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  1. #51
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    The answer is simple-Never. However like you i'm surprised by current move in price given the next reset in the interest rate later this year will likely be less than currently being paid which is 3.63%. Mechanism for reset is 1.5% plus 1yr swap currently at about 2%, maybe marginally higher. Delicate balance between low interest rate environment and maybe some inflation?? to come given USA signalling rate increases December and beyond.

  2. #52
    Legend peat's Avatar
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    Quote Originally Posted by Xerof View Post
    What's with the sudden increase in price and volume? Surely Tim Brown's not thinking of doing the unthinkable....
    Did you spot the gartley ?
    For clarity, nothing I say is advice....

  3. #53
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    Quote Originally Posted by Xerof View Post
    What's with the sudden increase in price and volume? Surely Tim Brown's not thinking of doing the unthinkable....
    Likely the money from the upcoming RBOHA repayment looking for a new home.
    ASBPA and ASBPB are up as well

  4. #54
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    Quote Originally Posted by freddagg View Post
    Likely the money from the upcoming RBOHA repayment looking for a new home.
    ASBPA and ASBPB are up as well
    As are all the other fixed income entities on my watchlist, so a sector move.

  5. #55
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    Quote Originally Posted by kiwitrev View Post
    As are all the other fixed income entities on my watchlist, so a sector move.
    Reserve Bank signalling benign inflation and no imminent rate increases so would appear to be contradictory to recent expectation in bond market and increased cost to buy on NZDX. IFTHA now on new 1yr cycle coupon 3.5% but 1yr swap today 1.99% indicates a downward trend.

  6. #56
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    Anyone know what happens if the 1yr swap rate goes negative at reset time in November?

    Will the coupon stay fixed at 1.5% or could a negative swap rate exist of say -0.5% plus 1.5% thus giving a coupon of 1%?

  7. #57
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    I've just had a look at the IFTHA Information Flyer. Nothing mentioned apart from the 1.5% margin. So I'm guessing if interest rates went to negative then the margin would be on top of that as in your example.
    Some later issues have stated that an interest rate will not go below a certain % value. But certainly can't find anything like that for the IFTHA bonds.

  8. #58
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    Thanks Grimy, guess we will know in November. 1yr swap rates hit 0.18% last week.

  9. #59
    Ignorant. Just ignorant.
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    I suspect that few people here bought these at issue, or at anything much over 60c in the dollar, so even on it's own, that 1.5% margin isn't looking too shabby.

  10. #60
    Senior Member
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    Jun 2008
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    1yr swap currently at 0.13%.

    If it drops below -1.5%, will holders have to pay Infratil?

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