{"id":24429,"date":"2014-02-11T23:59:49","date_gmt":"2014-02-12T04:59:49","guid":{"rendered":"http:\/\/prefblog.com\/?p=24429"},"modified":"2014-02-11T23:59:49","modified_gmt":"2014-02-12T04:59:49","slug":"are-cocos-a-good-fit-for-your-clients","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=24429","title":{"rendered":"Are &quot;CoCos&quot; a good fit for your clients?"},"content":{"rendered":"<p>Andrew Allentuck was kind enough to quote me in his latest piece for Investment Executive, <a href=\"http:\/\/www.investmentexecutive.com\/-\/are-cocos-a-good-fit-for-your-clients-\">Are \u201cCoCos\u201d a good fit for your clients?<\/a>:<\/p>\n<blockquote><p>&#8220;They can call these bonds Tier 1 capital, which is equivalent to common equity,&#8221; says James Hymas, president of Hymas Investment Management Inc. in Toronto, &#8220;but [the bonds] get a better or more efficient treatment of the cost on income statements. A lot of portfolio managers will buy them because they have a mandate to invest in bonds, and these hybrids meet the definition of a bond and have terrific interest. Clients may be naive enough to accept these hybrids for their portfolios. But what clients forget is that in exchange for a yield pickup of a few hundred basis points over other corporate debt, a loss could approach 100%.&#8221;<\/p>\n<p>In the search for yield, hybrids are the latest twist in the old idea of compromising the promise of a traditional bond to pay interest and principal on time, Hymas adds: &#8220;Many of these structures will go into bond indices. Index funds would have to buy them and some fund managers would then have to take them on, too.<\/p>\n<p>&#8220;I would not be averse to buying them,&#8221; he continues. &#8220;But I would do it for a bond portfolio, which the client fully understands and accepts.&#8221;<\/p><\/blockquote>\n","protected":false},"excerpt":{"rendered":"<p>Andrew Allentuck was kind enough to quote me in his latest piece for Investment Executive, Are \u201cCoCos\u201d a good fit for your clients?: &#8220;They can call these bonds Tier 1 capital, which is equivalent to &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[19],"tags":[],"class_list":["post-24429","post","type-post","status-publish","format-standard","hentry","category-press-clippings"],"_links":{"self":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/24429","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=24429"}],"version-history":[{"count":0,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/24429\/revisions"}],"wp:attachment":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=24429"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=24429"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=24429"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}