QHLHA - Quayside Holdings Pref Shares

[Aaron]

Many thanks for the information.

I don't know that I understand the dividend calculation formula. The 3 year swap rate + a margin (that is not very clear) reduced by 1-taxrate and finally increased by 25%.

I guess they have reset fairly recently as the 3 year swap rate per interest.co.nz was nothing in 2020.

With a formula to calculate yield and you will get a minimum $1 if redeemed, and if Legoman is right about the result, if a distribution is missed this is not that scary.

My first thought being risk averse was that in a crisis, directors could cancel the dividend and you would have no one to sell to, to free up capital but that is obviously wrong.

Redemption aside, as the yield on these move with interest rates (3 yearly) I would have thought a long term corporate bond at a similar or higher yield would provide potential capital appreciation if interest rates get slashed in the next crisis. Conversely this would beat the long term bond if interest rates rise.

Which way are interest rates going to go? A 30 year trend down might be hard to break.

I would note that I have also been afraid to buy long term bonds as well as I worry about liquidity in a crisis and the erosion of purchasing power through inflation. Not sure why I am posting really as for me at this stage it is all theoretical. I guess 15% risk free got me going.