Much like a floating rate bond protects investors from rising interest rates, the dollar denominated ‘Trump Treasuries’ will preserve buyers’ capital in the event that the US TV personality and businessman becomes US president in November by redeeming in Mexican pesos rather than what would likely be a worthless dollar by that stage.
Surprisingly, the bond will be fully sharia compliant. With Trump planning to ban Muslims from entering the US, Islamic investors will presumably receive their paper in electronic format.
In addition, to protect US coffers, coupon payments will be subject to a cap — labelled a “Top Trump”.
GlobalCapital can confirm that the bonds will have a four year tenor, but will feature a conditional investor put should The Donald’s policies lead to a so called 'Armageddon event' during a Trump presidency.
Investors criticised this feature, pointing out that it could take several months of legal wrangling to prove that Trump had been directly responsible for Armageddon, leaving them unable to reinvest their cash in the many post-apocalyptic distressed debt opportunities that would have likely arisen in the interim.
When asked to comment, Trump told GlobalCapital: “China. China, China, China, China. China!”
Whether that meant he would have preferred the Trump bonds to be in dim sum format could not be confirmed in time for publication.
Worth the money?
Overtaking the global format as the most widely available type of bond issue to investors, the Trump Bond will instead carry a Miss Universe label, presumably allowing off-planet investors to take a share. But analysts were sceptical. “If there are intelligent life forms in outer space, it’s highly unlikely any of them would want to incur the reputational risk of having anything to do with Donald Trump,” said one.
Several terrestrial investors questioned whether the International Monetary Fund might force them to accept a reduction in the nominal value of their bond holdings if a Trump-led US was ever at risk of default.
Trump’s response was typically forthright, and typically confusing: “Haircuts? Why are you asking me about haircuts? I’m sick of this topic. This is all my own hair.”
The candidate did, however, give a clue as to the potential size of the first issue: “It’s gonna be huuuuuuuuge!”
Bordering on the crazy
Proceeds from the bonds are thought to be going towards Trump’s planned wall along the US’s southern border. There was speculation among US debt bankers that Mexican investors would buy into the issue heavily, particularly as Trump had said that he would make Mexico pay for the border wall.
Sources in Mexico told GlobalCapital that indeed, if Trump did become US president, they would be more than happy to do anything they could to help hurry the construction along.
A source list for all the information contained in this story can be found here.