Читать книгу The Sterling Bonds and Fixed Income Handbook - Mark Glowrey - Страница 51

Next we have high-quality, non-governmental debt. In the past, the highest scorers have often been the banks, some (but not all) of which have credit quality to rival that of a government. However, this situation has been affected by the events post-2008, and bank bonds now often trade on higher yields than corporates. Current moves from Brussels to effectively subordinate bank senior debt to deposits may see this prove to be a permanent development.

The seniority of the issue is of particular importance in bonds issued by banks. Bank debt is usually ranked as follows:

 Senior Debt: after secured bonds, this is the best.

 Lower Tier 2: the bank does not have the right to defer the coupon. The next best after senior debt.

 Upper Tier 2: coupon deferral possible in certain circumstances, but coupons are cumulative (i.e the payments missed will be rolled up and paid when the bank returns to a more favourable situation).

 Tier 1: coupon deferral in certain circumstances, non cumulative.

 Preference Share: generally coupon payment can be waived, generally non-cumulative.