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We may well be returning all our Christmas present for cash this year:
A gauge of global stocks tumbled on Friday after weak economic data from China and Europe intensified global growth worries as investors weighed the broader impact of the trade dispute between the United States and China.
…
On Wall Street, U.S. stocks were not only hampered by growth worries but by a drop in Johnson & Johnson shares, which lost 10.04 per cent, its biggest drop since 2002, as the biggest drag on both the Dow and S&P 500. The company’s stock fell after Reuters reported that the pharma major knew its baby powder was contaminated with cancer-causing asbestos.The Dow is now down more than 10 per cent from its Oct. 3 high, putting each of the three major U.S. indexes in correction territory.
…
The Dow Jones Industrial Average fell 496.87 points, or 2.02 per cent, to 24,100.51, the S&P 500 lost 50.59 points, or 1.91 per cent, to 2,599.95 and the Nasdaq Composite dropped 159.67 points, or 2.26 per cent, to 6,910.67.The energy sector pushed Canada’s main index lower on Friday, as oil prices declined after China reported slower economic growth, pointing to lower fuel demand from the world’s biggest oil importer.
The Toronto Stock Exchange’s S&P/TSX composite index unofficially closed down 155.28 points, or 1.05 per cent, at 14,595.07. It was a fresh two-year low.
| HIMIPref™ Preferred Indices These values reflect the December 2008 revision of the HIMIPref™ Indices Values are provisional and are finalized monthly |
|||||||
| Index | Mean Current Yield (at bid) |
Median YTW |
Median Average Trading Value |
Median Mod Dur (YTW) |
Issues | Day’s Perf. | Index Value |
| Ratchet | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -2.3723 % | 2,385.3 |
| FixedFloater | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -2.3723 % | 4,376.9 |
| Floater | 4.90 % | 5.24 % | 43,303 | 15.12 | 4 | -2.3723 % | 2,522.5 |
| OpRet | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.4093 % | 3,144.6 |
| SplitShare | 4.68 % | 5.54 % | 90,768 | 4.59 | 7 | -0.4093 % | 3,755.4 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.4093 % | 2,930.1 |
| Perpetual-Premium | 5.59 % | 4.58 % | 138,240 | 0.08 | 2 | -0.4945 % | 2,860.5 |
| Perpetual-Discount | 5.74 % | 5.92 % | 77,065 | 13.93 | 33 | -0.1536 % | 2,879.8 |
| FixedReset Disc | 5.04 % | 5.54 % | 209,020 | 14.47 | 66 | -0.3438 % | 2,227.8 |
| Deemed-Retractible | 5.51 % | 7.40 % | 98,471 | 5.15 | 27 | 0.1334 % | 2,874.1 |
| FloatingReset | 4.11 % | 4.75 % | 41,454 | 2.97 | 7 | -0.5299 % | 2,453.3 |
| FixedReset Prem | 5.16 % | 4.29 % | 294,902 | 2.41 | 14 | -0.5189 % | 2,510.0 |
| FixedReset Bank Non | 2.99 % | 4.36 % | 134,526 | 2.92 | 6 | -0.1242 % | 2,557.6 |
| FixedReset Ins Non | 4.98 % | 8.16 % | 143,806 | 5.20 | 22 | -0.4070 % | 2,246.2 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| PWF.PR.Q | FloatingReset | -4.68 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-12-14 Maturity Price : 15.49 Evaluated at bid price : 15.49 Bid-YTW : 5.30 % |
| HSE.PR.A | FixedReset Disc | -4.33 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-12-14 Maturity Price : 13.25 Evaluated at bid price : 13.25 Bid-YTW : 6.77 % |
| HSE.PR.G | FixedReset Disc | -4.33 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-12-14 Maturity Price : 19.66 Evaluated at bid price : 19.66 Bid-YTW : 6.99 % |
| BAM.PR.K | Floater | -3.69 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-12-14 Maturity Price : 13.05 Evaluated at bid price : 13.05 Bid-YTW : 5.30 % |
