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Hybrid Securities

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Re: Hybrid Securities GNSPA

jbl,
Good post and good info.
I'm about the same as you ie researching learning, esp cumulative, perpetual, step up/maturity etc.
I also hold BEPPA as a gamble.
At the moment i'm a bit 'time poor' but I've been looking at a couple of your choices; SAKHA DEXUS and RHCPA for the last fortnight or so. SAKHA will probably be my first move.
I was looking at SEVPC but have gone off it.
I'm also probably going to have 'speculator' on GNSPA........thoughts on that one? There's a good thread on it over at HC

One question that really interests me is Where's all the info???
I've got the afr tables, macquarie codi tables, article in the bull.com and have trawled through some good articles in intelligentinvestor.com and of couse the asx site for prospectuses.....BUT do you know of any site or newsletter dedicated to interest rate securities??
I'd love to find one for some 'expert' opinion/background etc.

Good luck jb, I'll keep you posted on what I end up with.
 
Re: Hybrid Securities GNSPA

another question

is there an easy way to find out if the dividends are franked?

info not obvious on ASX, dividend announcement or initial notes, commsec, in the case of DXRPA, AQNHA, BEPPA, anyway.

The only other place I can think would be the full initial PDS, not always easy to locate.
 
Re: Hybrid Securities GNSPA

Warren and others,
Sorry about the slow reply (time poor / kids etc).
I have read the Intelligent Investor stuff and other articles that bob up on hybrids but haven't found any regular newsletters that deal specifically with this area. To be honest I think if you are serious you need to read the original prospectus as there are subtle differences in the terms of all hybrids. I'll have a look at GNSPA and let you know what I think.
 
Re: Hybrid Securities GNSPA

I have been having a look at some Hybrids, and agree that it is neccesary to closely study the conditions that apply to each one, as they are different.

Its very hard to find the original PDS in the Company announcements, as the issue goes back years in some cases.

Is there any way to find the PDS more easily?

or to find out such things as reset conditions?

I did find the attached summary

http://www.fixedincome.com.au/docs/pdf/Hybrid Summary and Pricing.pdf
 
Re: Hybrid Securities GNSPA

Hi everyone, just an example to bring up on interest-bearing securities. I wrote earlier about STOPB (Santos Fuels), now Santos has said they will buy back all FUELS at face value of $100 per share. This will happen in Sept 2009.

If you bought STOPB last week for $92 and then were lucky enough to receive this good news this week then you know for sure you got 8% capital growth the plus the divi on the way.

Unfortunately I was not set..............

You can win very easily on these if the luck is your way, cheers.
 
Re: Hybrid Securities GNSPA

Bill M said:
You can win very easily on these if the luck is your way, cheers.
Click to expand...

My favourite is IANG reset exchangeable securities issued by the insurance company IAG. Their first exchange date is 15 March 2010, when it is expected they will be redeemed. They are presently trading at $68.
 
Re: Hybrid Securities GNSPA

Calliope said:
My favourite is IANG reset exchangeable securities issued by the insurance company IAG. Their first exchange date is 15 March 2010, when it is expected they will be redeemed. They are presently trading at $68.
Click to expand...

I had a good look at these Calliope. They can be exchanged for preference shares at anytime. If that happens then a step up interest rate of 1% will apply. Then the rate is only 2.2% above the bank bill swap rate. During these current times the spreads are between 4 and 5%. What this is telling me is that it is quite likely they may not get redeemed because even after after the step up, the borrowing of your money for around 5.4% is pretty cheap for a company like IAG. They could in the future also exchange all the preference shares for ordinary IAG shares. So the reason the price is so low is that they might not get bought back or they might get converted into IAG shares. Of course you could get lucky and IAG might just redeem them all at face value but it seems unlikely, I could be totally wrong though.

The worst case for this stock is that it won't get bought back and your current running yield is around 6.4% which will go up to 7.4% if it steps up that 1%, good luck.
 
Re: Hybrid Securities GNSPA

hi Bill. if u chose to convert them to preference share, would you get $100 dollars worth or the current value(approx $68)?
 
Re: Hybrid Securities GNSPA

I suppose you would Nathan, not sure but if you did then you get $100 worth of prefs for $68 outlay but they wouldn't buy them back if they did that, you would have to wait, pick up the 7.4% on outlay I guess.

By the way I read an article in the Eureka Report that said that IANG was highly likely to get redeemed. It then went on to say the main risk was that if IAG experienced a significant rise in claims then it will be forced to convert the resets into preference shares and they won't be redeemed, that is the gamble we are faced with.
 
