Over the past three weeks, the VIX index (a measure of expected volatility of the US market over a 30-day forward looking period) has steadily increased from the mid teens to a maximum of 82.7% on 16-Mar-2020. To put this in perspective, the VIX index peaked at 80.9% during the 2008 financial ... >>>Read More
Should ASRs have the “Lookback” Termination Feature?
In a variable maturity ASR, the bank has the right to terminate the ASR on any date that occurs between the specified first acceleration and final termination dates. In return for having this valuable optionality, the bank agrees to provide the issuer with a guaranteed discount to VWAP. Most ... >>>Read More
Should all ASRs have 80% Upfront Share Delivery?
An attractive feature of ASRs is the upfront share delivery. The immediate retirement of shares provides greater EPS improvement than an equivalent amount of open market share repurchases. The delivery also significantly reduces the credit exposure to the bank that is created by the ... >>>Read More
Are You Getting the Best ASR Pricing?
Over the past five years, Matthews South has advised clients on over $30 billion of ASR transactions. As a result, we have collected a large amount of data on achieving the best pricing for ASRs. In this write-up, we “open source” our findings so that all ASR issuers may benefit from what we have ... >>>Read More