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Such holders have scant incentive to trade in their bonds, which already offer some limited legal protection.
As word of trouble at Metropolitan seeped out, its investors started coming into company headquarters to try to cash in their bonds before they had matured.
A large number of veterans who turned in their bonds, which paid 2 1/2% interest, deposited the proceeds in savings accounts which pay approximately 1%.
Still, some analysts have warned that Japan's graying population may begin to retire and cash in their bonds, forcing the government to look abroad for financing.
But in the process, the holdout bondholders have advanced an interpretation of the pari passu clause in their bonds – a clause that appears in all types of bond issues, sovereign and corporate.
Bondholders will be offered a swap deal which involves them initially trading in their bonds, currently paying 11-12% interest, for government loans, paying about 7%, backed by guarantees.
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One can see it every day in their bond spreads.
"And the life insurance industry has taken on the risk in their bond portfolios".
With rates moving down, investors are understandably confounded by losses in their bond portfolios.
Hutton were among those who admitted to suffering losses in their bond trading departments.
The New Yorker, June 27 , 1970 P. 30"Marriages, like chemical unions, release upon dissolution packets of the energy locked up in their bonding".
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