pierre_delecto [he/him]

  • 1 Post
  • 24 Comments
Joined 1 month ago
cake
Cake day: October 16th, 2024

help-circle


  • When someone mixes % and percentage points it's a red flag in my mind:

    For reference, when Sri Lanka issued USD bonds in 2022 they traded at a roughly 9% premium (very high risk). When Alibaba issued USD bonds in 2017 they traded at 1.08% above the rate (medium risk). When China issued bonds last week, however, they traded at only 0.007-0.029% above the rate (3Y/5Y)

    If the base rate is 3%, 9% premium means a rate of 3.27% (3%*1.09). If he means that the rate is 9 percentage points higher, that would mean a rate of 12% (3%+9%) or 4x the base rate. Pretty big difference.