Thursday, January 8, 2009

Links To Prospectuses for the AON TCs in One Place

To further the discussion on functional equivalency in bond trading, I thought that it would be helpful to place the prospectuses of the four Trust Certificates that containing the Aon junior debenture in one place for comparison for anyone interested in learning the process of becoming a better individual investor:



KVW: 424B5

It goes without saying that you have to match the correct prospectus with the right symbol.  This can be done by taking the information in the prospectus which identifies the series of the security and comparing it with the information at a financial web site like Yahoo Finance. The KVW prospectus says it is Corts Trust IV.  This is the reference in yahoo too. KVW: Summary for STR PD 8 CORTS AON A - Yahoo! Finance  For further verification, you compare the name and the coupon amount.  KVW has a 8% coupon for example.  The brokerage firm that originated the grantor trusts for KVW, KTN and KVF was Smith Barney.  The name of its company starts with "Structured Products".  If you wanted to find a prospectus originated by Smith Barney, then you would go to the SEC web site (Edgar company search) and enter in the search field "structured products"EDGAR Company Search   This is not rocket science.  My only observation is that no one should even consider investing in any bond or bond like investment unless they are first willing to find and to read the prospectus as it pertains to the major issues found in such a document:  maturity, priority/seniority, deferral rights, rights of owner in the event of default, coupon, call date, and par value.  Once that has been done, then you have just reached first base with the really hard work yet to come.   If you are unwilling to do that yourself, then in my book you have no business even thinking for a moment about considering the possibility of  investing in these types of securities.   Anyone who does not follow the investing process may call themselves an experienced individual investor, doing it for decades or whatever, but in reality they have not left the batter's box yet no matter how long they have being doing it.  The process for stock investing has different characteristics and requirements, with some overlap with bond research, but it is still a detailed, time consuming, and painstaking process. 

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