Most investors buy plain-vanilla bonds, and often the biggest wrinkle is that they are callable.
The senior preferred shares will be callable at par after three years, under the Treasury program.
UBS, says that three-year callable step-up bonds and capital-protected equity funds are currently in vogue.
The dominance of callable capital in the other MDBs' proposals also reflects the unfriendly climate for fund-raising.
Given the high price and lower yield, many of these bonds are becoming callable at prices below their current levels.
Second, the corporate yields more because (in most cases) it is callable, while a Treasury (in most cases) is not.
Buy the B-rated Hertz Corp. 7.50% Bonds Due Oct. 15, 2018 (Cusip: 428040CD9) Callable Oct. 15, 2014 at 103.75 .
On the plus side, however, callable bonds are in some ways among the safest assets by virtue of being in limbo.
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With Buffett involved now, Media General may be able to refinance debt callable on February 14, 2014 with a 11.75% yield.
One, the yield to the worst call date is much better than yield to maturity of a non-callable bond (aka, bullet bond).
Like bonds, preferred stocks are often callable after a certain date.
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Are there any other callable bonds whose businesses are cruising along?
The Laffer Shares would not be callable, although the federal government could, of course, go into the market and buy them back at any time, at market prices.
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The dividends on both new kinds of shares would be paid in perpetuity, and the securities would be non-callable (although the government could, of course, always go into the open market and buy them back).
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While President Clinton apparently blithely provided such guarantees to Belarus when it recently gave up former Soviet nuclear arms on its territory, he must be wary of assuming new, and arguably more callable, guarantees to states like Ukraine without taking the minimum steps necessary to preserve the U.S. nuclear deterrent.
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