Session Presenters

Jeff Davis
Managing Director
Andy Gibbs
Senior Vice President

Breakout 2: Taking Loss on the Installment Method – Impact on Value

Banks are saddled with hundreds of billions of low-coupon bonds that are worth far less than the current market price. As much as one might like to do so, there is no escaping the bloodless verdict of the market in which losses will be realized immediately, if the bonds are sold, or slowly, if the bonds are held to maturity. This session reviews the impact taking a loss today vs. holding the bonds to maturity can have on the value of a bank’s equity and also reviews an intermediate strategy referred to as the installment method.

Session Resources