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  1. #61
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    At present I'd be happy either way-repayment of capital or conversion to shares.

  2. #62
    Advanced Member BIRMANBOY's Avatar
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    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...perhaps because holders didn't want to get caught having to take pricey ANZ shares ( $35 ) but now SP is at $19 odd so I wouldn't mind shares. Difficult to find information on these and Kiwi trev several posts prior says optional exchange date is May 2020. I'm sure info on options is somewhere but I cannot find it?
    Quote Originally Posted by Snoopy View Post
    Would you recover the brokerage buying fee with such a small time to maturity? ANBHB seems to be trading at very near to par. Existing Shareholders wouldn't like it if these bonds converted to shares. Good for ANBHB holders to get some ANZ shares at a discounted price, if such a conversion occurs. Bondholders would get ANZ shares at a very good price, but other shareholders would probably have a similar buying opportunity as the market price sank towards the bond conversion price. Have ANZ articulated the need to raise more capital outside of their commitment to retain more earnings?

    SNOOPY
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  3. #63
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    Here's a link to the original offer document
    https://www.anz.co.nz/content/dam/an...df?MOD=AJPERES
    25/5/2020 is the optional exchange date, 25/5/2022 is the mandatory conversion date (with conditions).

  4. #64
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    They can repay, or convert on the 25/5/2020. If they don't we change to a floating interest rate, set each quarter until the 25/5/2022, when they look at conversion to shares again. If certain conditions are not met on the 25/5/2022 they then carry on, with the possibility of conversion at any quarterly interest payment period if conditions are met-if not they could end up being possibly perpetually.
    I think I've got that roughly right.
    Will be interesting to see what happens in May.

  5. #65
    Advanced Member BIRMANBOY's Avatar
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    Thanks for that
    Quote Originally Posted by Grimy View Post
    Here's a link to the original offer document
    https://www.anz.co.nz/content/dam/an...df?MOD=AJPERES
    25/5/2020 is the optional exchange date, 25/5/2022 is the mandatory conversion date (with conditions).
    www.dividendyield.co.nz
    Conservative Investing and dividend producers...get rich slowly!
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  6. #66
    Advanced Member BIRMANBOY's Avatar
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    Yes not sure of the benefit (to me) of changing to a new probably much, much lower interest rate but I suppose it would be at least 3%? if the ANZ shares are still low, or lower even would be ok. My guess is we will get what is best for the ANZ so wont be repayment, but could be shares or new interest rate. Selling now may be easier...think I can do better with the funds elsewhere. Thanks.
    Quote Originally Posted by Grimy View Post
    They can repay, or convert on the 25/5/2020. If they don't we change to a floating interest rate, set each quarter until the 25/5/2022, when they look at conversion to shares again. If certain conditions are not met on the 25/5/2022 they then carry on, with the possibility of conversion at any quarterly interest payment period if conditions are met-if not they could end up being possibly perpetually.
    I think I've got that roughly right.
    Will be interesting to see what happens in May.
    www.dividendyield.co.nz
    Conservative Investing and dividend producers...get rich slowly!
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  7. #67
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    I'd be happy with shares, but at present with them sometimes moving a couple of dollars a day (although mostly down) I'd like to have some say over the timing. Cash out is also fine, but selling at about par now might be the sensible option as you say, even with missing the next (final?) interest payment.
    I've got some thinking to do.
    But have certainly been happy with them for their quarterly payments the past 5 years.

  8. #68
    Advanced Member BIRMANBOY's Avatar
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    Yes they have been worthwhile for sure.
    Quote Originally Posted by Grimy View Post
    I'd be happy with shares, but at present with them sometimes moving a couple of dollars a day (although mostly down) I'd like to have some say over the timing. Cash out is also fine, but selling at about par now might be the sensible option as you say, even with missing the next (final?) interest payment.
    I've got some thinking to do.
    But have certainly been happy with them for their quarterly payments the past 5 years.
    www.dividendyield.co.nz
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  9. #69
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    Just checked how they set the interest rate if they carried on with them and we got the floating rate.
    It will be the 3 month bank bill rate + a margin.
    The margin (which they say will not change for the term of the offer) is 3.50%.
    Say the 3 month BBR is 0.75% (who knows what it will be in May), that's 4.25%, which isn't terrible in the current climate. That may be enough to convince ANZ to repay them. Surely they can get money cheaper than that.
    Plus of course they won't want to be seen as not doing what was implied they would at the beginning (I'm sure their intention was to pay out this year).

  10. #70
    Advanced Member BIRMANBOY's Avatar
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    What you say makes perfect sense....I guess the question we should ask ourselves is, are we happy with that or are there other sweeter, better opportunities. At the moment there is a swag of good (and relatively safe and conservative prospects in shares, so for me the desirability of bonds of any type are not particularly compelling.
    Quote Originally Posted by Grimy View Post
    Just checked how they set the interest rate if they carried on with them and we got the floating rate.
    It will be the 3 month bank bill rate + a margin.
    The margin (which they say will not change for the term of the offer) is 3.50%.
    Say the 3 month BBR is 0.75% (who knows what it will be in May), that's 4.25%, which isn't terrible in the current climate. That may be enough to convince ANZ to repay them. Surely they can get money cheaper than that.
    Plus of course they won't want to be seen as not doing what was implied they would at the beginning (I'm sure their intention was to pay out this year).
    www.dividendyield.co.nz
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  11. #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
    Industry shorthand sees BNZ employees still called 'bankers' but ANZ employees now called 'anchors'. Westpac has opted out of banking industry shorthand...

  12. #72
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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
    www.dividendyield.co.nz
    Conservative Investing and dividend producers...get rich slowly!
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  13. #73
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    That you selling this morning BB?

  14. #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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  15. #75
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    Me too.....

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