Floating interest – Bobs Birdhouse http://bobsbirdhouse.com/ Sun, 26 Sep 2021 01:57:17 +0000 en-US hourly 1 https://wordpress.org/?v=5.8 https://bobsbirdhouse.com/wp-content/uploads/2021/06/cropped-icon-32x32.png Floating interest – Bobs Birdhouse http://bobsbirdhouse.com/ 32 32 T-Bills at Risk as Fed Paves the Way for Yield Breakdown https://bobsbirdhouse.com/t-bills-at-risk-as-fed-paves-the-way-for-yield-breakdown/ https://bobsbirdhouse.com/t-bills-at-risk-as-fed-paves-the-way-for-yield-breakdown/#respond Sat, 25 Sep 2021 21:01:57 +0000 https://bobsbirdhouse.com/t-bills-at-risk-as-fed-paves-the-way-for-yield-breakdown/ (Bloomberg) – Traffic on the way to higher Treasury yields finally appears to be clearing up as central banks move closer to ending emergency pandemic policies. After being stuck for months, 10-year Treasury yields crossed the top of a range held since mid-July, topping 1.40% and ending the week at 1.45%. That’s up from the […]]]>

(Bloomberg) – Traffic on the way to higher Treasury yields finally appears to be clearing up as central banks move closer to ending emergency pandemic policies.

After being stuck for months, 10-year Treasury yields crossed the top of a range held since mid-July, topping 1.40% and ending the week at 1.45%. That’s up from the 2021 low of 1.13% set in August.

The bears have emboldened, prompting a new round of short selling, betting that US debt will continue to fall – pushing up yields further. Gaining a lasting victory on this trade will not be easy. The massive jump in yields in the first quarter ran out of steam as the Covid resurgence clouded the outlook for economic growth.

But, for now, a hawkish trend from the Federal Reserve and the Bank of England has paved the way for a further rise in yields.

“Nominal yields are still too low and will increase,” said Gary Pollack, head of fixed income for private wealth management at Deutsche Bank. “But there is an ongoing struggle in the rate market between the fundamentals – which on inflation look positive and support higher yields – and the demand flow techniques of the Fed and foreign buyers. But I think so. that fundamentals will win out eventually and that returns will slowly rise. ”

Fed Chairman Jerome Powell said this week that the central bank could begin in November to cut back on asset purchases that have helped the US economy overcome Covid-19. The exit of such a large bond buyer could allow yields to jump higher.

Officials also updated their forecast (aka the dot plot) for the Fed’s benchmark rate, showing half of them would see an increase by the end of 2022, a more hawkish projection than most. strategists had not foreseen it.

Traders will have a feel for the feasibility in early October when the next monthly jobs report is released.

The bulls heal the losses. U.S. Treasuries are down about 1.8% year-to-date, while global sovereign bonds are down more than 4%, according to Bloomberg indices.

Powell tries to separate rate cut and hike decisions from each other, but appears to be fighting a losing battle. The dot plot updated this week, along with the provisional reduction schedule, prompted derivatives traders to advance their target for the first rise: December 2022 compared to early 2023.

The Bank of England is also fueling higher yields. He spoke of the prospect of an interest rate hike as early as November, causing yields on UK gilts and German Bunds to rise.

Meanwhile, Norway has achieved the first post-pandemic rise among the Group of 10 countries.

“The wave of liquidity from global central banks is only running out of steam,” said Gene Tannuzzo, portfolio manager at Columbia Threadneedle. “There is a mix of central banks moving from an economic tailwind to at least neutral and maybe for the foreseeable future a headwind. There is now a floor below 10-year Treasury yields, with your short-term bogey now probably slipping to around 1.5% to 1.6%. “

The 10-year reached 1.77% in March.

Tannuzzo has a defensive position in long-term Treasuries. It favors variable-rate loans from banks and debts from high-yield corporate issuers which have the prospect of regaining a quality rating.

Momentum indicators, for their part, are supporting higher yields, after 10-year rates significantly exceeded their 50-day moving average, which stood at 1.29% on Friday.

Investors are watching China’s Evergrande debt crisis. And China’s recent regulatory moves, including a ban on crypto transactions, appear to be hurting growth.

“There is a short-term dynamic for yields to continue to rise,” said Tracy Chen, portfolio manager at Brandywine Global Investment Management. “But we are very cautious about global growth because what China is doing is quite devastating as it is tightening on almost all fronts. We believe Chinese growth will continue to slow.

What to watch:

  • Economic calendar:
    • September 27: durable goods orders; Dallas Fed Manufacturing Activity
    • September 28: Anticipated merchandise trade balance; wholesale and retail stocks; FHFA house price index; S&P CoreLogic house price data; Conference Board Consumer Confidence; Richmond Fed manufacturing index
    • Sep 29: MBA mortgage applications; pending house sale
    • September 30: first applications for unemployment benefits; GDP; Basic PCE; Langer consumer comfort; IMN Chicago PMI
    • October 1: personal income and expenses; PCE deflator; Markit US Manufacturer PMI; consumer sentiment from the University of Michigan; construction expenses; ISM Manufacturing
  • Fed Calendar:
    • September 27: Charles Evans of the Chicago Fed; John Williams of the New York Fed; Governor Lael Brainard
    • September 28: Evans; Fed Chairman Powell appears with Treasury Secretary Janet Yellen, his predecessor, before the Senate Banking Committee; Governor Michelle Bowman; Raphael Bostic of the Atlanta Fed; James Bullard of the Saint-Louis Fed
    • September 29: Patrick Harker of the Philadelphia Fed; Powell; Bostique
    • September 30: House panel on the Fed and Treasury response to the pandemic; Williams; Bostique; Evans; Bullard; Harker
    • October 1: Harker; Loretta Mester of the Cleveland Fed
  • Auction calendar:
    • Sep 27: invoices at 13 and 26 weeks; tickets at 2 and 5 years old
    • Sep 28: tickets for 7 years
    • Sep 30: 4 and 8 week invoices

© 2021 Bloomberg LP


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How to take advantage of lower mortgage rates https://bobsbirdhouse.com/how-to-take-advantage-of-lower-mortgage-rates/ https://bobsbirdhouse.com/how-to-take-advantage-of-lower-mortgage-rates/#respond Sat, 25 Sep 2021 07:00:12 +0000 https://bobsbirdhouse.com/how-to-take-advantage-of-lower-mortgage-rates/ Banks are competing fiercely to win over customers by cutting interest rates, anticipating increased demand in the real estate market over the coming holiday season. Big banks such as State Bank of India (SBI), Kotak Mahindra Bank, Bank of Baroda, HDFC Bank, among others, have cut mortgage rates. But how can you take advantage of […]]]>

Banks are competing fiercely to win over customers by cutting interest rates, anticipating increased demand in the real estate market over the coming holiday season. Big banks such as State Bank of India (SBI), Kotak Mahindra Bank, Bank of Baroda, HDFC Bank, among others, have cut mortgage rates.

