Analyst: Banks' subordinated bonds will get boost from Basel proposal

04/21/2010 | Bloomberg Businessweek

Hank Calenti, an analyst at Royal Bank of Canada, said a proposal to phase out banks' subordinated securities likely will push up the bonds as they become more scarce and issuers repurchase them. "These securities will become less useful from a capital perspective and they're expensive, so banks will have an incentive to call them back," Calenti said. "That and scarcity should push spreads tighter."

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