IFTHA Infratil Perpetuals

[bondholder007]

An interesting discussion. I bought IFTHA in 2007 when it was showing about 9% yield. A year or two back I read Chris Lee's suggestion that IFT should do something to help bondholders and had an email debate with Tim Brown. He of course used the "it will disadvantage shareholders" argument. Anyway yield is now down to 3.97% so on the principle that if you can beat them you join them I bought another batch at the discounted price. These show 6.75% which is about market average at present.

As has been pointed out above once the swap rate rises IFTHAs will start to look good. This assumes of course that IFT dont cash them up. There is sure to be clause in the deal somewhere that allows this.

Bonds should be an important part of any NZ portfolio because of their relative security and high yield by world standards but you have to know how they work. I also have another "perp" RCSHA (Rabo) which is yielding 8.32% currently. Their reset date is sometime in 2014 and I will need to follow the price trend and bail out if necessary.

Re "relative security" I got burnt with Blue Star but that's abnormal. Cheers