But how can you take advantage of the drop in interest rates? More importantly, is it really worth it?

Experts suggest that it is not always what it seems when it comes to loans. It is best for borrowers to contact their lenders and discuss their eligibility and other conditions attached before switching to a lower interest rate.

It is necessary to understand that more than often, lower rates would only occur if borrowers meet several other criteria as well.

For example, an employee would always get loans at lower rates than a self-employed person. Here, an individual’s CIBIL score plays a key role here, as banks judge a borrower’s ability to pay debt on this basis.
Ratan Chaudhary – Head of Home Loans at Paisabazaar.com said CNBC-TV18 that another way for an existing borrower to switch to a lower interest rate plan is to opt for a loan balance transfer.

That said, however, borrowers should also take into account the additional costs to be incurred in the balance transfer process, Chaudhary added.

“The new lender will treat the balance transfer as a new loan and, therefore, charge a processing fee, administrative fee, etc. when processing the request. Therefore, borrowers should only benefit from balance transfer if it achieves significant savings on interest charges after taking into account the fees and effort involved.. “

In addition, a borrower should not ignore the fact that there can be multiple reversals of the interest rate regime during the life of the loan, especially in the case of home loans and other expensive long-term loans.

Therefore, potential borrowers should refrain from making borrowing decisions solely on the basis of the prevailing interest rate regime, especially for those considering resorting to variable rate loans, Chaudhary warned.

“Instead, loan seekers should broaden their search for loans and go for the best deal available on their credit profiles. They can prepay loans in the future anyway to lower their interest cost. global, ”he said.

Meanwhile, the country’s largest lender, the State Bank of India (SBI) has launched a bunch of offers for potential home loan clients. On the other hand, Kotak Mahindra Bank reduced the mortgage interest rate from 0.15% to 6.50%.

PNB has reduced the interest rate on home loans above Rs 50 lakh from 0.50% to 6.60%. Bank of Baroda offers a 0.25% exemption on existing applicable rates for home loans.

The opinions and investment advice expressed by the investment experts on CNBCTV18.com are theirs and not those of the website or its management. CNBCTV18.com advises users to consult with certified experts before making any investment decisions.

(Edited by : Ajay Vaishnav)


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Form FWP MORGAN STANLEY Submitted by: MORGAN STANLEY https://bobsbirdhouse.com/form-fwp-morgan-stanley-submitted-by-morgan-stanley/ https://bobsbirdhouse.com/form-fwp-morgan-stanley-submitted-by-morgan-stanley/#respond Fri, 24 Sep 2021 19:58:00 +0000 https://bobsbirdhouse.com/form-fwp-morgan-stanley-submitted-by-morgan-stanley/ Quota Securities redeemable automatically on income maturing on October 5, 2023 All Payments on Securities Based on Worst Performing NASDAQ-100 Index®, the S&P 500® Index and the Russell 2000® Index Fully and unconditionally guaranteed by Morgan Stanley Risk capital securities The securities offered are unsecured obligations of Morgan Stanley Finance LLC (“MSFL”) and are fully […]]]>

Quota Securities redeemable automatically on income maturing on October 5, 2023

All Payments on Securities Based on Worst Performing NASDAQ-100 Index®, the S&P 500® Index and the Russell 2000® Index

Fully and unconditionally guaranteed by Morgan Stanley

Risk capital securities

The securities offered are unsecured obligations of Morgan Stanley Finance LLC (“MSFL”) and are fully and unconditionally guaranteed by Morgan Stanley. The titles have the terms described in the Product Supplement, Index Supplement and the accompanying prospectus, as supplemented or modified by this document. The securities do not guarantee repayment of principal and do not provide for the regular payment of interest. Instead, the securities will pay a conditional quarterly coupon but only if the closing value of the index of each of the NASDAQ-100 index®, the S&P 500® Index and the Russell 2000® Index is at or above 75% of its respective initial index value, which we call the respective value coupon threshold level, on the corresponding observation date. However, if the closing index value of all the underlying index is less than his coupon threshold level on any observation date, we will pay no interest for the relevant quarterly period. In addition, the securities will be automatically redeemed if the closing value of the index of each the underlying index is Greater or equal to his respective initial index value on any quarterly repayment determination date, for the prepayment payment equal to the sum of the principal amount indicated more the corresponding conditional quarterly coupon. No further payment will be made on the securities once they have been redeemed. At maturity If the securities have not been redeemed beforehand and the final index value of each underlying index is Greater or equal to 75% of its respective Initial Index Value, which we refer to as the respective Fall Threshold Level, the Maturity Payment will be the Principal Amount declared and the corresponding Quarterly Coupon, if any. If, however, the final index value of all the underlying index is less than its respective downside, investors will be fully exposed to the downside of the worst performing Underlying Index on a 1 to 1 basis and will receive a payment at maturity that is less than 75% of the stated capital of the securities and could be zero. Therefore, IInvestors in the Securities should be prepared to accept the risk of losing their entire initial investment as well as the risk of not receiving conditional quarterly coupons during the 2 year term of the Securities. Since all payments on the securities are based on the worst performing Underlying Indices, a decline beyond the respective Coupon Threshold Level or the respective Fall Threshold Level, as applicable, of any index below. the underlying will result in little or no conditional coupon payments or a loss to your investment, even if one or both of the other underlying indices have appreciated or have not fallen as much. The securities are intended for investors who are prepared to risk their capital on the basis of the worst performing of three underlying indices and who are looking for an opportunity to earn interest at a rate potentially above the market in exchange for the risk of receiving no coupon. quarterly over the entire 2-year term. Investors will not participate in any appreciation of an Underlying Index. The Securities are notes issued under the MSFL Series A Global Medium Term Note program.

All payments are subject to our credit risk. If we default on our obligations, you could lose all or part of your investment. These securities are not covered obligations and you will not have any security in, or otherwise have access to, any underlying asset or reference asset.

