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STOP EVERYTHING YOU'RE DOING. IT IS HERE.
THE FIRST ZERO COUPON PERPETUAL BOND EVER.
THE FIRST ZERO COUPON PERPETUAL BOND EVER.
(In case your pricing model breaks done with 0/0 #DIV0 stuff, the current market price is 70% of par.)
Jokes aside, this is actually extremely interesting because this is afaik the first time a coupon formula for a bond gives a negative coupon. Which leads to a fascinating legal question since the different between a bond and a loan is that
A bondholder has no legal commitment/obligation, as opposed to a lender (that's why bonds are easy to transfer.) So if there is no commitment you can't ask for any money so you can't have negative coupons
But this bond's coupon formula should have given a negative rate at the last fixing ! To avoid a legal nightmare, the trustee discreetly decided to floor it at 0. So your floating bond suddenly has embedded derivatives!
Anyway, that was just another day in the world of negative rates madness. end/
breaks down* (bloody edit button!)
