Apart from initiating coverage on the airports this week, we have focused our attention on the regulatory capital securities for the insurers (Suncorp Group and IAG). These securities (which are generally listed) experienced some significant volatility in late October following the rating downgrade by Standard and Poors and broad market selling. Our thesis on these securities remains the same – they are not defensive fixed income instruments that will outperform during a time of stress but if you are comfortable with the equity risk, then they can represent a more stable income investment compared to owning the equity. The two charts below show the opportunity that arose and then quickly disappeared. There was not a significant amount of volume but for the investors who were comfortable with the risk, it has repaid them handsomely as the credit spreads are now trading around their medium term average.