Now you PRDC them...


In simple terms, power-reverse dual-currency (PRDC) notes constitute a carry trade in which investors receive coupons based on foreign currency interest rates on a yen-denominated principal amount. As the yen remained weak relative to the dollar, dealers generated a huge amount of PRDC business, making giant profits from issuing and hedging the products for Japanese clients and counterparties. But as with the legendary wooden horse, these books later expelled a horde of troublesome Greeks.


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