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  1. #31
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    Interesting time coming shortly for this bond. Next annual reset due 15 November. Mechanism for reset is margin of 1.5% over 1 yr swap. By my calculation the current efective interest rate is 7.7% on paid interest rate 5.26%. For this bond to return 7.7% after next reset a dramatic adjustment would be required to the buy/sell price on NZDX. If I have got my calculations right these are the scenarios.
    If OCR stays at 2.75% and current 1 yr swap 2.7% then interest rate will be 4.2%. The market price on the bond would have to be 55 per 100.
    If the OCR goes to 2.5% - assuming 1 yr swap is 2.45% interest rate becomes 3.95% and market price would be 52 per 100.
    These calulations done purely for estimating maintaining the current effective interest rate when next reset comes into play. Anybody see it any differently.

  2. #32
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    I think most of the coming reset will already be priced in.
    Assuming the reset is at 4.2% and using the current bond price of $68.25 the yield will be about 6.1%. Most IFT bonds are yielding 4.5 to 5% so 6.1% looks pretty good to me.
    Guess it depends on what you think swap rates will do in the future, 3 and 4 year swaps are only a little higher than 1 year.
    I hold a few and will be pretty happy with 6.1%. If they drop to $52 I will be buying a lot.

  3. #33
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    I don't think so. Look at the interactive chart on NZX. Two yrs ago 68 rising to 78 Dec. 2014 and today 68. I'll be flabbergasted if not a big correction
    Last edited by kiwitrev; 09-10-2015 at 03:08 PM. Reason: pasting error

  4. #34
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    Found another chart ASB Sec. fixed interest. During period 2012 to 2013 1 yr swap around 2.45 to 2.5% and IFTHA trading at 52 would suggest to me my calcs approx. correct

  5. #35
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    Company bought some back

    Perpetual Infratil Infrastructure Bonds Buyback

    8:44am, 13 Oct 2015 | BUYBACK

    Infratil Limited advises that it has acquired its own securities. The following information is provided in accordance with Listing Rule 7.12.1:
    Class of security: Perpetual Infratil Infrastructure Bonds
    ISIN: NZIFTD0020S9
    Number of Perpetual Bonds acquired: 1,451,600
    Acquisition Price (average): $0.69
    Payment: In cash
    Amount paid up: Perpetual Infratil Infrastructure Bonds
    Percentage of the total class of securities issued (after the acquisition): 0.62%
    Reason for the acquisition: Considered by the Directors to be in the best interests of the Company and shareholders.

  6. #36
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    Quote Originally Posted by BlackCross View Post
    Company bought some back
    Sneaky - pay 69c and eliminate a $1 liability. Indicates it is unlikely they will ever repurchase at face value.

  7. #37
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    Quote Originally Posted by Harvey Specter View Post
    Sneaky - pay 69c and eliminate a $1 liability. Indicates it is unlikely they will ever repurchase at face value.
    If I remember correctly, they've been doing this for a few years now, off and on. No wonder the price has gone up so much since I bought them. . .

  8. #38
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    Looking ahead a bit to November reset. If OCR goes t0 2% by then new coupon likely to be about 3.5%-currently 4.26%. Buyers and sellers of this bond should pay attention to this fact.

  9. #39
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    I am paying attention to the one year swap rate, that"s what it will be reset on in Mid November.

  10. #40
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    Quote Originally Posted by freddagg View Post
    I am paying attention to the one year swap rate, that"s what it will be reset on in Mid November.
    Of course it is but you will find the OCR and 1yr swap are almost joined at the hip

  11. #41
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    Having bought at about 70 cents it still gives a 5% return at 3.5% coupon, so acceptable to me in the current climate.

  12. #42
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    I have some of these in the bond portfolio for two reasons.

    Firstly as a hedge against inflation. Inflation raises interests rates, which is good for IFTHA. Secondly, the price discount means a better interest rate than the "coupon" rate, which is good for me.

    But I will admit that I haven't bought any since the price went over 6500.

    Oh, and thirdly, Infratil continue to buy them back on-market, which helps provide a little support to the price.
    Last edited by GTM 3442; 27-03-2016 at 05:46 PM.

  13. #43
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    Just checked properly and my average is 64 cents, so almost five and a half % return. Bought a few more today at 66.95.

  14. #44
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    IFTHA down to 60ish along with the outlook for rates, reset upcoming may be to circa 3.5% so effective circa 5.8% at current market value. Still seems attractive but obv the market is risk averse with an ever lower long term outlook for rates.

  15. #45
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    I bought a few more yesterday. I still feel the return is pretty good at current price and probably keeps my average around the 63-64 cent mark. I am getting close to being overweight in IFT bonds in general, but as the fixed term bonds mature I can decide whether to reduce or hold at current portfolio%. I don't think I've finished buying IFTHA just yet...

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