kaya
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Post by kaya on Aug 15, 2018 14:28:27 GMT
Does anyone know what the administration and sale of House of Fraser is likely to mean for loan note holders? Wisealpha?
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rick24
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Post by rick24 on Aug 15, 2018 15:46:44 GMT
I saw a figure of 20% potential recovery in a press report. Perhaps that's why the bonds are now worth 20p in the pound. Rather wish I had sold at an earlier stage! However, it's only a tiny proportion of my overall investments.
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Post by arthgoch on Aug 15, 2018 21:15:35 GMT
Report in the FT intimated something similar with a reduction of capital for both banks and bondholders being estimated at 77%.
Take the rough with the smooth, and as long as you have diversified it could have been worse; i.e. you were a shareholder or were an employer with a HoF pension plan.
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kaya
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Post by kaya on Aug 17, 2018 9:40:38 GMT
Well I rate it as a terrible decision by Wisealpha to buy up a chunk of these bonds and offer them up to us.
So much for bonds being 'safer' than lending to SME's.
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Post by Wisealpha on Aug 17, 2018 10:46:18 GMT
Hi Kaya,
Just picked up your tags - we are still awaiting the details but it looks like the recovery will be +/- 20. The retail industry is asset light versus other industries where you might expect a higher recovery on senior secured debt. They obviously had issues in not being able to adapt to changing conditions in the retail market and with their shareholder support.
We have always said on past discussions that people should expect a few default losses in the corporate space over the medium term because even big companies can be susceptible to transformations in industries, economic conditions and bad management. This is why diversification is such an important consideration.
We're also clear to investors that when making investments their capital is at risk (otherwise it wouldn't be an investment, just free money) and that ultimately it is investor's decision on which listings to invest in and build and manage their portfolios. We are providing access to the asset class with some similarity to how people can pick stocks. That's also part of the interesting thing, so people have the chance to learn and assess which opportunities are going to be rewarding for them and which aren't.
Hopefully it will be a long time till the next....
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macq
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Post by macq on Aug 17, 2018 12:33:44 GMT
with talk of a merger between HOF & Debenhams it may not be such a long wait I am sure i read somewhere over the last couple of months that if HOF had been taken over the bonds may have repaid at a premium but not if in administration.So its no wonder the sale went through in a couple of hours to a major shareholder after that happened but looks like its not going that smooth
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kaya
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Post by kaya on Aug 17, 2018 14:05:03 GMT
...and that might not be all. New Look may be next.
This loss will wipe out anything I've ever made here. But it is a familiar story now, and just like FS and Lendy, I'll be glad to get out roughly even in the end.
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Post by Wisealpha on Aug 17, 2018 15:22:03 GMT
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Post by Proptechfish on May 12, 2019 21:34:26 GMT
Well that assessment was wrong Wisealpha. The Newlook notes are now impaired, as well as Debenhams. They are obviously unsellable, but could you define what 'impaired' actually means ? Should I hold on hope that I may see a 20% return on principle in 2 years. Or should just forget I ever dabbled in Wisealpha. Fortunately I disposed of my other notes a few months back, but a wipe out on the my Newlook holdings would result in a significant overall loss. I liked the look of Wisealpha and thought is was worth a test, but you're now holding nearly £1mil worth of notes in (somewhat amusingly named) 'Special Situations'. My own opinion and feeling in my experience in testing out the Wisealpha platform is maybe there is an over eagerness to float household name offerings over the promises of appropriate due diligence. For me my Wisealpha test is at an end.
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macq
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Post by macq on May 12, 2019 22:03:40 GMT
there's probably a fund manager or Two sitting on the same bonds the difference being while you may not get a 8% yield on an individual note you will get the safety of a spread of bonds within the fund and hopefully somebody at the helm knowing when to buy & sell.Which is why WA even with bigger names is more risky then it looks,but to be fair you would have the same choice to make buying your own bonds on HL etc
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jaswells
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Post by jaswells on May 13, 2019 0:25:11 GMT
The debt for equity swap is now complete. So essentially us bond holders now hold a share of ownership in the company. I wonder how Wisealpha will deal with this. With no open market for this equity it is difficult to establish its value. What options are there? Would be good to hear from Wisealpha in the near future.
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Post by gravitykillz on May 13, 2019 1:35:32 GMT
These issues have resulted in me avoiding all retail investments in my portfolios.
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Post by gravitykillz on May 13, 2019 10:28:32 GMT
Understood. I am now buying up perform bonds as they come on to the market do you think that is a good idea. Also looking at buying 1k worth of metro bank shares if they hit £4.80 any comments?
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Post by gravitykillz on May 13, 2019 10:30:52 GMT
Currently Metro is trading at £5.13
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macq
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Post by macq on May 13, 2019 12:44:38 GMT
"These issues have resulted in me avoiding all retail investments in my portfolios." I think you might be missing an opportunity there. I bought Debenhams to see how WA handled a complex (potentially) defaulting position, because the opportunity of buying "distressed" bonds as part of a strategy looks interesting to me. Especially as it potentially opens the way to being able to bet against, short, the equity, whilst going long on the bonds. That can be an attractive proposition that offers an interesting way of making money off a distressed company and it’s hopeful recovery. Do it right and you might even get to gamble with the “houses” money! Of course there’s the simple opportunity of gaining from any recovery by just holding the bond to redemption, if that ever occurs. In my view, WA is too new a platform to reject anything yet. As it grows and flourishes, I believe all sorts of opportunities could develop for retail investors. But, I would suggest there’s never such a thing as a free lunch, so buying these type of high risk bonds without lots of research and a diversified portfolio might not be a good idea. You might just get burnt. Only have a small amount left in WA so don't check that often but your idea of buying distressed bonds as a strategy is interesting and could even be rewarding(but i assume fund managers will get there first).But it may pay to take into account that you are buying WA notes and not the bonds and unless things have changed i think you are not getting their price not real time market moves in the price - but i could be wrong
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