at least its secured and payments are quarterly .... but the LVR can go to 65% !! I personally think that's high but it is a property company.
I think that's extremely high for a commercial property company and marks this issue out as quite risky. Risk and reward. A major outbreak of Covid could see many commercial property tenants unable to operate and pay their rent. 2.4% might look sort of okay now but what if inflation takes off at some stage in the next 7 years ?
Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.”
Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine
On the other hand if you believe the company is viable, gearing stays manageable and interest rates rise this will see the capital value of the bond drop. Winners will be IPL shareholders who have low interest bills for a year or 3. This isnt a top shelf property company and I dont see much/any premium for risk, if you have a 7 year view and are confident the company wont fall over, at 2.4% the share (paying twice that) might be a better bet.
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