| HSE.PR.E | FixedReset Disc | -3.08 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-12-14 Maturity Price : 19.82 Evaluated at bid price : 19.82 Bid-YTW : 6.98 % |
| RY.PR.O | Perpetual-Discount | -2.80 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-12-14 Maturity Price : 22.94 Evaluated at bid price : 23.29 Bid-YTW : 5.29 % |
| TRP.PR.B | FixedReset Disc | -2.79 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-12-14 Maturity Price : 13.22 Evaluated at bid price : 13.22 Bid-YTW : 6.11 % |
| BAM.PR.B | Floater | -2.76 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-12-14 Maturity Price : 13.03 Evaluated at bid price : 13.03 Bid-YTW : 5.31 % |
| TD.PF.C | FixedReset Disc | -2.75 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-12-14 Maturity Price : 19.46 Evaluated at bid price : 19.46 Bid-YTW : 5.55 % |
| SLF.PR.J | FloatingReset | -2.63 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 15.19 Bid-YTW : 12.34 % |
| BNS.PR.I | FixedReset Disc | -2.18 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-12-14 Maturity Price : 22.43 Evaluated at bid price : 23.29 Bid-YTW : 4.96 % |
| TRP.PR.C | FixedReset Disc | -2.15 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-12-14 Maturity Price : 14.12 Evaluated at bid price : 14.12 Bid-YTW : 6.12 % |
| TD.PF.B | FixedReset Disc | -2.09 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-12-14 Maturity Price : 19.70 Evaluated at bid price : 19.70 Bid-YTW : 5.53 % |
| MFC.PR.F | FixedReset Ins Non | -2.05 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 14.79 Bid-YTW : 12.66 % |
| IAG.PR.I | FixedReset Ins Non | -2.02 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 21.80 Bid-YTW : 7.43 % |
| BMO.PR.T | FixedReset Disc | -1.92 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-12-14 Maturity Price : 19.45 Evaluated at bid price : 19.45 Bid-YTW : 5.54 % |
| HSE.PR.C | FixedReset Disc | -1.88 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-12-14 Maturity Price : 18.75 Evaluated at bid price : 18.75 Bid-YTW : 6.86 % |
| BMO.PR.Y | FixedReset Disc | -1.87 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-12-14 Maturity Price : 20.50 Evaluated at bid price : 20.50 Bid-YTW : 5.74 % |
| IFC.PR.C | FixedReset Ins Non | -1.84 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 18.69 Bid-YTW : 9.57 % |
| CM.PR.O | FixedReset Disc | -1.81 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-12-14 Maturity Price : 19.55 Evaluated at bid price : 19.55 Bid-YTW : 5.63 % |
| BAM.PF.C | Perpetual-Discount | -1.70 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-12-14 Maturity Price : 19.69 Evaluated at bid price : 19.69 Bid-YTW : 6.19 % |
| PWF.PR.A | Floater | -1.67 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-12-14 Maturity Price : 17.10 Evaluated at bid price : 17.10 Bid-YTW : 4.08 % |
| IFC.PR.G | FixedReset Ins Non | -1.64 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 21.00 Bid-YTW : 8.20 % |
| PWF.PR.T | FixedReset Disc | -1.60 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-12-14 Maturity Price : 20.25 Evaluated at bid price : 20.25 Bid-YTW : 5.53 % |
| RY.PR.N | Perpetual-Discount | -1.60 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-12-14 Maturity Price : 23.04 Evaluated at bid price : 23.40 Bid-YTW : 5.27 % |
| TRP.PR.H | FloatingReset | -1.58 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-12-14 Maturity Price : 13.09 Evaluated at bid price : 13.09 Bid-YTW : 5.58 % |
| BAM.PR.C | Floater | -1.57 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-12-14 Maturity Price : 13.20 Evaluated at bid price : 13.20 Bid-YTW : 5.24 % |
