RBOHA - Rabobank Prefernce Shares

[modandm]

why would nan need the principal? Ultimatly nan needs contiunous income over a period of until death. Perpetuals provide that. Other assets in the portfolio can be sold or other parts of her portfolio can be used to fund large costs that can't be borne by income (medical bills, new car etc).

If I was nan I would hope the perpetuals never are called. Very hassle free.

[Penfold]

The bigger problem for Nan might be the sub-ordination of these instruments.... Worth adding they are still highly rated. And if Rabo collapses the world has a big problem.

And there's also this "From 8 October 2017 the rate will be reset quarterly at the same margin over the 90 day bank bill rate". If they don't call them for some reason, you are going to take a big capital hit, and reduced interest.

This non-vanilla stuff is best left to investors rather than nans... and after looking at these last year, I am not convinced the interest and likely call in 2017, are compensation enough for the risk they may not call them.

[Xerof]

Yup, "Nan's" investment from a mere two or three weeks ago has lost 5 cents of its capital value - 85.5 to 80.5 - thats more than she is going to earn over the next year in interest, before she pays any tax, so lets say she'd break even in two years after tax

lookin' good?