This junior bond has the record for being the underlying security in the most Trust Certificates. So far, I have found it to be the underlying security in nine separate Trust Certificates, some are synthetic floating rate TCs while others just have a plain vanilla fixed coupon. I currently own two synthetic floaters with this bond as the underlying bond in the TC, and I have no position in the ones that are fixed coupon instruments. At some point in the future, this information may become important in a functionally equivalent trade when there is another meltdown in the TC market, where significant disparities in prices may arise between the functionally equivalent securities and between the TC and the price of the underlying security.
Synthetic Floaters: GYB PYT JBK (Added 7/7/09: JBK is no longer a Floater, see: additional statement made to this Post: Synthetic Floaters
FIXED COUPON: GYA PYC PYY PYK HJJ HJL HJN
UNDERLYING BOND INFORMATION AT FINRA:FINRA - Investor Information - Market Data - Bonds - Bond Detail
Both the underlying bond and the fixed rate coupons are close to each other in yield, about a 1% or so, with one exception (that is generally a narrow spread between a TC yield and the yield of the underlying bond). I do not intend to purchase one of the fixed rate GS coupon TCs. If I was in the market, I do not see any reason why I would buy one yielding 8.5% when another yields close to 9%, that 1/2% will mount up over a long period of time (one TC is below 8%). My personal preference would be to accept a couple percent less now in yield in return for the inflation protection of a float provision in the synthetic instruments. The synthetic floaters tied to this junior bond also sell at larger discounts to the $25 par value, which gives them more return at maturity and also serves to juice the value of the float provision when it is activated by a rise in 3 month Libor to above the guaranteed rate in those securities.
The prospectuses for these securities can be found under Third Party Trust Preferred at the quantumonline site. Third Party Trust Preferred Securities Table - QuantumOnline.com
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