| BAM.PF.G | FixedReset Disc | -1.52 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-12-14 Maturity Price : 20.09 Evaluated at bid price : 20.09 Bid-YTW : 6.06 % |
| SLF.PR.G | FixedReset Ins Non | -1.40 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 15.50 Bid-YTW : 12.09 % |
| TD.PF.A | FixedReset Disc | -1.35 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-12-14 Maturity Price : 19.70 Evaluated at bid price : 19.70 Bid-YTW : 5.49 % |
| EMA.PR.F | FixedReset Disc | -1.31 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-12-14 Maturity Price : 18.79 Evaluated at bid price : 18.79 Bid-YTW : 6.25 % |
| CM.PR.Q | FixedReset Disc | -1.31 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-12-14 Maturity Price : 21.05 Evaluated at bid price : 21.05 Bid-YTW : 5.65 % |
| CGI.PR.D | SplitShare | -1.30 % | YTW SCENARIO Maturity Type : Soft Maturity Maturity Date : 2023-06-14 Maturity Price : 25.00 Evaluated at bid price : 24.21 Bid-YTW : 4.56 % |
| BMO.PR.B | FixedReset Prem | -1.24 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2022-02-25 Maturity Price : 25.00 Evaluated at bid price : 25.58 Bid-YTW : 4.18 % |
| CM.PR.R | FixedReset Disc | -1.20 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-12-14 Maturity Price : 22.87 Evaluated at bid price : 23.95 Bid-YTW : 5.43 % |
| BAM.PF.D | Perpetual-Discount | -1.17 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-12-14 Maturity Price : 20.26 Evaluated at bid price : 20.26 Bid-YTW : 6.07 % |
| W.PR.K | FixedReset Prem | -1.11 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2021-01-15 Maturity Price : 25.00 Evaluated at bid price : 25.02 Bid-YTW : 5.68 % |
| IFC.PR.A | FixedReset Ins Non | -1.09 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 17.32 Bid-YTW : 10.42 % |
| NA.PR.S | FixedReset Disc | -1.07 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-12-14 Maturity Price : 19.39 Evaluated at bid price : 19.39 Bid-YTW : 5.79 % |
| BAM.PF.J | FixedReset Disc | -1.06 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-12-14 Maturity Price : 22.96 Evaluated at bid price : 24.25 Bid-YTW : 5.15 % |
| EIT.PR.B | SplitShare | -1.03 % | YTW SCENARIO Maturity Type : Soft Maturity Maturity Date : 2025-03-14 Maturity Price : 25.00 Evaluated at bid price : 24.05 Bid-YTW : 5.56 % |
| GWO.PR.Q | Deemed-Retractible | 1.01 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 22.05 Bid-YTW : 7.59 % |
| MFC.PR.K | FixedReset Ins Non | 1.03 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 20.56 Bid-YTW : 8.01 % |
| SLF.PR.I | FixedReset Ins Non | 1.08 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 20.59 Bid-YTW : 7.96 % |
| CU.PR.C | FixedReset Disc | 1.22 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-12-14 Maturity Price : 18.26 Evaluated at bid price : 18.26 Bid-YTW : 5.84 % |
| CM.PR.S | FixedReset Disc | 1.30 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-12-14 Maturity Price : 20.99 Evaluated at bid price : 20.99 Bid-YTW : 5.43 % |
| RY.PR.J | FixedReset Disc | 1.31 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-12-14 Maturity Price : 21.38 Evaluated at bid price : 21.69 Bid-YTW : 5.43 % |
| PWF.PR.F | Perpetual-Discount | 1.32 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-12-14 Maturity Price : 21.98 Evaluated at bid price : 22.21 Bid-YTW : 5.99 % |
| TD.PF.J | FixedReset Disc | 1.56 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-12-14 Maturity Price : 21.74 Evaluated at bid price : 22.10 Bid-YTW : 5.41 % |
| BAM.PR.T | FixedReset Disc | 1.59 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-12-14 Maturity Price : 17.26 Evaluated at bid price : 17.26 Bid-YTW : 6.07 % |
