IFTHA Infratil Perpetuals

[huxley]

The rate reset occurred in November, before the 75 bsp increase though, it won’t move again till November 2023, so in the short term at least the rate looks less attractive.

[GTM 3442]

The rate reset occurred in November, before the 75 bsp increase though, it won’t move again till November 2023, so in the short term at least the rate looks less attractive.

Part of the attraction is the entry price. I suspect that there are a few on this forum whose effective IFTHA interest rate is in double figures.

[Grimy]

A little info. on IFTHA and IFTHC in today's Chris Lee & Partners newsletter; (Market News 28th November-look on their web site).

[Nor]

interesting bit in Chris lee commentary yesterday 8th october
https://www.chrislee.co.nz/taking-stock

Very interesting blogsite if thats a word. Apparently 2027/2028 maturities are over abundant which may explain selling pressure, investors wanting to have a better maturity spread.

[huxley]

That Chris Lee blog post was a lot of nonsense, arguing that default funds (which are retirement savings vehicles) should have stayed in cash and bond focused investment strategies because of short term market conditions is such a stupid position to take. Passive strategies have a tendency to beat active, you only need to look at Buffett's bet with the hedge funds.

[GTM 3442]

Over the past year or so it's been interesting to see the New Zealand Financial Services Industry, and the investing public, respond to an environment of rising interest rates after more than a decade of static and/or falling interest rates.

There's even been the first faint stirrings of an understanding that there's more to Fixed Interest investing than simply the coupon rate.

Hopefully both groups have learned something and that they will be better placed to understand and cope with future changes.

[Grimy]

Today my IFTHC bond payment came through and they are now paying 7.89%, so happy enough with that.

[causecelebre]

Can I ask, as i'm simply learning about perp bonds, is the fall in the price IFTHA a result of the market perceiving rate drops next time it resets?

[Newman]

Can I ask, as i'm simply learning about perp bonds, is the fall in the price IFTHA a result of the market perceiving rate drops next time it resets?

The rate will be determined on November 15 at 1-yr SWAP + 1.5%. As OCR would be at its peak in the winter, many would believe the 1-yr SWAP rate would drop soon.

[FTG]

And.....IFTHA recently went XI, so pricing adjusts accordingly.