Archive for January, 2011
Financial Reform: Game Changer for Trust Preferreds
The Dodd-Frank Wall Street Reform Act calls for the phase-out of trust preferred securities as part of bank regulatory capital. This legislation provides banks with an economic incentive to redeem these securities at the end of the phase-out period in 2016. As a result, we believe trust preferred securities, which have an average yield of over 7 percent, will outperform other fixed income alternatives over the next 5 years.