The Great RMBS Short

Christopher Joye

One of our best “short” (as opposed to “long”) ideas this year has been to bet that the credit spreads on residential mortgage-backed securities (RMBS) would widen—reducing their price—as a function of the toxic combination of falling house prices, rising defaults, surging supply and plummeting home loan prepayment rates. (We... Show More

Banks avoid senior bail-in

Christopher Joye

APRA has released an important new consultation paper on the regulator's approach to ensuring the major banks have sufficient "Total Loss Absorbing Capacity" (or TLAC). I have written at length about this in the AFR here (or AFR subs can click here). Show More

CBA hybrid looks cheap

Christopher Joye

Today I write that it's not often you come across a major bank hybrid that is genuinely cheap, which CBA’s new Perls XI preferred equity security (ASX: CBAPH) undeniably is given an expected maturity (or “call” date) of 5.36 years (click on that link to read the full column or... Show More

Valuing NABHA

Christopher Joye

I've written a column summarising our valuation views on NABHA, which are excerpted below (click on that link to read the full column or AFR subs can click here). We look at scenarios where NABHA remains perpetual and others where it is called with both converging around the $85 mark.... Show More