Decision time on low-yield corporate debt

Decision time on low-yield corporate debt

Pension funds and insurers face difficult decisions as rising interest rates lessen the lure of older, low-yield corporate bonds.

Economic Analysis

09 January 2014

Is it time for fund managers to weigh up the benefits of selling low yielding bonds?

Andrew Burton, Head of Liability Management, says funds must weigh up whether to hold onto these bonds and absorb paper losses or sell them to crystallise a loss before switching into other asset classes, credit quality or duration.

Understanding what may motivate or constrain investors holding or selling their stocks of low-yield bonds is vital for any corporate which might be thinking of issuing new debt or buying back old paper.

Read the full article at RBS Insight.

Latest news

RBS to help 2.5 million people each year to be more financially capable

RBS has today committed to helping 2.5 million people in the UK each year to improve their financial capability.

RBS to increase lending to sustainable energy sector following £1.1bn securitisation of loans to UK sustainable energy market

RBS has executed a £1.1bn securitisation deal with Macquarie Infrastructure Debt Investment Solutions (MIDIS), which will allow the bank to recycle capital and increase lending to the sustainable or renewable energy sectors.

RBS launches £1 billion Female Entrepreneurship Funding and announces targets to help create at least 50k new businesses by 2023

RBS has today announced a new £1 billion in funding through NatWest to support female entrepreneurs in the UK to scale and grow – the largest intervention by a UK lender focused specifically on female-led businesses.

Set Tab for lightbox