SUMMARY TERMS

Transmitter :

Morgan Stanley Finance LLC

Guarantor:

Morgan stanley

Underlying indices:

NASDAQ-100 Index® (the “NDX Index”), S&P 500® Index (the “SPX Index”) and Russel 2000® Index (the “RTY Index”)

Total amount of capital:

$

Principal amount indicated:

$ 1,000 per title

Issue price:

$ 1,000 per security (see “Commissions and issue price” below)

Pricing date:

October 1, 2021

Original issue date:

October 6, 2021 (3 working days after the pricing date)

Due date:

October 5, 2023

Conditional Quarterly Coupon:

A quota the coupon will be paid on the securities on each coupon payment date but only if the closing value of the index of each the underlying index is equal to or greater than its respective level coupon threshold level on the corresponding observation date. If payable, the Quarterly Coupon, if any, will be a cash amount per principal amount shown corresponding to a yield of 8.05%. per year (corresponding to approximately $ 20,125 per quarter per security) for each interest payment period for each applicable observation date.

If, on an Observation Date, the Closing Index Value of an Underlying Index is below its respective Coupon Threshold, we will not pay any Coupons for the applicable Quarterly Period. It is possible that an Underlying Index will remain below its respective Coupon Threshold level for long periods of time or even for the entire 2-year term of the securities, so that you will receive little or no Contingent Quarterly Coupons. .

Payment at maturity:

If the securities have not been automatically redeemed before maturity, payment at maturity will be determined as follows:

If the final value of the index of each the underlying index is Greater or equal to its respective lowering threshold, investors will receive the principal amount indicated more the conditional quarterly coupon with respect to the final observation date.

If the final value of the index of all the underlying index is less than its respective downside, investors will receive (i) the principal amount indicated multiplied by (ii) the performance factor of the worst performing underlying index. In these circumstances, the Maturity Payment will be less than 75% of the stated principal amount of the Securities and could be nil.

Conditions continued on next page

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Estimated value on the date of the prize:

About $ 964.70 per title, or less than $ 35 of that estimate. See “Summary of Investments” starting on page 3.

Commissions and issue price:

Public Prize

Agent’s commissions

Comes back to us(3)

By title

$ 1,000

$ 15(1)

$ 5(2)

$ 980

Total

$

$

$

(1)Selected brokers, including Morgan Stanley Wealth Management (a subsidiary of the Agent), and their financial advisors will collectively receive from the Agent, MS & Co., a fixed sales commission of $ 15 for each security they sell. . See “Additional Information Regarding the Distribution Plan; conflicts of interest. ”For more information, see“ Distribution Plan (Conflicts of Interest) ”in the accompanying Product Supplement for Automatically Redeemable Securities.

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The Securities and Exchange Commission and state securities regulators have not approved or disapproved of these securities, nor have they determined whether this document or the accompanying product supplement, index supplement and prospectus are true or complete. Any statement to the contrary is a criminal offense.

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Product supplement for automatically redeemable securities dated November 16 2020 Index supplement dated November 16 2020 Flyer of November 16 2020


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Exchange rate: As Emefiele prepares to recover currency with E-Naira, experts worry https://bobsbirdhouse.com/exchange-rate-as-emefiele-prepares-to-recover-currency-with-e-naira-experts-worry/ https://bobsbirdhouse.com/exchange-rate-as-emefiele-prepares-to-recover-currency-with-e-naira-experts-worry/#respond Fri, 24 Sep 2021 05:19:02 +0000 https://bobsbirdhouse.com/exchange-rate-as-emefiele-prepares-to-recover-currency-with-e-naira-experts-worry/ For about 7 years, Central Bank Governor Godwin Emefiele struggled to stop the free fall of the Naira, which continues to struggle with the world’s major currencies. Emefiele’s interventionist approach failed to boost the Naira which experienced an unprecedented N165 shantytown to the dollar he inherited in 2014 when he was appointed by former president […]]]>

For about 7 years, Central Bank Governor Godwin Emefiele struggled to stop the free fall of the Naira, which continues to struggle with the world’s major currencies.

Emefiele’s interventionist approach failed to boost the Naira which experienced an unprecedented N165 shantytown to the dollar he inherited in 2014 when he was appointed by former president Goodluck Jonathan to this which it is currently trading on the parallel market. .

To defend the Naira, Mr. Emefiele adopted a number of intervention policies that many economists saw as falling outside the monetary policy mandate of a central bank.

Policies such as the Key Borrower Program, the Strategic Maize Reserve, the Agribusiness / Small and Medium Enterprise Investment Program, and the Targeted Credit Facility, all aimed at boosting local production to reduce the imports.

In March, the CBN also introduced the CBN Naira for the Dollar to encourage Nigerians in the diaspora to send money via licensed international money transfer. The policy is to donate N5 for every dollar received by IMTO.

Amid the pandemic, Mr Emefile wrote an editorial on what the country needs to do to mitigate the impact of the lockdown due to the pandemic. In the editorial, the governor of the CBN called for more intervention to increase local production.

“For a country of 200 million people… we can no longer continue to ignore repeated warnings of the dangers that lie ahead if we don’t start to depend heavily on what we produce locally…” said Emefiele.

For observers, this line of argument is consistent with the direction of the CBN under Emefiele, which seeks to lower imports to reduce pressure on the foreign reserve and by extension the Naira.

Mr. Emefiele supported the border closure to protect the CBN’s key borrower program, targeting sufficiency in rice production. This policy appears to be in line with President Muhammadu Buhari, who re-appointed Mr. Emefiele for a second term in 2019.

In the editorial quoted above, Governor Emefiele did not disavow the label of protectionism, rather he justified the label as follows.

“The Bank has repeatedly been accused of promoting protectionist policies. My response has always been that leaders are first and foremost accountable to their own citizens. “

At the time of writing, the Naira is trading at N570 to the dollar on the black market.

Recently, Mr. Emefiele took a more direct approach to saving the Naira, including a new approach on Bureau De Change agents and the fight with Abokifx.

In this article, DAILY POST reviews the central bank’s monetary policy under Governor Emefiele and its corresponding impact on the naira and the economy.

Prohibition of cryptocurrency

On February 5, the Central Bank of Nigeria issued a circular banning commercial banks from dealing with entities trading cryptocurrencies. The policy sparked an uproar.

The CBN said the opacity of cryptocurrency has become well suited to the conduct of many illegal activities, including money laundering, terrorist financing, and the purchase of small arms.

