of similar bonds to drop up to US$10. It also sparked a 30 basis points widening in the European iTraxx subordinated financial index to about 237.5 basis points, while Deutsche Bank's subordinated credit default swaps widened by about 45 basis points.
Given the lack of incentive to call, Asian investors were predicting a similar outcome with Reliance. "Five years from now, imagine 30-year US Treasuries are at 5% and Reliance does not call the bonds, you will see the yield on their bonds jump to 8%," said another portfolio manager in Singapore who did not buy the bonds. "These private banking investors (who bought this) are going to get burned," another one said.