garfield
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Post by garfield on Sept 10, 2019 9:50:43 GMT
Yeah... gotta be worth a punt!
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macq
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Post by macq on Sept 10, 2019 10:12:38 GMT
Discussion threads on:
And for good measure, an article from David Stevenson, from early 2018:
If I get chance I'll try and check DS web site, see if he's posted anything more recent. (that's if it's still live)
Not sure if its covered in the links above but people may want to check the repayment methods of PIK toggle notes (which these are) before buying
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garfield
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Post by garfield on Sept 10, 2019 12:21:15 GMT
Not sure if its covered in the links above but people may want to check the repayment methods of PIK toggle notes (which these are) before buying Here's a good explanation:
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macq
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Post by macq on Sept 10, 2019 13:02:55 GMT
Not sure if its covered in the links above but people may want to check the repayment methods of PIK toggle notes (which these are) before buying Here's a good explanation:
Handy link - I believe with these bonds(and then the notes) it depends on the average of the Brent oil price being over $65 over the previous period on what type of payment is made
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Post by kazamx on Sept 10, 2019 17:30:47 GMT
Current price $62.66
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Post by Ace on Sept 10, 2019 18:12:27 GMT
Am I missing something here? Just looked at the price of Enq1 on HL and it seems to be £84.75, giving a yield of about 8.25%.
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macq
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Post by macq on Sept 10, 2019 18:38:55 GMT
Am I missing something here? Just looked at the price of Enq1 on HL and it seems to be £84.75, giving a yield of about 8.25%. Seems about right as WA quote 8.3% on their homepage but 14% YTM
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Post by Ace on Sept 10, 2019 21:06:06 GMT
Am I missing something here? Just looked at the price of Enq1 on HL and it seems to be £84.75, giving a yield of about 8.25%. Seems about right as WA quote 8.3% on their homepage but 14% YTM Oh yes, I was being dumb. Thanks.
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Post by Ace on Sept 10, 2019 21:23:03 GMT
Am I missing something here? Just looked at the price of Enq1 on HL and it seems to be £84.75, giving a yield of about 8.25%. Hi Ace, You have the coupon of 7% (what you would get if you bought them at par 100 (some time illustrated at 100%), for example when they were first issued.
The Yield of 8,25% from HL's site (or as stated on the WA site as 8,3%) if you bought them at 84.75% of par.
And then there's YTM, yield to maturity, if you hold the bonds until (15 Apr 2022), and on the basis that everything goes well, and they pay you back at 100% (of par) of 14,6% How the coupon is payed depends on the average price of Brent Crude. If it's above $65 you get paid in cash, if below in more bonds.
So you could simply hold them and get a return of 14,6% to maturity (if it all goes well), hold them for a period of time and get 8,3% plus/minus any capital appreciation.
If it's your first bond it's one of the more speculative. Not all of them have the PIK element.
The idea in a perfect world being that you could buy today and get 8,3% plus capital appreciaition. That you could realise that profit in '22 or before.
Of course there's the commercial risk associated with the company. The market price of the bonds could also drop and you want to/ need to sell before '22. Hope that helps.
Thanks for detailed reply treetophugger , much appreciated. I did read up on bonds a while back, but never got round to investing. I have some spare cash in a HL SIPP that needs a home. It's tax relief payment, so it feels like free money (I know, it's a poor attitude, but I really wouldn't miss it if it was diminished, or even lost). I'll dig a bit deeper and probably give this a go. At least I won't have to bother with any tax complications on any profit.
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garfield
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Post by garfield on Sept 11, 2019 9:03:41 GMT
Thanks for detailed reply treetophugger , much appreciated. I did read up on bonds a while back, but never got round to investing. I have some spare cash in a HL SIPP that needs a home. It's tax relief payment, so it feels like free money (I know, it's a poor attitude, but I really wouldn't miss it if it was diminished, or even lost). I'll dig a bit deeper and probably give this a go. At least I won't have to bother with any tax complications on any profit. Hi Ace, we run two accounts here. My OH has his in a SIPP and uses Robowise. We are very happy with it, especially as it can pick up notes that can be hard to come by. I have a manual account which I opened first, so I do the research. He still works so doesn't have the time or inclination. It's up to him if there are any bonds he doesn't want, but I also exclude anything above about 110p (depends on yield as well).
I operate my account differently, with more emphasis on potential capital gain.
Hope that helps!
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jlend
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Post by jlend on Sept 12, 2019 15:50:38 GMT
Thanks for detailed reply treetophugger , much appreciated. I did read up on bonds a while back, but never got round to investing. I have some spare cash in a HL SIPP that needs a home. It's tax relief payment, so it feels like free money (I know, it's a poor attitude, but I really wouldn't miss it if it was diminished, or even lost). I'll dig a bit deeper and probably give this a go. At least I won't have to bother with any tax complications on any profit. Hi Ace, we run two accounts here. My OH has his in a SIPP and uses Robowise. We are very happy with it, especially as it can pick up notes that can be hard to come by. I have a manual account which I opened first, so I do the research. He still works so doesn't have the time or inclination. It's up to him if there are any bonds he doesn't want, but I also exclude anything above about 110p (depends on yield as well).
I operate my account differently, with more emphasis on potential capital gain.
Hope that helps!
Although there is no capital gains tax on listed corporate bonds at present, Labour have indicated they are considering introducing it. Worth keeping an eye on it depending on what happens over the next year. I also have quite a bit of potential capital gains in the price of bonds at the moment.
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garfield
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Post by garfield on Sept 12, 2019 21:36:31 GMT
Although there is no capital gains tax on listed corporate bonds at present, Labour have indicated they are considering introducing it. Worth keeping an eye on it depending on what happens over the next year. I also have quite a bit of potential capital gains in the price of bonds at the moment. Thanks jlend. ATM I'm a non-taxpayer apart from my smallish investments in p2p and WA, but I'll keep an eye on things...
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garfield
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Post by garfield on Sept 12, 2019 21:37:45 GMT
This could get tedious!! 
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