For some 'time can be placed directly held without bond passed by the bank, this is good because you avoid the costs of collection, but it is said that the bond is a bargain (the issuer always convenient to offer a lower rate than the market), the Board is to compare performance with similar titles already listed on the market.
In this regard, "The Royal Bank of Scotland Group PLC share an avalanche of debt (because the bank is much indebted), in Italy use this system of direct collection by conveying to investors the placement with effective advertising.
For several days this station is placing among others, the following obligation: "RBS 2021 Inflation," this is a ten-year bond, whose first three are fixed coupon of 6%, the remaining 7 are linked to inflation Euro + 1.50%, so assuming, by contradiction, inflation steady at 2.4%, to 100 when you buy the actual net yield to maturity is 4.05%, as you can see that obligation apparently offers an attractive return, compare it with a similar.
Last year this channel had always placed a decade with a similar logic: the first three years fixed rate coupon of 5.50%, the remaining seven, inflation-linked euro + 1.60%, figuring to buy bond to 95 and the inflation scenario described above, the effective yield is 4.46%.
The first bond is more risky because it is the longest maturity of one year, or for another reason (the subject of next post), so you should make more than 4.46%.
As can be seen not only need to be mindful of the bonds placed at the counter, but also need to think in the case of private placement.
The post has educational value and does not constitute solicitation.
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