Z Energy Bonds 15 August 2018

[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.

[Beagle]

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 ?

[Anonymous]

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

[BIRMANBOY]

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.

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.

[Penfold]

Suppose it depends on your time frame. If you are looking at holding the Z bonds until maturity you may be better looking at perpetuals. Especially those that are likely to be bought back. But if you are only in it for the year or two then maybe the Z bonds will serve you well. Any sudden rise in OCR could lead to you taking a capital loss on them.

[Waiuta]

Practically, they are fixed rate senior bonds and should be easily tradeable. Greenstone (their earlier issue) opened in October last year at 7.35% and now trade at a yield around 6.6%

[Arbitrage]

The market seems to be huge for these. ASB Securities limited them to 5000 per client. Hopefully the high demand will make them easily tradeable.