Even though the CBN issued the circular to banks, it did not necessarily declare it illegal, through peer to peer platforms, Nigerians continue to trade in cryptocurrency, which allows Nigerians to buy bitcoins. and others directly to those who wish to sell. The use of Whatsapp is also popular among traders of these crypto coins.

Paxful, a crypto trading platform has 1.5 million subscribers in Nigeria, out of a total of N7 million users worldwide.

Electronic money

The latest CBN policy is the planned introduction of digital currency, a digital form of fiat currency that will launch on October 1 to coincide with the Independence Day celebration.

CBN digital currency is different from cryptocurrency, as the latter more or less resembles fiat money issued by the Central Bank and will be pegged to the Naira. This is totally against the principle of crypto, which is not regulated by any authority,

An economist, Wasiu Adekunle, research analyst at the Nigeria Economic Summit Group (NESG) told DAILY POST that CBN e-money is not an alternative to cryptocurrency, but rather a digital substitute for the Naira, which does will only help the cashless policy. of the government.

Insecurity worsens inflation in Nigeria – CBN boss Emefiele

He said that despite the Central Bank’s attempts to unify the market through the I&E window, the parallel market is a true reflection of the value of the Naira.

“The problem is not whether to defend the Naira or not. What we are supposed to do to stabilize the naira we are not doing. If you ask an economist what determines the exchange rate, these are inflation, the interest rate, and output (how much do you produce as a country?)

“If you take inflation, if inflation is 5% in the United States and inflation in Nigeria is 17% as it is. The relative purchasing power parity of the naira against the dollar will depreciate by 12%, the difference between the two inflation rates. This is if the exchange rate in Nigeria follows this relative purchasing power parity.

“How does it work? When inflation is high in Nigeria, it indicates our cost of production is high in Nigeria. People won’t want to buy from us, it’s called imported inflation.

Speaking on the call from some Nigerians that the CBN should float the Naira, he said almost all options have been tried out by Nigeria, rather than the country having adopted the managed float policy, to have the pegged and floating exchange rate policy existing side by side. .

“We have experimented with all the options, floating and stowed. We have experimented with peg, which is the fixed exchange rate, we have experimented with the float during SAP (Structural Adjustment Program), now we have managed the float exchange rate, which is a combination of the two.

“Official rate, remember, CBN stopped the fixed rate, moving to the NAFEX window, which is the I&E rate. We don’t have an official tariff, which is one of the ways Emefiele tries to unify the tariffs. There has been pressure from the IMF for Nigeria to unify rates, for multiple exchange rates to create problems.

“What Emefiele is trying to do by devaluing the naira 3 times in the past year and adopting NAFEX is to unify the rates in style. The parallel rate is the realistic rate. It is more about the rate. of an underground economy, determined by demand and supply.

Young Peoples Party presidential candidate in the 2019 election and former vice-governor of the Central Bank of Nigeria, Kingsley Moghalu recently criticized the CBN’s foreign exchange policy.

In a Twitter thread on Monday, Moghalu said the Naira will remain volatile as long as Nigeria depends on crude oil as its sole source of foreign exchange.

According to Moghalu, the Naira crisis will worsen due to growing debt, inflation and the activities of speculators, who will prey on weak currencies around the world.

As the country awaits the official launch of the e-naira, there are concerns that it may be part of the other round of attempts to save the Naira.


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The flight to quality continues as ILS managers are evaluated: Lohmann & Matter, Schroders https://bobsbirdhouse.com/the-flight-to-quality-continues-as-ils-managers-are-evaluated-lohmann-matter-schroders/ https://bobsbirdhouse.com/the-flight-to-quality-continues-as-ils-managers-are-evaluated-lohmann-matter-schroders/#respond Thu, 23 Sep 2021 14:32:59 +0000 https://bobsbirdhouse.com/the-flight-to-quality-continues-as-ils-managers-are-evaluated-lohmann-matter-schroders/ There is a clear and continuing “flight to quality” when it comes to ILS funds, according to Dirk Lohmann, President and Flavio Matter, Origination Manager, ILS, at Schroder Secquaero.Lohmann (law), co-founder of the ILS investment management unit, rose to the newly created position of Chairman in September 2020, paving the way for Stephan Ruoff, the […]]]>

There is a clear and continuing “flight to quality” when it comes to ILS funds, according to Dirk Lohmann, President and Flavio Matter, Origination Manager, ILS, at Schroder Secquaero.

Lohmann (law), co-founder of the ILS investment management unit, rose to the newly created position of Chairman in September 2020, paving the way for Stephan Ruoff, the former CEO of Tokio Millennium Re, to succeed him at the head. Matter has also been in his new role for a year.

Speaking to Artemis around the Monte Carlo virtual September Rendezvous, Matter said the losses – including very active storm seasons in 2017 and 2018 – gave investors the opportunity to assess the merits of different assessment approaches.

“No ILS fund manager likes to take losses on their funds,” he said. “However, while such events affecting investor performance are unfortunate, it is only after such events that investors will be able to verify the ability of their ILS manager to deliver on their promise.”

“We are seeing a flight to quality right now, as evidenced by several tenders in the market. We hear from many ILS investors who are dissatisfied, not necessarily with the performance of their investments, but more with the mismatch between promises, expectations and actual results. “

With Hurricane Ida claims set to reach as high as $ 35 billion in the Gulf states, Matter believed there was no doubt the event would impact prices on January 1 renewals.

flavio-matter-schroders-they“This will have a strong impact on re / insurers”, Matter (law) noted. “But it’s still high hurricane season and of course the prices will depend a lot on how the rest of the hurricane season unfolds, so at this point it’s hard to say what impact this event alone will have on the world. broad market. “

“What we have seen in the market is an increase in ILW activity, and after Ida we have received requests for short-term backup capacity,” he added. “But there has been a big difference in the price expectations there.”

For the continental European market, the double blow of flooding and COVID-related losses could together influence the direction of rates, Lohmann noted.

Market commentators have noted that the adequacy of property reinsurance rates is always more problematic in Europe.

“The COVID issue for harmless business disruptions was not really addressed during the January 1, 2021 renewals and it started to crystallize into actual losses. Some buyers will therefore suffer two losses, not just one. “

“This could give new impetus to tightening beyond the peak areas,” he added. “Overall there has been pretty strong erosion and the big problem for reinsurers and Lloyd’s syndicates is that 2021 is shaping up to be another disappointment when it comes to the property line.”

“This is something that is going to put pressure on underwriters and on management – shareholders, and also rating agencies – because they don’t seem able to turn the tide. Are there inadequate prices to catch up?

