Black Monday

[couta1]

Meh it'll be fine for a bit yet 

I just tossed a coin 3 times and it came up heads twice, so we should be okay.

[Food4Thought]

I just tossed a coin 3 times and it came up heads twice, so we should be okay.

Agree. Sun came up... the moon went down. People still spending and population expanding....

[arc]

Off topic but not sure where else to put this question. Have googled bonds and fixed interest and yield rates but still not sure about the combo data as displayed below

if a company is selling bonds, samples shown below, and the "coupon" is 5.25% (the interest rate they will pay?) , what is the "offer" column with its displayed % ?

Corporate Bonds

Issuer	Maturity	NZDX Code	Coupon		Rating	Available	Offer
AIA	28/05/2021	AIA130	5.52%		A-	ref	3.58	%
ANZ	13/03/2019	Not Listed	6.25%		AA-	ref	2.98	%
	25/09/2020	Not Listed	4.03%		AA-	ref	3.66	%
ASB	08/06/2017	Not Listed	6.06%		AA-	ref	2.40	%

[couta1]

The offer column shows the effective interest rate you will receive by paying the current asking price for said bonds, ie,you are paying a premium to obtain the coupon rate.

[arc]

Thanks Couta
Seems like a duff deal to me then.
Excuse my total ignorance of these things but cant one simply go direct to the source supplier to obtain the full coupon rate?. Does the process involve a middle-man taking a slice of the action ?

[couta1]

Thanks Couta
Seems like a duff deal to me then.
Excuse my total ignorance of these things but cant one simply go direct to the source supplier to obtain the full coupon rate?. Does the process involve a middle-man taking a slice of the action ?

Once listed after issue, you can only buy on the secondary market at the offer price. It works basically the same way as shares, you may get them lower or higher than the coupon rate (IPO price if shares) at any given point in time, but in most cases you will pay a premium.

[RTM]

Thanks Couta
Seems like a duff deal to me then.
Excuse my total ignorance of these things but cant one simply go direct to the source supplier to obtain the full coupon rate?. Does the process involve a middle-man taking a slice of the action ?

Yes...that is what I think as well Arc. My advisor wanted a % of my money in bonds. And to buy them on the market. Didn't make sense to me. So I just waited for new issues and bought those so that I did get the coupon rate. The downside was that it took a while to get the appropriate bonds. Also harder to ladder them so they expire at varying times in an orderly way.

[arc]

Yes...that is what I think as well Arc. My advisor wanted a % of my money in bonds. And to buy them on the market. Didn't make sense to me. So I just waited for new issues and bought those so that I did get the coupon rate. The downside was that it took a while to get the appropriate bonds. Also harder to ladder them so they expire at varying times in an orderly way.

Thanks Couta and RTM
Starting to take a broader look at the financial market environment and whats available, for the "just incase scenario".

[stoploss]

Once listed after issue, you can only buy on the secondary market at the offer price. It works basically the same way as shares, you may get them lower or higher than the coupon rate (IPO price if shares) at any given point in time, but in most cases you will pay a premium.

Don't want to be picky Couta , however .
Might be better to qualify you will get them lower or higher than the coupon rate depending on current market interest rates . IE Rates go to 8 % a 5 % coupon will be trading at a discount all things being equal.
The rate they trade at will also be governed by the credit rating or solvency of the entity issuing them .

[RTM]

Hi Blobbles....Link doesn't seem to work. Could you provide a few clues on what to search for please,
Thanks. RTM.

This is a great listen from a very smart guy: http://www.radionz.co.nz/audio/playe...o_id=201840281