| RY.PR.M | FixedReset Disc | 1.79 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-12-14 Maturity Price : 21.07 Evaluated at bid price : 21.07 Bid-YTW : 5.44 % |
| IFC.PR.F | Deemed-Retractible | 1.86 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 22.51 Bid-YTW : 7.34 % |
| BAM.PR.Z | FixedReset Disc | 2.14 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-12-14 Maturity Price : 21.50 Evaluated at bid price : 21.50 Bid-YTW : 5.75 % |
| CCS.PR.C | Deemed-Retractible | 2.47 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 22.00 Bid-YTW : 7.47 % |
| BIP.PR.F | FixedReset Disc | 2.54 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-12-14 Maturity Price : 22.04 Evaluated at bid price : 22.61 Bid-YTW : 5.63 % |
| BAM.PF.F | FixedReset Disc | 2.55 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-12-14 Maturity Price : 20.53 Evaluated at bid price : 20.53 Bid-YTW : 5.97 % |
| BAM.PF.B | FixedReset Disc | 2.55 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-12-14 Maturity Price : 19.71 Evaluated at bid price : 19.71 Bid-YTW : 5.95 % |
| TRP.PR.F | FloatingReset | 3.06 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-12-14 Maturity Price : 16.49 Evaluated at bid price : 16.49 Bid-YTW : 5.40 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| TD.PF.C | FixedReset Disc | 117,709 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-12-14 Maturity Price : 19.46 Evaluated at bid price : 19.46 Bid-YTW : 5.55 % |
| RY.PR.S | FixedReset Disc | 94,578 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-12-14 Maturity Price : 21.52 Evaluated at bid price : 21.85 Bid-YTW : 5.24 % |
| BNS.PR.I | FixedReset Disc | 90,623 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-12-14 Maturity Price : 22.43 Evaluated at bid price : 23.29 Bid-YTW : 4.96 % |
| TD.PF.K | FixedReset Disc | 88,380 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-12-14 Maturity Price : 21.92 Evaluated at bid price : 22.41 Bid-YTW : 5.29 % |
| TD.PF.A | FixedReset Disc | 82,245 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-12-14 Maturity Price : 19.70 Evaluated at bid price : 19.70 Bid-YTW : 5.49 % |
| TRP.PR.D | FixedReset Disc | 73,353 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-12-14 Maturity Price : 18.31 Evaluated at bid price : 18.31 Bid-YTW : 6.12 % |
| There were 60 other index-included issues trading in excess of 10,000 shares. | |||
| Wide Spread Highlights | ||
| Issue | Index | Quote Data and Yield Notes |
| CM.PR.S | FixedReset Disc | Quote: 20.99 – 21.99 Spot Rate : 1.0000 Average : 0.6637 YTW SCENARIO |
| RY.PR.O | Perpetual-Discount | Quote: 23.29 – 24.05 Spot Rate : 0.7600 Average : 0.4423 YTW SCENARIO |
| BAM.PF.E | FixedReset Disc | Quote: 18.66 – 19.50 Spot Rate : 0.8400 Average : 0.5732 YTW SCENARIO |
| BAM.PF.A | FixedReset Disc | Quote: 21.80 – 22.50 Spot Rate : 0.7000 Average : 0.4568 YTW SCENARIO |
| BAM.PF.G | FixedReset Disc | Quote: 20.09 – 20.70 Spot Rate : 0.6100 Average : 0.3855 YTW SCENARIO |
| GWO.PR.T | Deemed-Retractible | Quote: 22.26 – 22.96 Spot Rate : 0.7000 Average : 0.4841 YTW SCENARIO |
I’ve a question related to the relative ratings of Preferred shares and bonds.
e.g. CU has preferrreds rated P2(H) and long bonds rated as A by DBRS.
What does P2(H) translate into Bond rating? That is, if an issuer had the same financial strength for its bonds that CU has for its preferred shares, what would that rating be? e.g. is it equivalent to BBB or BBB+?
I know it’s kind of apples to oranges, but any insight into this would be appreciated.
S&P makes it explicit in Table 26 of S&P Global Ratings Definitions.
