I was surprised to read Chris Lee speculating that IFT should consider re-structuring the terms of the interest re-set on these securities to show leadership amongst the issuers of indexed securities (banks, Origin). Issuers of these securities have incidentally benefited from an unforeseen change in dynamic between interest rates on wholesale and retail funding rates due to Basel requirements. As I read it, he suggested that retaining adherence to the current formula was inappropriate, unethical and exploitative, given that it now results in subordinated debt being rolled over at interest rates below those of current higher-ranking issues.

It will be interesting to find out if that comment was based solely on wishful thinking.