In a recent article published in Alan Kohler's Eureka Report, Scott looks at what can be learned from the recent collapse of Timbercorp. In particular he looks at three issues:
- The role that a credit rating place in a fixed interest offering;
- Why a "subordinate" offering carries extra risks.
- Why risk and return really are related.
Scott concludes that the rush to the safety of fixed interest investments should be tempered with an understanding of their risks. The current Timbercorp situation is a reminder of the potential dangers of some fixed interest investments, dangers that lurk below the attractive promise of a fixed income return and the repayment of capital at the end of the term.
To take a look at the full article please click on the following link -
Timbercorp's fall reverberates.
