Descending to greater heights

With many credits offering disappointing returns, subordinated bank debt is revelling in a surge in demand from yield-hungry investors. But some managers have resisted the temptations of tier one debt, cautioning against its risk and return. Hardeep Dhillon reports

grainger-gif
The banking sector has long been viewed as a safe haven in the face of turbulent market conditions. So it is not beyond the realms of reason that, in the search for higher yielding paper, investors’ attention has turned to subordinated bank debt. Investor appetite has meant the sector has seen significant growth in recent years and European new issuance totalled some e40 billion in 2001.

With the added attraction of relative value in bank capital securities vis-à-vis senior unsecured debt

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe

You are currently unable to copy this content. Please contact info@risk.net to find out more.

Sorry, our subscription options are not loading right now

Please try again later. Get in touch with our customer services team if this issue persists.

New to Risk.net? View our subscription options

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here