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Q. -- Isn't the second scenario better? A. -- Not if you are a corporate bond holder.
7.05pm Sweet Reason (nb) 7.43pm Marketing Mix 8.21pm Dance To Bristol 9.05pm Reneesgotzip 9.43pm Bond Holder 10.22pm The Fugue 11.01pm Justin Phillip 11.40pm Wise Dan 12.35am Declaration Of War (nap) All times GMT.
"If the government has the ability to abrogate the contract at will and at the expense of the bond holder, the investor is going to do one of two things: require a tremendous premium for the risk they are incurring, or just not invest at all," Mr. Bentsen said.
A high-yield bond carries a higher default probability, which the bond holder is willing to bear.
Alternatively, some agency bonds are issued with a put provision exercisable by the bond holder, which can benefit the purchaser if yields rise.
A typical convertible bond gives the bond holder the option to convert the debt into a predetermined number of shares at a predetermined price at some point in the future.
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But that did not happen to bank bond holders.
In essence, this would mean a bailout of bond holders.
Fourth, bond holders, including banks, will face losses associated with the haircut imposed on the bonds.
Bond holders, such as Syncora, a bond insurer, had to accept a huge haircut.
Imperial's bond holders will receive £60,370 ($112,209) for each $100,000 in debt they hold.
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