Collateralized paper versus rated paper

Matter said the value of collateral protection was always at higher peg levels where credit risk is, by definition, higher for traditional reinsurers.

“The majority of guaranteed capacity is still used in peak periods for the simple reason that the capacity supply in traditional markets is simply not sufficient to meet demand,” he added.

It is only a matter of time before demand grows in Asia-Pacific, given its high exposure to natural disaster risk and rapid growth in insurance penetration, according to Matter.

Singapore and Hong Kong’s ambitions to develop as ILS hubs will contribute to market growth in this region.

“We think many ILS fund managers would be very keen to expand their footprint in these diversifying risk regions, but it’s quite difficult right now for a number of reasons,” he said. “Currently, cedants do not need to seek alternative capital because there is sufficient supply in traditional markets. “

“But when you look at the rapid pace that some of the biggest carriers in the APAC region are growing their books exposed to cats, it’s pretty obvious that it’s only a matter of time for guaranteed capacity to be more widely accepted and used. “

Lohmann is currently seeing greater investor interest in collateralised strategies. “They are either existing investors looking to add managers or they are new to the market and have a better understanding.”

“People now have many years of loss activity to start comparing individual managers to see how they fare with these types of losses. “

“The key investment value proposition that has always been there for ILS remains true, which is that it has a very low correlation with other financial assets,” he continued. “It offers a positive absolute return and it is a variable rate instrument. We are seeing some of the institutional markets bidding to see if they can add to the asset class.

He believed the impact of losses so far in 2021, including Uri in Texas, Bernd in Germany, Hurricane Ida, and wildfire losses in North America and Europe, will further erode appetite. for global protections, which have become a bit of a “bug-bear”. For investors.

“They find that the performance of their investment is driven by things they didn’t really anticipate and ask if we were compensated for these additional risks, compared to the peak risks they thought they were adhering to,” Lohmann said. .

Even on the side of the cat bond, which traditionally focuses more on peak risks, some structures have felt the attritional impact of “secondary losses”.

“If you look at the underperforming bonds this year, there are a number of them that are aggregate multi-risk hedges and there has been quite a bit of market deterioration and correction on those,” Lohmann said. .

“For a couple, there have been a couple of years in a row now, they’ve suffered losses and that’s going to have an impact as well. In general, market demand for bonds remains quite robust, but these specific types of bonds are going to be more difficult in the future. “

He noted that there had been a number of new sponsors, including insurance companies, so far in 2021.

“We’ve even seen regional carriers come into capital markets and sponsor bonds. This is a good sign that they value the protection guaranteed, whether private or in a 144a form for very extreme exposures, where if ever they are tied up it is a situation that could represent real market stress. for the entire sector.

Find all of our interviews with professionals from the ILS market and the reinsurance sector here.

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Completion of the world’s largest floating wind farm, Statkaft takes power https://bobsbirdhouse.com/completion-of-the-worlds-largest-floating-wind-farm-statkaft-takes-power/ https://bobsbirdhouse.com/completion-of-the-worlds-largest-floating-wind-farm-statkaft-takes-power/#respond Wed, 22 Sep 2021 22:27:59 +0000 https://bobsbirdhouse.com/completion-of-the-worlds-largest-floating-wind-farm-statkaft-takes-power/ Statkraft has started taking power from Kincardine, the largest floating offshore wind farm in operation to date (Statcraft) Posted on Sep 22, 2021 6:27 PM by The maritime executive The installation of the wind turbines at Kincardine in Scotland, which has been called the world’s largest floating wind farm, was recently completed. With the completion […]]]>

Statkraft has started taking power from Kincardine, the largest floating offshore wind farm in operation to date (Statcraft)

Posted on Sep 22, 2021 6:27 PM by

The maritime executive

The installation of the wind turbines at Kincardine in Scotland, which has been called the world’s largest floating wind farm, was recently completed. With the completion of the project, which is designed to supply over 200,000 MWh per year, Norwegian company Statkraft has started sourcing electricity from the site as part of its long-term power purchase contract. .

Final approvals for the project were granted in March 2017 with contracts for the project awarded in 2017 and 2018. The first power was demonstrated from the site in October 2018. Kincardine consists of a total of six wind turbines The project , which was originally slated to reach full capacity by the end of 2020, is expected to have a 25-year lifespan providing enough electricity from more than 50,000 Scottish homes.

“This is the first floating project that Statkraft has been involved in and we expect more to follow; a key technology that could help countries around the world meet their renewable energy targets, ”said John Puddephatt, long-term PPA originator at Statkraft. “We are proud to be one of the partners who contributed to the realization of this highly innovative project. PPAs such as these play a key role in providing project owners with financial predictability and security, thus helping to enable long-term investment and financing.

Under the agreement reached in 2018, Statkraft will purchase all of the power generation from the floating wind project with a guaranteed minimum price per MWh until 2029. This long-term partnership with Statkraft, which covers 100% of the electricity produced by the project, was implemented with pre-agreed conditions for the entire duration, reducing the financial risk for its investors.

Jaime Altolaguirre, Managing Director of KOWL de Cobra Group (majority shareholder of KOWL): “We entered into this agreement with Statkraft with confidence, knowing that selecting them and choosing this particular PPA structure allowed us to clarify our long-term income. . also gave us a partner with whom we were willing to work in the long term. We were looking for a counterparty who had experience in UK offshore wind and a background with UK law firms, lenders and investors. Statkraft, as Europe’s largest supplier of renewable energy, has stood out for its large-scale investment and operational experience in this region. This solid experience has enabled him to offer bankable and competitive business conditions and to get started quickly.

Since 2006, Statkraft has invested nearly $ 2 million in UK renewable energy infrastructure and has facilitated over 6 GW of renewable energy production through PPA contracts. Statkraft says it has a long-standing interest in Scotland, as it is one of the most important countries in the challenge of achieving global carbon neutrality, due to its favorable conditions for renewable energy.


