SUM - Summerset Group

[macduffy]

Just spoke to my broker he thinks 4.5 to 4.7%.
Would you expect the shares to perform better than this anyone?

In terms of gross div yield plus capital appreciation - yes.

[mcdongle]

In terms of gross div yield plus capital appreciation - yes.

Yes think i will give the bonds a miss and watch the shares..

[Elles]

Similar position. Only problem with that approach is that we probably need to commit the money before we know about the interest rate. Sounds like they are going through an institutional book building process. Yes, 6.5% would be sweet, but not sure we get there. Listed IFT bonds (probably similar security) are currently traded around 5.6 - 5.7%;

From the announcement:

Opening Date: 15 June 2017

Closing Date: 5pm, 6 July 2017

Interest Rate: The Interest Rate will be set and announced via NZX on

Wednesday, 14 June 2017.

So we'll know the interest rate before it opens.

[couta1]

According to the Herald article this morning, house values up 9.7% Nationwide on average over the last year and a normalising of Auckland values (Not a bad thing) I see nothing concrete that will have any affect on SUM's continued growth or an elderly persons ability to sell their house and move into a retirement unit. Buy the shares cheap while Mr Market continues to throw a hissy fit.

[BlackPeter]

From the announcement:

Opening Date: 15 June 2017

Closing Date: 5pm, 6 July 2017

Interest Rate: The Interest Rate will be set and announced via NZX on

Wednesday, 14 June 2017.

So we'll know the interest rate before it opens.

You are right - my bad.

[winner69]

Bonds lower cost of capital than equity

That's good

[Beagle]

According to the Herald article this morning, house values up 9.7% Nationwide on average over the last year and a normalising of Auckland values (Not a bad thing) I see nothing concrete that will have any affect on SUM's continued growth or an elderly persons ability to sell their house and move into a retirement unit. Buy the shares cheap while Mr Market continues to throw a hissy fit.

Agree 100%. Some people have forgotten that of SUM"s present 21 villages only 4 are in Auckland. East Auckland house prices which even I admit are outrageous fell a "whopping" 1.1% in recent months while other parts of Auckland's market are still increasing...anything but a dramatic downturn I would have thought especially at a National level. I noted in the Government budget the other day that Treasury is still expecting national house price growth of over 7% in the year ahead ! I will start adding to my position shortly if the price continues to decline as the long term the demographic tailwinds make this well managed company trading on its lowest ever forward PE, (even lower than the market forward PE average), a most compelling long term investment proposition.

[macduffy]

I agree with all of that, Roger. Now, let's just drop the subject before we set off a premature buying surge in SUM shares!

[Joshuatree]

We've already had that

I have been feeling very bearish lately about the global situ hence my cautious thinking about SUM . Hope I'm wrong about the above and thanks for all the info and opinions guys. I do remain well placed on the side watching the Macro situ and SUM.

[Bjauck]

Just spoke to my broker he thinks 4.5 to 4.7%.
Would you expect the shares to perform better than this anyone?

On reflection, I think the likely interest rate for the bonds will probably not tempt me to buy them rather than increase my shareholding. I think the bond issue at the likely interest rate is a good move and increases the appeal to top up my shareholding.