IFTHA Infratil Perpetuals
Hi all just wondered what your thoughts are on this security.
It yields 1 year swap rate + 1.50% reset every year, int paid quarterly. So current interest is 4.97% and looks like will reset for the next year at a similar level (1 year swaps currently around 3.45%).
Trading at around 61c at the moment (was issued when swap rates were at a high point just prior GFC - surely one of the greatest debt deals done by an NZ corporate - for them).
So this equates to a current yield of about 8.1% pa.
IFT are regularly buying back IFTHAs.
Any increase in swap rates should deliver quite a strong capital gain (reverse of a normal bond) and in the meantimes earns over 8%.. :)
IFT balance sheet is ok and assets are reliable, credit looks good so not too worried about the perpetual nature of them.
Think this provide a good hedge for anyone exposed to rising interest rates and just quite an attractive investment.
What am I missing?
Cheers
disc no holding (yet)