See also the discussion of Notching in the DBRS Criteria: Preferred Share and Hybrid Security Criteria for Corporate Issuers and the “Preferred Share Rating Scale” available in the section “Rating Scales” in the page Understanding Ratings.
On another subject for an illiterate pref blogger: why are Insurance cos 5 year rate reset pref shares down by so much in the last few weeks? GWO.PR.N, MFC.PR.F, SLF.PR.G…. to name a few
Thanks
illiterate pref blogger
Why “illiterate”? Are you trying to be insulting?
why are Insurance cos 5 year rate reset pref shares down by so much in the last few weeks?
They’re down a lot, but by no more than one would expect for ordinary FixedResets with similar Issue Reset Spreads.
The market is not placing any weight on my prediction of “Deemed Maturities” for insurance issues, but I have seen no reason to modify my views. When the current round of comments on ICS 2.0 are published, we may see a little clarity.
The market is not placing any weight on my prediction of “Deemed Maturities” for insurance issues, but I have seen no reason to modify my views
What do you think are the chances that it will never happen? If you can stomach the roller coaster I believe that low reset pref shares are still a good deal since it is very unlikely they will get called and they could deliver a very nice dividend. Even the 3.6% dividend of these reset pref share until they reset I would say is not so bad if you compare it with a 5 years GIC which is the same from EQ Bank but it is more tax friendly for pref shares.
Thank you both for your reply, dodoi and James.
James, I was talking about myself when I wrote illiterate. Sorry for the confusion and thanks again
What do you think are the chances that it will never happen?
I don’t like estimating probabilities for investment results. I mean, sure, it has to be done from time to time because you have to estimate something but more often than not – and quite certainly were I to give a straight answer to this particular question – it’s meaningless gibberish.
I mean, suppose I say there’s a 75% chance that December will end up being a positive month for preferred shares.
If it does turn out to be positive, well then, look how good my estimate was! If it doesn’t, well then, gosh darn it, that 25% chance came through.
Before ascribing any meaning at all to my statement, you would have to collect data regarding all the times I said on the 18th day of the month that the market would close the month up or down, extract the number of times I ascribed a 70%-80% probability to such a view, and then compare the view to actual results. You’d also have to control for the actual trading level of the market at that time, and perhaps other things that might possibly constitute “data” rather than “forecast”. This has been done, to a certain extent, with the “January Effect”, in which January is supposed to give the direction for the full year.
So, if the market actually did go in the ‘expected’ direction 73.38495901289% of the time (investment professionals don’t pay attention to significant digits) after I’d say “75%” then you could say my probability estimate has some forecasting value.
But ain’t nobody does that. Ain’t nobody ever checks up afterward, either, which is why investment gurus can make a good living spouting nonsense for forty straight years.
One day, when I retire and I’m bored on my private Caribbean island (because there’s nothing to do except judge the daily bikini competition), I’ll find something for which there’s a ton of data – say, “Number of Fed policy hikes next year” or “probability of a policy hike at the next meeting”, and perform a solid statistical test of all this stuff. It should be a hoot!
Anyway, I think the chances are excellent that the NVCC rules will be applied to life insurers. OSFI is dovish on the question and even so they say:
… which is exactly what the NVCC rules for banks are.
But, as I say, a new round of comments on ICS 2.0 will be published in the reasonably near future and with any luck we’ll get a bit of clarity. At any rate, as I have whined for years, the market is ascribing a zero probability to such an outcome, so to a certain extent the potential for insurance NVCC is a free option (to the other part of that certain extent, you say ‘well, yeah, but loading up on that option distorts my portfolio’).
Sorry for the confusion
No worries, and welcome to the blog!
Every now and then, somebody who I’ve never heard of communicates with me (on the blog or by eMail) and calls me an idiot because XXX does not have a maturity in its prospectus, blah blah blah. But no harm done.
Anyway, I think the chances are excellent that the NVCC rules will be applied to life insurers
Thank you for your answer. I was looking for an answer like this not for a percentage. NVCC clause would be for me a (huge) bonus not a requirement.