Holdco bonds could solve hy disclosure fears

Author: | Published: 18 May 2011

High yield investors concerned about slim disclosure and voting on enforcement are shifting their attentions to a new type of product: holdco bonds.

The holdco bond, exclusive to utility companies, was developed in January by Linklaters. It offers investors a yield pick-up on so-called safe securitised-utility bonds.

There are now four holdco bonds in the market: Anglian Water, Thames Water, Southern Water and BAA, all UK utilities companies.

A holdco bond is a rated public bond issued by a holding company of a utilities or infrastructure group that has been securitised and ring fenced. The...