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HARTFORD FINANCIAL SERVICES GROUP, INC. RECORDS (8-K) disclosing other events, financial statements and exhibits https://bobsbirdhouse.com/hartford-financial-services-group-inc-records-8-k-disclosing-other-events-financial-statements-and-exhibits/ https://bobsbirdhouse.com/hartford-financial-services-group-inc-records-8-k-disclosing-other-events-financial-statements-and-exhibits/#respond Tue, 21 Sep 2021 20:28:31 +0000 https://bobsbirdhouse.com/hartford-financial-services-group-inc-records-8-k-disclosing-other-events-financial-statements-and-exhibits/ Article 8.01 Other events At September 16, 2021, Hartford Financial Services Group, Inc. (the“Company”) has entered into a Senior Note Pricing Agreement, dated September 162021 (the “Pricing Agreement”), which incorporated by reference the terms of thesenior notes Subscription contract General conditions datedSeptember 16, 2021 (the “Subscription Agreement”), each between the Company andBarclays Capital Inc., Goldman […]]]>

Article 8.01 Other events

At September 16, 2021, Hartford Financial Services Group, Inc. (the
“Company”) has entered into a Senior Note Pricing Agreement, dated September 16
2021
(the “Pricing Agreement”), which incorporated by reference the terms of the
senior notes Subscription contract General conditions dated
September 16, 2021 (the “Subscription Agreement”), each between the Company and
Barclays Capital Inc., Goldman Sachs & Co. LLC and US Bancorp Investments,
Inc.
, as representatives of the subscribers named in this agreement (the
“Underwriters”), with regard to the offer and sale by the Company of
$ 600 million total principal amount of its 2,900% Senior Notes due 2051 (on
“Leading Notes”). Senior Notes Sold Under the Underwriting Agreement
have been registered under the Company’s registration statement on Form S-3 (file
n ° 333-231592). The sale of the Senior Bonds was closed on
September 21, 2021. In addition to the information provided in this section 8.01,
certain documents are attached as part of the offer of the
Senior Notes.

The pricing agreement provides, among other things, that the underwriters
purchase the senior notes of the Company at the public offering price, less one
0.875% discount per Senior Note.

The foregoing description of important terms of the underwriting agreement
and the Price Agreement is qualified in its entirety by reference to the
Subscription Agreement, which is attached hereto as Schedule 1.1, and the Price
Agreement, which is attached hereto as Exhibit 1.2, and incorporated herein by
reference.

In accordance with the underwriting agreement and the pricing agreement, the Company issued
to September 21, 2021 $ 600 million total principal amount of senior notes
under a senior trust deed dated April 11, 2007, between the Company
and The Bank of New York Mellon Trust Company, NA, as trustee (the “Trustee”),
as completed by the first complementary act dated August 9, 2013,
the second complementary act dated August 19, 2019 and the third
complementary act dated September 21, 2021 (together, the
“Indenture”).

The Senior Notes are senior unsecured obligations of the Company and rank
on par with all unsecured and unsubordinated debt of the Company. The
The Senior Notes bear interest at an annual rate of 2.900%. The Company will pay
interest on the semi-annual senior notes in arrears on March 15 and
September 15th of each year, from March 15, 2022.

The act contains restrictive clauses which, among other things, limit the capacity of
the Company and its restricted subsidiaries to sell, transfer or create certain
liens, including liens on the share capital of any restricted subsidiary.

The Senior Notes will mature on September 15, 2051. However, before March 15,
2051
(6 months before maturity), the Company may, at its option, redeem the
Senior Securities at any time in whole or from time to time in part in multiples of
$ 1,000, at a redemption price equal to the greater of (i) 100% of the capital
amount of Senior Notes to be reimbursed and (ii) the sum of the discounted values
of the remaining scheduled payments of principal and interest on the Senior
Notes to be redeemed (assuming that the Senior Notes mature on March 15, 2051)
(excluding accrued interest until the repayment date), discounted at
repayment date on a semi-annual basis (assuming a 360-day year including
twelve months of 30 days) at the Treasury rate then in force increased by 20 basis points,
plus accrued and unpaid interest up to the date of reimbursement excluded. At
or after March 15, 2051, the Company may, at its option, redeem the Senior Bonds
at any time in whole or in part in multiples of $ 1,000, at a redemption price
equal to 100% of the principal amount of the Senior Notes to be reimbursed plus
accrued and unpaid interest up to, but excluding, the date of repayment.

The act contains the usual events of default. If an event of default under
the indenture occurs in respect of the Senior Notes and continues on
Trustee or holders of at least 25% of the total capital of the
Senior Notes in circulation may declare the principal amount of all Senior Notes
Notes to be immediately due and payable.

The foregoing description of the Indenture and the Senior Notes is
its entirety by reference to the full text of these documents, which are attached
or incorporated by reference herein as parts 4.1, 4.2, 4.3, 4.4 and 4.5,
respectively, and incorporated herein by reference.

————————————————– ——————————-

The Company intends to use the net proceeds from its sale of the Senior Notes to
buy back the outstanding amount in full $ 600 million principal amount of the Company
7.875% floating rate fixed rate subordinated debentures maturing in 2042, which are
redeemable at par on or after April 15, 2022. Awaiting application of the net
proceeds, the Company intends to invest the proceeds in marketable securities.

Item 9.01 Financial statements and supporting documents

(d) Exhibits.



Exhibit No.       Description

1.1                 Underwriting Agreement General Terms and Conditions, dated
                  September 16, 2021, among The Hartford Financial Services Group,
                  Inc. and Barclays Capital Inc., Goldman Sachs & Co. LLC and U.S.
                  Bancorp Investments, Inc., as the representatives of the
                  Underwriters.

1.2                 Pricing Agreement, dated September 16, 2021, among The Hartford
                  Financial Services Group, Inc. and Barclays Capital Inc., Goldman
                  Sachs & Co. LLC and U.S. Bancorp Investments, Inc., as the
                  representatives of the Underwriters.

4.1                 Senior Indenture, dated as of April 11, 2007, between The
                  Hartford Financial Services Group, Inc. and The Bank of New York
                  Mellon Trust Company, N.A., as Trustee (incorporated herein by
                  reference to Exhibit 4.03 to The Hartford Financial Services
                  Group, Inc.'s Registration Statement on Form S-3 (No.
                  333-142044), dated April 11, 2007).

4.2                 First Supplemental Indenture, dated as of August 9, 2013,
                  between The Hartford Financial Services Group, Inc. and The Bank
                  of New York Mellon Trust Company, N.A., as Trustee (incorporated
                  herein by reference to Exhibit 4.07 to The Hartford Financial
                  Services Group, Inc.'s Registration Statement on Form S-3 (No.
                  333-190506), dated August 9, 2013).

4.3                 Second Supplemental Indenture, dated as of August 19, 2019,
                  between The Hartford Financial Services Group, Inc. and The Bank
                  of New York Mellon Trust Company, N.A., as Trustee (incorporated
                  herein by reference to Exhibit 4.3 to The Hartford Financial
                  Services Group, Inc.'s Current Report on Form 8-K, dated
                  August 19, 2019) .

