Beware of Muni Callable Bond Extension Risk, CreditSights Says
Alert: HALISTER1
Source: BFW (Bloomberg First Word)
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Patrick Luby (Creditsights Inc)
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UUID: 7947283
(Bloomberg) -- With potential Fed Dec. rate hike and recent drift toward higher yields, investors should evaluate any holdings with coupons below 4.5 percent and priced to a short call for their extension risk, says CreditSights head of municipal research, Patrick Luby.
- Bonds with 5 percent coupons priced to a short call should not have to worry about extension risk for the near future
- Bonds with 3 or 4 percent coupons should be evaluated for the risk of a decline to a discount price, and what impact their new, higher duration would have on a portfolio
Alert: HALISTER1
Source: BFW (Bloomberg First Word)
People
Patrick Luby (Creditsights Inc)
To de-activate this alert, click here
To modify this alert, click here
UUID: 7947283