kiwi income properties KIP MCN offer

[devito]

I have just received my rights entitlement acceptance form from KIP.

If I were to buy the ordinary shares they are going to pay a 7.5% fully imputed dividend this year. Being a PIE I pay no extra tax.

For the MCM’s to pay me the tax paid equivalent they would need to pay 12%. Ie 12.09% less 38% tax = 7.5% They are only paying 8.95%.so I am down 2%pa on income with the MCM’s.

If I bought the shares I would benefit in any capital gain above the current price (just over $1) over the next five years. With the MCM’s I would only get the benefit of any gains over $1.40

I think the only benefit is if the shares were to fall over that period I would be able to convert at the lower price in 5 years time.

Overall from what I can see the MCM’s are not as good as the ordinary shares.

Do you agree with that or am I missing something?

[777]

That's my take as well. Also 1 for 35 gives you such a small number it is not worth the paperwork. You would have to hold 350,000 units just to get 10,000 MCN's. I doubt there will be many takers from the current unit holders.

[devito]

they will let you subscribe for more than your entitlement. It may be subject to scaling but I doubt it.

I think the issue is only appropriate for retired or low income earners who don't benefit from the PIE structure of the KIP main share dividends.

With the low ratio of entitlement most people can't even trade their rights. The brokerage would outweigh the rights value!

[BRICKS]

WHAT ever they are BRICKS got 75 of them not to worry you say so I WONT..

[Excelsior]

I think you'll find all small holders got a minimum of 500. We benefit from a capital gain if price at maturity is above 1-20 but are losers if the price is below $1 at maturity. Good point from Devito about interest rates and Pie. Would probably be better off with units unless the distribution falls away. Market not too keen on them. See sellers listed at 0.1 cents

[Jessie]

I think you'll find all small holders got a minimum of 500. We benefit from a capital gain if price at maturity is above 1-20 but are losers if the price is below $1 at maturity. Good point from Devito about interest rates and Pie. Would probably be better off with units unless the distribution falls away. Market not too keen on them. See sellers listed at 0.1 cents

The rights are worth nothing. It appears anyone can get an allocation from a broker if they want.

As for comparing them with Kiwi units, the MCNs are basically a 5-year fixed interest investment with quite a good interest rate (8.9%) and with some potential upside in value. Kiwi units are shares with potential upside or downside on both share price and dividend, which currently having a very good dividend (8% taxed-paid I think). Depending on personal circumstance, either, both or neither could be suitable investments.

[devito]

The rights are worth nothing. It appears anyone can get an allocation from a broker if they want.

As for comparing them with Kiwi units, the MCNs are basically a 5-year fixed interest investment with quite a good interest rate (8.9%) and with some potential upside in value. Kiwi units are shares with potential upside or downside on both share price and dividend, which currently having a very good dividend (8% taxed-paid I think). Depending on personal circumstance, either, both or neither could be suitable investments.

KIP dividend is on track for 7.5% this year and is tax paid (It is a PIE).

I think I will stick with the shares and ignor this MCN issue. Wish they hadn't posted me piles of rubbish to read on it. The money would have been better spent on extra dividends:)

[scamper]

I take it that you can't sell them??

[Contrarian]

Gidday

These guys are weird, I think from memory i've got about 20k of shares & I get a offer for about 500 of the new mcns, Do I want the paper work for $40 of interest pa. NO!

They should have guaranteed $10k worth & if they overshot retired some bank debt.

As others have said, why would you poke money into KIPMCN MKII when there are other property plays that will yield much more.

The fiscal genius guys in this case have made some errors IMHO

[devito]

I take it that you can't sell them??

yes you can sell them. The brokerage will cost you more than the rights are trading at. Currently about .5 cents.

The whole exercise is a BIG waste of time in my opinion (and a waste of company money...my dividends).