The end of the road for major bank hybrids is near. We know this because every fixed income fund manager is marketing as hard as they can to win some of the $30 billion of retail and high net worth money that will need a new home once their securities are retired, as per the regulator’s orders.
But a controversial trade is being pitched by brokers and fund managers which is creating a fair amount of angst in the listed fixed income market: that is to sell out of hybrids at a profit and dodge a potential risk that the major banks surprise with an early buyback.
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