Re: Hybrid Securities GNSPA

By the way guys I think this site has a lot of info on Fixed Interest Securities, don't know if it was mentioned earlier, cheers.

http://www.fixedincome.com.au/
 
Re: Hybrid Securities GNSPA


FixedIncome said more or less the same thing in their Hybrid update yesterday.
 
Re: Hybrid Securities GNSPA


i was thinking more along the lines of:
1. convert $68 worth of hybrids into $100 worth of preference shares
2. sell preference shares on market.

thanks for the new link, will look at it now
 
Re: IANG

Had a look at these. You don't get $100 worth of preference shares for one IANG. You get 1 preference share face value $100 for 1 IANG that has face value $100. Refer Disclosure Document in asx announcement dated 29/11/2004.

If IAG exercises its Exchange Right, each RES (which is an IANG) will be Exchanged for one Preference Share. That Preference Share will have an issue price equal to the Redemption Amount on the Realisation Date. This made me nervous as I would hate to get stuck with preference shares.

I have looked at these and feel I need to understand better as to how likely they are to convert to preference shares or simply redeem. One advantage of redeeming is that they already have the cash as IANGs are secured by a liquid cash portfolio.
 
Re: IANG

I had a read at IANG's prospectus as well and find it really confusing. I might got it wrong, my understanding is that IAG can convert IANG to IAG's preference shares anytime, and the initial margin for the new IAG preference shares will be the same as IANG's interest margin at the time of conversion. IANG doesn't have a step-up date, but the new IAG preference share step up date is ten years from the conversion date. So if IAG decides to convert it in the next few months before the reset date, then the initial margin will be 1.2% for ten years? (In the prospectus it said the margin for preference shares is "same as RES margin at preference share issue date"). If this is the case, I don't see why IAG will redeem IANG in this environment. I don't have full access to any analyst's report about IANG, especially at fixedincome for the explanation in term of why they think IAG is highly likely to redeem it? I guess the interesting bit is why didn't IAG convert IANG a few months back but rather do a placement/SPP to raise money?
 
Re: Hybrid Securities GNSPA

Have started looking into these as well, just a question, who do you guys trade these with? and is traded on margin or full capital?

Cheers
 
Re: Hybrid Securities GNSPA

NAsX, these are just listed securities with their own ASX codes and can be cought and sold like any other share.
 
MXUPA and fixedincome.com.au

Bill M - thx for highlighting fixedincome.com.au - I have signed up (it is free) and find their research helpful. (Check out their research on MXUPA and IANG).

Very interested in MXUPA which are Multiplex Sites. Multiplex was taken over by Brookfield Asset Management a listed Canadian property and funds manager who are very strong financially. MXUPA is the only listed entity they have (pain in the neck for them?)

I listened to the conference calls they recently held for investors.

The bottom line is that they are trading between $37.00 to $39.00 for $100 face value and April 2010 step up to bills + 3.9% which will give them a yield circa 20% with 3:1 leverage for any rate rises.

Intelligent Investor dismissed MXUPA because they were concerned that because distributions were non cumulative and the responsible entity was no longer listed that there was nothing compelling directors to make distributions (i.e. the normal stick is you can't pay dividends and this situation no longer existed) but imo this is not the case and they have made all distributions since take over and were very reassuring in their comments to investors. Interesting punt with a really nice yield if you park your money with prospect of as serious capital gain if they are redeemed as credit markets continue to free up.

It was a coincidence but Brookfield also had some press today in the Prime Space section of The Australian and they were very bullish about acquiring assets etc.

Am interested in other's thoughts.
 
Re: Hybrid Securities GNSPA

I am heavily into hybrid securities and maintain a spreadsheet of their details, prices and returns. Hybrid dividend rates are usually tied to 90 day Bank Bill, 180 day BB or 5 year swap rates.
I was getting these rates from an excellent table on a NAB web page but NAB have changed their web site and this page seems to be no longer available. NAB are not replying to my emails on the subject.
Does anyone know where I can obtain this information on the Internet?
 
Re: Hybrid Securities GNSPA

My portfolio is primarily made up of preferred paper. I've been looking for info / tables / data / stock codes / anything for similar securities such as conv notes, floating rate notes, hybrids and the like for overseas exchanges.
My sum total thus far is a blank page for tradeable securities.
Not sure what they are called and where they are listed.
I've found a few, however they are just prospectus's on securities that aren't listed.
Anyone have any links, tips or help that would like to give?
 
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