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Z Energy Bonds 15 August 2018
Type of Bond: Secured, senior, fixed rate, listed debt obligations of the Issuer.
Closing Date: 5 August 2011
Interest rate 7.25% p.a.
Interest Payment Dates: 15 February, 15 May, 15 August and 15 November of each year until and including the Maturity Date (commencing on 15 August 2011)
Maturity Date: 15 August 2018
Bonds rank equally with the bonds already issued by Greenstone Energy Finance Limited (in respect of which Z Energy Limited became the substituted issuer)
Ranking: The Bonds will constitute secured senior obligations of the Issuer and rank equally with each other and the existing Series of bonds issued by the Issuer. Bondholders and Z Energy Group’s banks share the same security on an equal ranking basis, with both groups ranking behind Shell’s security over petroleum products supplied by Shell to the extent that it has not received payment of the purchase price for them, and behind statutorily preferred creditors.
NZX ticker code “ZEL” has been reserved for the Issuer.
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what do we think of this rate/risk.
I only have very big picture opinion, not much depth of knowledge about bonds.
Infratil bonds (closed May2011) were 8.5%
Z Energy bonds are 7.25%
I don't see much risk in the failure of petrol station business.
I see the biggest risk over Z Energy as a gradual move away from petrol stations when oil runs out (10 or 30 years away?). Maybe petrol stations will become electric car plug-in points, or Hydrogen fuel cell outlets, or just new new "corner dairies", but if cars disappear and everyone uses electric buses or monorails (or bicycles), petrol stations will suffer the same problem that Bookshops are suffering in the face of internet books.
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Tobo,
A risk is inflation..
http://www.nzherald.co.nz/personal-i...0631651&pnum=0
@ a real rate of return of 3.55% i doubt i am being adequately compensated..
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Originally Posted by tobo
I see the biggest risk over Z Energy as a gradual move away from petrol stations when oil runs out (10 or 30 years away?).
They don't make much on the sale of petrol. Its the high margin pies, milk and considerable where they make their loot. It might have been Shell, or was it Mobil who had a requirement of staff to up sell "would you like a cadbury Peanut slab with that purchase"
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Originally Posted by minimoke
They don't make much on the sale of petrol. Its the high margin pies, milk and considerable where they make their loot. It might have been Shell, or was it Mobil who had a requirement of staff to up sell "would you like a cadbury Peanut slab with that purchase"
true but without the petrol to get you in there, there is no chance of the upsell.
Another risk, given your line of thinking is payment at the pump with NFC (near feild communication - ie. swipe cards). Some stations do this at the moment but implement it so badly (intentionally??) that no one uses it. If tap and go payment becomes simple and ubiquous, then that is a significant risk of them loosing the impulse purchase.
Last edited by CJ; 12-07-2011 at 12:04 PM.
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Member
Originally Posted by CJ
Another risk, given your line of thinking is payment at the pump with NFC (near feild communication - ie. swipe cards). Some stations do this at the moment but implement it so badly (intentionally??) that no one uses it. If tap and go payment becomes simple and ubiquous, then that is a significant risk of them loosing the impulse purchase.
NFC going forward will be through smartphones. Maybe that is the true reason that petrol stations don't want you using your phone at the pump...
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I am cautious of buying fixed rate bonds at historically low levels, with the possibility of inflation going wild. There's a few perpetuals that reset annually out there, that I would be looking at first.
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Originally Posted by Penfold
I am cautious of buying fixed rate bonds at historically low levels, with the possibility of inflation going wild. There's a few perpetuals that reset annually out there, that I would be looking at first.
I agree. Turn the situation around, I'd be happy to borrow at 7.25% locked in for 7 years so why lend to them at that rate ? I also don't like how Z energy are almost always continually leading the market when it comes to their repeitive fuel price rises. Anyone else noticed that ? Infratil "playing us" by taking advantage of playing the Kiwi Owned" card ?
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Most of the perpetuals will be resetting with lower interest rates so doubt whether that would be worthwhile. If they reset annually then it will be certainly lower than last reset. Its Z energy (7.25%) still better than term deposits whatever you do.
Originally Posted by Penfold
I am cautious of buying fixed rate bonds at historically low levels, with the possibility of inflation going wild. There's a few perpetuals that reset annually out there, that I would be looking at first.
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Member
Originally Posted by Roger
I also don't like how Z energy are almost always continually leading the market when it comes to their repeitive fuel price rises. Anyone else noticed that ?
I note that Z Energy hasn't increased today unlike the others. http://www.nzherald.co.nz/nz/news/ar...ectid=10738156
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