A: Thanks for the question.

Yes, CBAPD should trade back to $100 as they near their redemption date. There are two opportunities:

a) a call date in December 2022 (the call is at CBA’s option);

b) on the mandatory exchange date –which I think is in late 2024.

They are trading at a higher yield than the new issue because:

a) they are longer than the new PERLS VIII;

b) the call date is beyond the call date date of PERLS VII;

c) the low margin of 2.8% means that there is some risk that they won’t be called; and

d) secondary market often misprices – investors sometimes pay too much for new issues.

Please also refer to my article a couple of weeks back.