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  1. #71
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    Quote Originally Posted by BIRMANBOY View Post
    Not looking to buy..already holding since inception. Just pondering what, if anything might be on the cards coming up. I think the reason they are trading at par is the uncertainty. Until 2018 they were trading well but since then has been gradual decline...
    Birmanboy, with the probable repayment date of the ANBHB bond coming up so soon, in just a couple of months, you wouldn't expect anything else but the market price of ANBHB returning to par. If you are probably going to be given $1 for each bond in a couple of months, why would anyone pay more than a dollar now? One reason might be to pick up the last interest payment, but that would have to be offset against the transaction cost of buying the bond. So the reason for the decline in the bond price is certainty about what is about to happen, not uncertainty!

    If the bond continues then the interest rate is reset to 'market rates'. So there is no reason to pay a premium today for any possible renewal rights. Nothing to see here. Everything behaving exactly as you would expect.

    SNOOPY
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  2. #72
    Advanced Member BIRMANBOY's Avatar
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    Agree mostly but the uncertainty arises as to if they renew and the rate becomes 4.25%...there may well be some people who like that as an option as opposed to a TD for example. Each scenario has slightly different dynamics that will appeal or not appeal to viewers depending on viewpoints...therein lies the uncertainty. ANZ is the one that sets the playing field and depending on what they choose, and what degree of takeup there is ..could go up or could go down.
    Quote Originally Posted by Snoopy View Post
    Birmanboy, with the probable repayment date of the ANBHB bond coming up so soon, in just a couple of months, you wouldn't expect anything else but the market price of ANBHB returning to par. If you are probably going to be given $1 for each bond in a couple of months, why would anyone pay more than a dollar now? One reason might be to pick up the last interest payment, but that would have to be offset against the transaction cost of buying the bond. So the reason for the decline in the bond price is certainty about what is about to happen, not uncertainty!

    If the bond continues then the interest rate is reset to 'market rates'. So there is no reason to pay a premium today for any possible renewal rights. Nothing to see here. Everything behaving exactly as you would expect.

    SNOOPY
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  3. #73
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    That you selling this morning BB?

  4. #74
    Advanced Member BIRMANBOY's Avatar
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    Hah no not me...i'm still pondering
    Quote Originally Posted by Grimy View Post
    That you selling this morning BB?
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  5. #75
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    Me too.....

  6. #76
    Advanced Member BIRMANBOY's Avatar
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    Update on these...they wont be redeeming these as per request of RB but will continue paying interest.
    Accordingly, ANB will not be permitted to redeem the NZ$500 million of
    mandatory convertible perpetual subordinated securities (Capital Notes) under
    ticker code ANBHB on the Optional Exchange Date (25 May 2020).
    The RBNZ's decision does not affect ANB's ability to pay interest on the
    Capital Notes. Interest is scheduled to be paid quarterly in arrears, is
    subject to ANB's discretion and other conditions as set out in the investment
    statement, and is non-cumulative.
    The terms of the Capital Notes also provide for their conversion into
    ordinary shares of Australia and New Zealand Banking Group Limited (listed on
    the NZX and ASX) in May 2020 or May 2022 (conversion is subject to certain
    conditions as set out in the investment statement of the Capital Notes).
    ANB's capital position remains strong, with total capital of $13.4 billion,
    or 13.6% of risk weighted assets at 31 December 20191. ANB's total capital
    increased by approximately $1.6 billion between 1 October 2018 and 31
    December 20191.
    ANB acknowledges the steps the RBNZ is taking to promote market liquidity and
    stability, the flow of funding to the economy and this measure to maintain
    the banking system's capital position during the COVID-19 pandemic.
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  7. #77
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    The interest rate (if not converted to shares-which I don't know if the RB would allow either) will be around 4%.
    I can live with that as long as they keep paying, and the situation is to be monitored and revisited by the RB.
    My Kiwibank KCFHA are similarly affected, their rate will be about 4.25%.

  8. #78
    Advanced Member BIRMANBOY's Avatar
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    Yes better than a term deposit so as you say I'm ok with that as well. My guess is that eventually they will just exchange them out for shares but who knows.
    Quote Originally Posted by Grimy View Post
    The interest rate (if not converted to shares-which I don't know if the RB would allow either) will be around 4%.
    I can live with that as long as they keep paying, and the situation is to be monitored and revisited by the RB.
    My Kiwibank KCFHA are similarly affected, their rate will be about 4.25%.
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  9. #79
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    Quote Originally Posted by Grimy View Post
    The interest rate (if not converted to shares-which I don't know if the RB would allow either) will be around 4%.
    I can live with that as long as they keep paying, and the situation is to be monitored and revisited by the RB.
    My Kiwibank KCFHA are similarly affected, their rate will be about 4.25%.
    KCFHA has another chance to repay funds in two years, 2022. That would be a better outcome. How would a conversion to shares work for KCFHA if they don't repay?

  10. #80
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    Quote Originally Posted by Fred114 View Post
    KCFHA has another chance to repay funds in two years, 2022. That would be a better outcome. How would a conversion to shares work for KCFHA if they don't repay?
    An interesting question. Is there a formula specified in the original offer document? Otherwise, I presume that they would get an accounting firm to dream up a value and conversion formula.
    Alternatively, repayment would avoid a lot of problems!

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