Listed Property Trusts

[COLIN]

quote:Originally posted by nelehdine

The APTGB's convert to Ords on the 30/06/07 ... compulsory conversion to Ords.

The conversion price is 92c ... so for every APTGB you own ( remember the APTGB's are effectively a bond with a $1 face value and 8.50% coupon on that face value ) you get to swap it to APT ords at 92c. So another way of putting it is that for my $1 APTGB I get the following equation.

1 / 0.92 = 1.087

So, I bought 5000 APTGB's at $1.29 , I then sold 5000 APT's which I own at the same $1.29 price.

On the 30th June my 5000 APTGB's will convert to 5,434 Ords and for the cost of the brokerage hey presto I have 434 "free" APT's. At today's price of $1.36 that is $590.

I have done this on a total of 25,000 APTGB's so far so will receive 2,170 free APT's in June ... all risk free !!!! )

Thanks for pointing out this arbitrage opportunity, Enid. I managed a series of similar deals, over the past week or so, i.e. swapped 25,000 APT for 25,000 APTGB, all at 130. It took quite a bit of patience but we got there in the end.
I owe you one!

[nelehdine]

Well done Colin, sometimes the market just offers opportunities that are so good you have to wonder if you " have missed something " ... nobody has yet pointed out any flaws in the APT vs APTGB strategy so I'm sure you have done well.

Bit of a pullback in APT,KIP and PFI the last ten days ... PFI esp looking good value.

[COLIN]

quote:Originally posted by nelehdine

Well done Colin, sometimes the market just offers opportunities that are so good you have to wonder if you " have missed something " ... nobody has yet pointed out any flaws in the APT vs APTGB strategy so I'm sure you have done well.

Bit of a pullback in APT,KIP and PFI the last ten days ... PFI esp looking good value.

To put your mind at ease: I specifically checked with the Trust who advised that our understanding is correct, i.e. based on current prices we will receive 1,087 APT for every 1,000 APTGB. (I found the wording in the Note to their Accounts a little confusing when it talks of conversion on a "dollar-for-dollar" basis).
When the MCN's were issued (at $1) the share price was closer to 90 cents, so the conversion rate was understandable. I guess the market in general hasn't caught up with the fact that once the share price climbed above 92 cents the "premium" kicked in.

[nelehdine]

Well done, can't beat "the horses mouth" for your info.

[COLIN]

And I see that the opportunity is still there today, but I have run out of APT to swap into the notes, unfortunately.

[zyreon]

this (among other situations) is where short selling would be useful

[nelehdine]

Stock market crash ... what stock market crash

28.02.07 APT +1 138
01.03.07 APT +1 139

Disc: Will hold 101,625 APT's ( after converting from APTGB's )

[Keitaro]

I'm just reading through this thread and in particular
the strategy around selling out of APT and buying into
APTGA. Is there anything to stop APT from issuing new
units to existing unitholders or the market in general
at a significant discount to market price?

Just thinking that if that happens, the market price of
the unit will thereotically fall and make this strategy
less attractive?

[Major von Tempsky]

So, when is NAP getting added to the list?
Its had its compulsory bath under St Laurence which was a neat trick by St L to maximise its holding and control and - surprise! surprise! its now bouncing back after St L has found things are not nearly as bad as they said they were before they maximised their holding.
In prospect maybe NAP is the cheapest on the market particularly given that St L is a NZer and therefore easy game for the big Aussie unit trusts....just a matter of time before it gets noticed and the Aussie predators move in...

[Tim]

Are property trusts now fully valued? Are these an alternative to fixed interest??