I just call it as I see it BB, never been known for my political correctness and probably never will be. A question you might want to ask yourself after reviewing the SP graph's of the major Australian banks, is why has the ANZ been smacked down a lot harder than the rest of them ? Percy reckons they have the biggest exposure to the Dairy industry and from what I've read elsewhere this seems to be right, (sorry haven't got time to post supportive links but surely you can do some background reading ?) I have seen first hand the carnage these sort of unsecured deeply subordinated instruments have inflicted upon investors first hand during the GFC, that's why I find the terms of them so abhorrent. The other thing is that in a recent article on interest.co.nz the comment was made that about 90% of investors don't understand the implications of the Reserve Bank's open bank resolution and its implications for investors in banks. Sorry but I felt it was worth some more airing on here to help others understand the risks...I am sure not everyone is such a well informed investor as you or I. The risk of loss is small as is the chance of the ANZ invoking any of their "escape clauses" so eloquently written into the fine print of this instrument but in the context of what is starting to look like a pretty serious correction in international banking stocks I thought this was worth some more bandwidth.
I am sure many will be very happy to receive their 7.2% coupon. The odds are they will continue to receive same and all will be well. As Winner suggested earlier, if the ANZ have to invoke some of their clauses or RBNZ invoke the provisions of the open banking resolution there will be so many other problems going on nobody will even notice $500m being compromised so I shall crawl back into my kennel and wonder why I bothered barking in the first place.
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