So NZP are going for remarketing of the NZP010 bonds. New terms to be announced 29 September and will need 25% uptake to continue. Less than 25% will result in the step-up margin of 3.80% over 5 year swap, with ability to redeem on any dividend date. The rate would be over 8% if set today in this way.
Based on other bonds around, I would think the remarketing rate would need to be around 6.5% to get enough response and avoid holders gambling on the step-up rate? Then again, the investment grade bonds (especially A grade) are trading at pretty low levels (is ANBHA a good comparison, being another 5 yr reset?)
Guess we will find out soon enough.
NZP010 - remarketing
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16-09-2014, 10:35 PMLizardNZP010 - remarketing
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17-09-2014, 02:56 PMOkebw
Roughly 6.26%-6.56% it seems.
http://www.craigsip.com/Institutions/New-Offers.aspx -
17-09-2014, 06:50 PMNewman
S & P just downgraded NZP010 from A- to BB+ (junk). Refer to National Business Review for details.
7% would be the minimum for junk bonds I think, given that interest rate is going up. -
18-09-2014, 06:28 AMLizard
Well that makes the decision easier! Love the way they slipped that one through the NZX notice board under the heading "Standard & Poor’s affirms NZ Post rating and outlook"
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18-09-2014, 10:55 AMkiwitrev
Hi Liz
I don't hold but my buddy has a sizable parcel and is looking for advice. Trying to read between the lines of your post does your easier decision mean you will not roll the bond over?? Cheers -
18-09-2014, 05:16 PMkiwitrev
Well someone is taking a punt today 2m sale at 5.8%
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18-09-2014, 05:20 PMLizardPersonally, I won't be, but that's just my risk tolerance when it comes to bonds - I preserve all my gambling instincts for shares. :)Quote:
Originally Posted by kiwitrev
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04-10-2014, 02:03 PMLizard
I don't see anywhere where they refer to the recent change in credit rating in the remarketing information??! The information sent implies nothing is changing other than the interest rate - which is correct in that the rating has already changed, but still seems a little misleading.
They refer holders to the investor centre on their web-site for more information about NZ Post and, when checking on the notes, they do show the new rating of BB+ at the top... however, they rather undo it by having the incorrect text below stating "The Finance Notes have been assigned an issue credit rating of A- by Standard & Poor’s." -
16-10-2014, 11:42 PMOnionLizard,Quote:
Originally Posted by Lizard
Is the gamble you refer to the chance that the remarketing will be successful or not? And thus the interest rate is unpredictable?
For new investors there is less of a gamble -- if the remarketing is not successful then notes will not be sold to new investors. If successful the rate will be...
Quote:
the higher of (i) the Minimum Interest Rate (which has been set at 6.35% p.a.) and (ii) the five year swap rate on 17 November 2014, plus the Margin which has been set at 2.00% p.a.
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20-10-2014, 08:10 PMLizard
Hi Onion,
I think the remarketing will be successful, but personally, am not keen on holding bonds in the post business, given the declining performance. Especially not impressed that, given the obscurity in which they've buried the credit rating within their announcements, they appear to be hoping current noteholders don't notice the revised credit rating :ohmy: Five years at 6.35% is still a long time.
Actually, I don't like many bonds at current prices, and, if I'm going to take a risk, would rather pick some of the unrated ones over these. -
20-10-2014, 09:09 PMpercyDid you have any in mind??Quote:
Originally Posted by Lizard
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20-10-2014, 09:33 PMLizardWere you looking for some comments on the MTFHC's, percy? ;)Quote:
Originally Posted by percy
I will leave you to put forward that story...