4.4                 Third Supplemental Indenture, dated as of September 21, 2021,
                  between The Hartford Financial Services Group, Inc. and The Bank
                  of New York Mellon Trust Company, N.A., as Trustee.

4.5                 Form of global note for $600 million aggregate principal amount
                  of 2.900% Senior Notes due 2051.

5.1                 Opinion of Cleary Gottlieb Steen & Hamilton LLP.

23.1                Consent of Cleary Gottlieb Steen & Hamilton LLP (included in
                  Exhibit 5.1).

101               Cover Page Interactive Data File - the cover page XBRL tags are
                  embedded within the Inline XBRL document.

104               The cover page from this Current Report on Form 8-K, formatted in
                  Inline XBR

————————————————– ——————————-


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Australian Regulators Weekly End – Monday September 20, 2021 https://bobsbirdhouse.com/australian-regulators-weekly-end-monday-september-20-2021/ https://bobsbirdhouse.com/australian-regulators-weekly-end-monday-september-20-2021/#respond Tue, 21 Sep 2021 08:05:35 +0000 https://bobsbirdhouse.com/australian-regulators-weekly-end-monday-september-20-2021/ Keep up to date with the latest trends in financial services regulation and compliance? Investing time in your professional development in a rapidly changing financial services industry is a challenge. To meet this challenge, the Australian Regulators Weekly Wrap is designed to keep you on the cutting edge of your practice by getting set up […]]]>

Keep up to date with the latest trends in financial services regulation and compliance?

Investing time in your professional development in a rapidly changing financial services industry is a challenge. To meet this challenge, the Australian Regulators Weekly Wrap is designed to keep you on the cutting edge of your practice by getting set up quickly.ng on the five main developments of the last week, analyzes and practical considerations for the future.

  1. License Update (ASIC): ASIC has published a report outlining key issues, new and proposed changes to its licensing processes, and other work it has undertaken that affect licensees. Between July 2020 and June 2021, ASIC received 1,883 AFSL and ACL requests (an increase from 1,346 the previous year). The increase is mainly due to licensing reforms for insurance claims processing and debt management services. The requests for AFSL alone have increased by 40%. ASIC approved 458 new AFSL and ACL (up from 394 last year). ASIC also approved 537 change requests from existing licensees (the same as last year). In addition to the AFS and credit license approvals, 391 AFS and ACL applications were withdrawn or rejected for filing, one was denied, 563 licenses were revoked and 23 suspended. My top read of the week for practitioners in the licensing space (we did / are doing about 20 of them ourselves in 2021), you can read the report here.
  2. BBSW (RBA) securities: the Reserve Bank introduces new eligibility criteria for securities to be accepted as collateral in the Reserve Bank’s market operations. Floating rate notes and marketed asset-backed securities issued on or after December 1, 2022 that reference BBSW must include strong fallback provisions. All treasury transactions, regardless of when they are issued, must include strong fallback provisions. The eligibility criteria for FRNs and marketed asset-backed securities issued before December 1, 2022 remain unchanged. However, issuers should consider including robust fallbacks for these securities, based on their term to maturity, as part of prudent risk management. More details are here, and it won’t come as a surprise – ASIC and APRA have been hitting the drums on BBSW’s change for some time now.
  3. Design and Distribution (ASIC): ASIC has released additional information for licensees and financial advisors who are authorized representatives to help them prepare for the start of design and distribution obligations on October 5, 2021. The backgrounder is here and contains very useful summary information that complements RG 274. For example, it clarifies that advisory licensees and financial advisers are exempt from the duty of reasonable measures when providing personal advice, but not when providing general advice. The exemption from the duty of reasonable measures applies when personalized advice is provided because, in these circumstances, the adviser provides advice tailored to the consumer’s individual situation. Considering the amount of TMDS that financial advisors (and credit representatives) will receive from issuers today, the information being distilled is quite timely.
  4. Criminal actions (ASIC): the business regulator has brought criminal proceedings against CBA for mis-selling consumer credit insurance. The charges relate to allegations that between 2011 and 2015, the CBA made false or misleading representations to customers that insurance policies had uses or benefits for those customers when some or all benefits were not available. He also brought criminal charges against ME Bank, again for misleading and false statements. The charges relate to letters issued by ME Bank to mortgage clients between September 2016 and September 2018, which ASIC says made false and misleading statements about: the clients’ relevant annual interest rates; and / or, the minimum reimbursement to be paid after the expiry of the fixed period; and / or the minimum repayment payable after the expiration of the interest rate period only. ASIC also alleges that between December 2016 and February 2018, ME Bank did not notify mortgage clients in writing that their annual interest rates and minimum repayment amounts changed after their period expired. interest rate only and / or fixed rate. The actions are notable for the fact that ASIC considers it can meet the higher burden of proof required to maintain criminal charges, and aggressiveness – such litigation is rare. A little worrying as well, given that the new violation reporting regime starting in October specifically makes deceptive and deceptive conduct a “significant” violation. For more details read here.
  5. Tax treaties (Treasury): the government will expand Australia’s network of tax treaties to conclude 10 new and updated tax treaties by 2023, building on Australia’s existing network of 45 bilateral tax treaties. The objective is to improve the integrity of the tax system through the establishment of a bilateral cooperation framework on the prevention of tax evasion, the collection of tax debts and rules to fight against tax evasion. , and is supposed to cover around 80% of foreign investment in Australia. Read this as another of the Treasury’s interventions, along with insolvency reform and attempts to reverse onerous responsible lending regulations on the credit sector to enhance Australia’s economic rebound after COVID-19 . The consultation is open until October 31, 2021.

Thought for the future: the US regulatory system is, from a certain point of view, smart in that it uses industry itself to help regulators. One example is paying whistleblowers for positive results. The Securities and Exchange Commission said the total amount of payments made to whistleblowers exceeded $ 1 billion after the financial watchdog bestowed its second highest award on a person for reporting wrongdoing – one person received this week a total of $ 110 million for information and assistance. which has led to successful enforcement actions by the SEC and other entities. Australia considered, but rejected this route. It did, however, include a “dobbing” obligation as part of the new improved violation reporting regime as of October 2021. That is, AFSL and ACL holders are required to report violations. violations of other ASIC licensees. It will be very new for us, and I think it is quite difficult culturally, especially for multi-AFSL and ACL organizations.


