Read Larry Connors' blog – Short Term Trading Strategies
The study also found that recovery rates on preferred shares varied considerably according to the nature of the initial impairment. As expected, the highest recoveries (35.9%) were observed for dividend omissions that were not followed by a subsequent broad bond default, while the lowest recoveries (15.9%) were realized for issuers whose preferred stock dividend impairment was part of an outright bond default.
Called "Preferred Stock Impairment and Recovery Rates, 1983-2008," the study is a comprehensive assessment of defaults and recoveries among preferred and trust preferred stocks since 1983. Through an analysis of 471 impairments, the study illustrates the relationship between initial impairment events and their impact on recovery rates. The study also examines the migration of issuers' ratings prior to dividend impairments.
"This study bridges a significant information gap on default and recovery performance for preferred and trust preferred stocks (TruPS)," said Dr. Ozgur Kan, Engagement Manager, Risk Management Services, who authored the study along with Praveen Varma, Global Managing Director, Risk Management Services. "This information can be used to enhance the market-based recovery assumptions made in estimating loss given default on preferred stocks and in valuing TruPS CDOs, which are held by many small and medium financial institutions as part of their Tier 1 capital."
The study is available at www.moodys.com/rms.
About Moody's Analytics
Moody's Analytics is a leading provider of research, data, analytic tools and related services to debt capital markets and credit risk management professionals worldwide. The company's products and services provide the means to assess and manage the credit risk of individual exposures as well as portfolios; price and value holdings of debt instruments; analyze macroeconomic trends; and enhance customers' risk management skills and practices. Moody's Analytics is a subsidiary of Moody's Corporation (NYSE: MCO), which reported revenue of $1.8 billion in 2008, employs approximately 4,000 people worldwide and maintains a presence in 27 countries. Additional information about the company is available at www.moodys.com.
SOURCE: Moody's Analytics
Moody's Corporation Michael Adler, 212-553-4667 VP, Corporate Communications michael.adler@moodys.com
More News:
Market Updates |
Stock Alerts |
All Trading News |
Stock Index
About TradingMarkets | Contact | Advertise | Careers | Link to Us | Site Map | Help | Terms & Conditions | Privacy Policy | Return Policy | Testimonials | Feedback
The Connors Group, Inc. ("Company") is not an investment advisory service, nor a registered investment advisor or broker-dealer and does not purport to tell or suggest which securities or currencies customers should buy or sell for themselves. The analysts and employees or affiliates of Company may hold positions in the stocks, currencies or industries discussed here. You understand and acknowledge that there is a very high degree of risk involved in trading securities and/or currencies. The Company, the authors, the publisher, and all affiliates of Company assume no responsibility or liability for your trading and investment results. Factual statements on the Company's website, or in its publications, are made as of the date stated and are subject to change without notice.
It should not be assumed that the methods, techniques, or indicators presented in these products will be profitable or that they will not result in losses. Past results of any individual trader or trading system published by Company are not indicative of future returns by that trader or system, and are not indicative of future returns which be realized by you. In addition, the indicators, strategies, columns, articles and all other features of Company's products (collectively, the "Information") are provided for informational and educational purposes only and should not be construed as investment advice. Examples presented on Company's website are for educational purposes only. Such set-ups are not solicitations of any order to buy or sell. Accordingly, you should not rely solely on the Information in making any investment. Rather, you should use the Information only as a starting point for doing additional independent research in order to allow you to form your own opinion regarding investments. You should always check with your licensed financial advisor and tax advisor to determine the suitability of any investment.
HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN INHERENT LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING AND MAY NOT BE IMPACTED BY BROKERAGE AND OTHER SLIPPAGE FEES. ALSO, SINCE THE TRADES HAVE NOT ACTUALLY BEEN EXECUTED, THE RESULTS MAY HAVE UNDER- OR OVER-COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN.
The Connors Group, Inc.
10 Exchange Place, Suite 1800
Jersey City, NJ 07302
© Copyright 2009 The Connors Group, Inc.
