchmark yields), CGF will be largely neutral, because the bulk of their annuity liabilities will also be revalued at a higher base yield and Illiquidity Premium (which is a function of credit spreads). That is exactly what happened in 2016H1 (see my previous post).

    On the other hand, if the bond crash is driven by a large amount of actual defaults (failure to pay, restructuring, etc.) in the bond portfolio, or by a material widening of credit spreads specific to a particular sector (e.g. RMBS/CMBS), then CGF would indeed take a big hit in terms of PCA ratio, in all likelihood.

    Let me know if there is anything unclear.
 
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(20min delay)
Last
$8.02
Change
-0.020(0.25%)
Mkt cap ! $5.527B
Open High Low Value Volume
$8.06 $8.06 $7.95 $2.563M 320.3K

Buyers (Bids)

No. Vol. Price($)
51 9476 $8.01
 

Sellers (Offers)

Price($) Vol. No.
$8.02 11823 14
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Last trade - 12.41pm 07/07/2025 (20 minute delay) ?
CGF (ASX) Chart
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