Argosy 7 Year Green Bonds

Anyone applying for these? Minimum rate 2.85% - to be confirmed by bookbuild Friday.
Brokerage to be paid by Argosy (would anyone apply if they weren't...…).
Shares paying around 5% gross at present.

Yes, somewhere to put my maturing term deposit money. Interest rates don’t look like they’re going back up anytime soon

ARG shares are yielding 4.3% net at the current price of $1.46 and are a PIE fund so for those on a 33% tax rate the effective gross yield is the equivalent of 4.3 / 0.67 = 6.42% gross at present plus possible increases in dividends in the years ahead. That compares to a maximum yield of 2.85% on these bonds.
I am not interested in the bonds but hold some ARG shares.

Whats the yield after tax and inflation?

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Originally Posted by mcdongle

Whats the yield after tax and inflation?

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Yes, exactly ! Probably zero but they are senior bonds so are very low risk and will attract money because institutions have to have a certain percentage of their funds in bonds.

Holding the bonds makes sense, if yields in NZ are going to zero or negative. My take on that is, they will. So I am interested -slightly, tendency NO-.

I would not buy the shares currently, with a fair value estimation of 1.13 and future earnings growth (3 years out) estimated at -6.8%.

ARG's dividend (4.35%) is higher than the bottom 25% of dividend payers in the NZ market (3.02%).
ARG's dividend (4.35%) is low compared to the top 25% of dividend payers in the NZ market (5.61%).

Tendency: not worth the risk

I don't know what research you're reading but I think its a load of horse manure. ARG has a good history of growing eps and their present premium to NTA is at the lower end of the listed property sector and their PIE yield at the higher end.

Agree interest rates could go even lower than what's currently prevailing but not sure we'll go to zero. Inflation number out today at 1.7% so taxpayers on the 33% tax rate will get a maximum of 2.85% less 33% tax = 1.91% net and basically only just keep their heads above water with inflation. I have no interest in that sort of investment "return" but each to their own.

Not that it makes any difference, but the rate was set at 2.9% today.