Works Finance (NZ) Limited (WKS) Bonds

[kiwitrev]

Couta
I'm not clever enough to notice those type of movements. Don't think under par buying can last much longer given this bond's rising future yield. However have had to liquidate part of my holding to finance SPP in WHS (max. times two - Mr & Mrs) as am comfortable in medium/longer term on this stock. Am happy to pick up more WKSHA as funds allow.

[Lizard]

Reset coming up in a few weeks time. If we stay on current 1 yr swap of 3.67%, we will see it set around 7.75% for the next year.

Trading above par now though ($1.025).

[couta1]

Reset coming up in a few weeks time. If we stay on current 1 yr swap of 3.67%, we will see it set around 7.75% for the next year.

Trading above par now though ($1.025).

Good medium to long term hold with a company that keeps winning significant contracts and stacking up its forward workload.

[kiwitrev]

The reason they are as much above par is because on next div. due date (15 June) you will get the qtr div if owning the bond by 6 June thereby getting most of the premium back.

[couta1]

Rate reset to 7.95% for the year with dividends fully imputed, looking forward may be near 9% next year.

[lambton]

Rate reset to 7.95% for the year with dividends fully imputed, looking forward may be near 9% next year.

Finally. It has been a long road waiting for interest rates to return to an upward cycle.

[Lizard]

Rate reset to 7.95% for the year with dividends fully imputed, looking forward may be near 9% next year.

I guess the biggest risk around this is that they will be re-purchased at $1 each or exchanged for shares in Downer (2.5% discount) on some future dividend payment date? At least that is the way I read the prospectus (pages 37 & 50).

As interest rates rise, they would surely have to think about doing so??

[macduffy]

Yes, that's how I read it, Lizard. As with all these redeemable/convertible instruments the terms are heavily in favour of the issuer.

In retrospect, I guess we were always going to be on a hiding to very little by investing in them.

[BIRMANBOY]

To buy them back they have to come up with cash which is probably difficult for most companies since they tend to have their capital working not sitting. Also as rates rise not only do they pay out more but also it would cost them more to borrow so not so clear cut. If they were on to it they would have been buying them back on market when they were selling at a discount...however I don't recall any notification of this happening. However since I was fortunate to get in at 7210 its an excellent return on my capital. I haven't read the prospectus (lazy boy) but conversion to Downer shares would be possibility if I had to hazard a guess. I can see it running a while yet though. All depends on other finance options available globally.

I guess the biggest risk around this is that they will be re-purchased at $1 each or exchanged for shares in Downer (2.5% discount) on some future dividend payment date? At least that is the way I read the prospectus (pages 37 & 50).

As interest rates rise, they would surely have to think about doing so??

[kiwitrev]

New dividend rate from 30 June is 7.21% fully imputed. Pretty competitive in current low interest environment. Bought more during the year so happy with that decision.