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Announcement of a new listing of financial instruments – “SSN131” – SENS https://bobsbirdhouse.com/announcement-of-a-new-listing-of-financial-instruments-ssn131-sens/ https://bobsbirdhouse.com/announcement-of-a-new-listing-of-financial-instruments-ssn131-sens/#respond Mon, 20 Sep 2021 08:55:00 +0000 https://bobsbirdhouse.com/announcement-of-a-new-listing-of-financial-instruments-ssn131-sens/ New Financial Instrument Listing Announcement – “SSN131” The Standard Bank of South Africa Limited New Financial Instrument Listing Announcement – “SSN131” Stock Code: SSN131ISIN Code: ZAG000180043 The JSE Limited has granted a listing to The Standard Bank ofSouth Africa Limited – SSN131 Senior Unsecured Floating RateNote due 22 March 2022 – sponsored by The Standard […]]]>
                            

New Financial Instrument Listing Announcement – “SSN131”

The Standard Bank of South Africa Limited

New Financial Instrument Listing Announcement – “SSN131”

Stock Code: SSN131
ISIN Code: ZAG000180043

The JSE Limited has granted a listing to The Standard Bank of
South Africa Limited – SSN131 Senior Unsecured Floating Rate
Note due 22 March 2022 – sponsored by The Standard Bank of South
Africa Limited, under its Structured Note Programme.

Authorised Programme size ZAR60,000,000,000
Total notes issued
(including current issue) ZAR54,715,746,386.55
Full Note details are as follows
Issue Date: 21 September 2021
Nominal Issued: ZAR250,000,000
Coupon Rate: Three-month ZAR-JIBAR-SAFEX
plus 1.08% as per the
Applicable Pricing
Supplement
Coupon Indicator: Floating
Interest Rate Determination Date: Issue Date and the Maturity
Date
Trade Type: Price
Issue Price: 100%
Maturity Date: 22 March 2022
Interest Commencement Date: Issue Date
First Interest Payment Date: 21 December 2021
Interest Payment Date: 21 December 2021 and the
Maturity Date
Business Day Count/Convention: Actual/365(fixed) and
Following Business Day
Books Close: 16 December 2021 and 17 March
2022, until the applicable
Interest Payment Date
Last day to register: By: 17h00 on 15 December 2021
and 16 March 2022 until the
Maturity Date
Placement Agent: The Standard Bank of South
Africa Limited
Debt Security subject
to guarantee; security
or credit enhancement: Not Applicable

Additional Terms and Conditions: Investors should study the
Pricing Supplement for full details of the specific terms and
conditions applicable to this specific issuance.
Notes will be deposited in the Central Depository (“CSD”) and
settlement will take place electronically in terms of JSE Rules.

Dated 20 August 2021

Sponsor – The Standard Bank of South Africa Limited

For further information on the Note issued please contact:
Johann Erasmus SBSA (Sponsor)
Email: johann.erasmus@standardbank.co.za

Date: 20-09-2021 10:55:00
Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (‘JSE’).
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.


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Prepayment: How to make the best use of your excess money https://bobsbirdhouse.com/prepayment-how-to-make-the-best-use-of-your-excess-money/ https://bobsbirdhouse.com/prepayment-how-to-make-the-best-use-of-your-excess-money/#respond Sun, 19 Sep 2021 19:30:42 +0000 https://bobsbirdhouse.com/prepayment-how-to-make-the-best-use-of-your-excess-money/ In an age when fixed income products offer lower returns and stock markets remain foamy, individuals should use their excess cash to prepay long-term debt such as outstanding credit cards, debts and loans. personal, auto and real estate loans. Experts suggest that if an individual can generate after-tax returns higher than the current interest rate […]]]>

In an age when fixed income products offer lower returns and stock markets remain foamy, individuals should use their excess cash to prepay long-term debt such as outstanding credit cards, debts and loans. personal, auto and real estate loans.

Experts suggest that if an individual can generate after-tax returns higher than the current interest rate on a home loan, then they should invest in the excess money. They suggest that stock valuations are stretched and returns can be mixed and investors who start investing in stocks now shouldn’t expect much higher returns. Before prepaying loans that contribute to long-term asset building, a person should secure sufficient emergency funds to cover expenses for one year and adequate life and health insurance coverage. If this is not done, in an emergency the person may need to take out a personal loan, which attracts a much higher rate than a home loan.

However, in the case of a car loan, it is ideal to repay with additional money as a car loan would be at a higher interest rate than the home loan without any tax benefits and, finally, a car. is definitely a depreciating asset. whereas in general a house is an asset that appreciates.

Prepaid real estate loan
As equity investments have yielded higher returns, one can record profits and prepay part of the mortgage. Experts say the ideal strategy in this bull market is to stay invested with occasional reservations of partial profits and shift some profits to fixed income or prepay loans with higher interest rates. As interest rates on home loans have fallen over the past two years, prepaying is ideal as a rise in interest rates will place an additional burden on the borrower.

Experts suggest that if individuals are unable to make a lump sum payment, they can opt for a systematic withdrawal plan from their mutual fund investments and use the monthly proceeds to increase the EMI. The EMI increase can be requested at any time and there is no charge for such a request. Additionally, for an employee, the increase in EMI helps as the borrower progresses in their career and higher compensation packages that will result in higher disposable income.

In a home loan, the interest portion is prepaid. Thus, a borrower must start prepaying a certain amount in the first year of the loan. Paying early later does not save much in terms of interest payments. Banks do not charge any prepayment penalties on floating loans and banks will accept prepayment if it is made from their own funds and as proof they will ask for a six month bank statement.

Before repaying a mortgage loan early, it is necessary to evaluate the tax advantages of the mortgage loan. The Income Tax Law provides for a tax deduction of interest in the case of self-employed up to Rs 2 lakh and up to Rs 1.5 lakh on the repayment of principal under Article 80C.

Clear credit card contributions
Any excess money should be used to pay credit card dues. Rolling credit by paying the minimum amount owed is not a good idea as banks charge an interest rate of between 35% and 45% per annum, depending on spending, amortization, and banking habits. use. In fact, rolling credit is much more expensive than even a personal loan, which can be used at 13-15% per annum.

If you have more than one credit card, you must first pay the premiums on the card that charges the highest interest rate. This will reduce the individual’s interest expense, as unpaid contributions on cards with a higher interest rate will accumulate more interest. So, once the credit card bill with the highest interest rate is paid off the excess money, it must then switch to the card with the least outstanding balance.


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