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Although it is a long-dated capital bond, Mercury has a history of repayment at the first (5 year) reset date. And they will be listed, so there's no problem getting out of them if needs be.
As mentioned, this time around it isn't for me. Not because of the rate or structure (or ranking) of the bonds, but I need to rebalance with a few more equities this time around.
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Originally Posted by peat
Seems a bit low grade to me.
unsecured subordinated, are not great descriptors despite the former being quite common and the latter usually has an ‘un’ in front of it.
however as Grimy says they are half govt owned and so, just like Air, there’d likely be support in some form or another.
and the rate is okay, though can you commit to a three decade long investment.
strikes me as pretty specialised
Just about all the other bonds ($4b) rank above on liquidation.
Shareholders ($4.8b) rank below
$0.35b other capital bonds have equal ranking to this issue.
It is up to an investor if they think the interest rate margin compensates for their position if there is a liquidation. At least any unpaid interest accumulates.
Last edited by Bjauck; 25-06-2024 at 10:40 AM.
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Junior Member
Originally Posted by Grimy
BB+ is below 'Investment Grade' - probably best to Google it.
However, with Mercury you have a strong company in the utility sector, which is 51% Government owned and hasn't (to my knowledge) ever defaulted.
It's a bond I think you could own and sleep pretty comfortably with.
If it goes ahead, I probably won't apply for the new bonds, but that is no reflection on the bonds or Mercury.
Belated thanks Grimy.
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It's official.
'Mercury is exercising its right to fully redeem the MCY020 Bonds, in accordance with the Trust Deed on the first reset date, 11 July 2024'.
The new bonds interest rate is set at 6.42%. The bonds will be issued on July 11, and the first reset date is July 11, 2029.
Last edited by Grimy; 27-06-2024 at 07:18 PM.
Reason: Extra detail
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