OCA - Oceania Group - retirement villages

[Aaron]

Hey bottom. How do you buy these bonds. Cant do it through ASB share trader?

If you mean ASB securities online then I think Bottomfeeder is looking at the OCA010 19/10/2027 2.3%.

Search OCA and click on OCA010 and it shows buy price and I may be wrong but the buy price represents the yield so you will be paying something less than a $1 for the bond to come to a 7.2% yield to maturity.

Regret trying to be helpful now, as I have not done this myself, clicked on buy and it came up with an 0800 number. I do not know the bond maths but I assume you tell ASB how much you want to pay and they will work out how many bonds you can get. Be interested to hear how you get on.

I recall an interesting discussion re buying bonds on the secondary market but cannot remember the thread, needless to say there were traps for newbies that I never considered such as the timing of cashflows. Most of the 7.2% arrives when the bond matures.

[Leemsip]

Thanks Aaron. Appreciate it

[Leemsip]

Ah so I did find out, called ASB.

You need to call them on the 0800 number, give them the yield you want to buy at and the amount and they will register it as a buy and it waits to get filled.

Suggested going onto the NZX site to look at all the bonds available.

[winner69]

OCA bonds up to 7.23 percent.

That 7.23% higher than ARV at 6.8% and RYM and SUM down in 6.20%/6.30% level

Oceania seen as 'riskiest' of the four?

Seems to be the case

[Leemsip]

Seems like a decent investment... presume the only case this doesnt pay out is if the company rolls over bankrupt.

[RGR367]

Seems like a decent investment... presume the only case this doesnt pay out is if the company rolls over bankrupt.

Worry not about the bond. Just keep on accumulating on your OCA shares.

[ValueNZ]

Worry not about the bond. Just keep on accumulating on your OCA shares.

Yep, 7.2% p.a becomes a real return of 0% p.a after you adjust for the current inflation rate... If you believe in OCA as a company you'd realise there are much better returns to be had purchasing the stock since its currently trading at a discounted rate.

[Aaron]

Seems like a decent investment... presume the only case this doesnt pay out is if the company rolls over bankrupt.

If they get into financial difficulty, I assume they would cut dividends first then do a cash raise from shareholders who need to join in (usually at a discount) or get their shareholding diluted I think when times are desperate they can even offer large institutional investors great deals at the expense of small shareholders.

If the worst happens at least bond holders are ahead of shareholders in the queue in the winding up. (Then we would see how relevant NTA is.)

I did read that financial markets are able to look through any potential problems such as recession and see a good long term result.

Also if I understand this correctly other investors were suggesting bonds are good at these yields as at 7.23% you maintain purchasing power and if the faeces hits the fan central banks will drop interest rates and you will get a capital gain on your bond if you resell on the secondary market to buy the even cheaper shares.

Just a thought based on what I have read. Not acting on this though, although it sounds plausible.

[justakiwi]

If any of you genuinely believe there is a rats arse chance of OCA (or any of these four providers) "winding up" - you need your heads read.

[CD_CHCH]

If any of you genuinely believe there is a rats arse chance of OCA (or any of these four providers) "winding up" - you need your heads read.

Never say never...


While I personally believe it is unlikely that OCA will fail (or wind up) history shows there are many companies that people thought wouldn't "wind-up" that no longer exist:


Blockbuster
Enron
Pan-Am
TOYS R US
Borders
Compaq
Holden


Or for some closer to home examples of brands that vanished:


3 Guys
Big Fresh
D.I.C. (department store)
DEKA (New Zealand)
Haywrights
Hill and Stewart
Kirkcaldie & Stains
Woolworths