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Anglo bonds

thee glitz · 2011-06-19 20:26:38

Am i missing something here... In general, corporate bonds are issued with coupon (interest) payments which ensure they will price near par ie. you pay approx what you expect to receive at the maturity of the bond and the coupon payments reflect the risk that you are taking on. Except if you invest in Anglo. You invest in…

19-06-2011 8:26pm

#1

thee glitz

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Am i missing something here...

In general, corporate bonds are issued with coupon (interest) payments which
ensure they will price near par ie. you pay approx what you expect to receive
at the maturity of the bond and the coupon payments reflect the risk that you
are taking on.

Except if you invest in Anglo. You invest in sub-ordinated bonds,
rewarded by a higher interest rate for the additional risk you assume as you dont
get paid unless senior debt holders do, but then expect to be paid in full even
though the institution crumbles. What?

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Comments

#2 19-06-2011 11:24pm

andrew

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Moved to the investments and markets forum

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