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Waratah Bonds

Joined
24 December 2010
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http://www.smh.com.au/nsw/barry-bonds-to-rebuild-state-20110827-1jfhc.html

I heard on TEN news that the interest rate will be about 4.5%.

Given Ubank offers 6.51%, why on earth would anyone go into this??
 
If they agree that "added security of government-backed debt" versus UBank is worth the 2% difference, then they might choose this.

4.5% I assume is for the life of the bond. Ubank rates are variable.

However, these bonds are only 3 to 10 year maturity so the shorter dated ones will probably trade under par if they are only offering 4.5% in the current rates environment... if they are even tradable.
 
http://www.smh.com.au/nsw/barry-bonds-to-rebuild-state-20110827-1jfhc.html

I heard on TEN news that the interest rate will be about 4.5%.

Given Ubank offers 6.51%, why on earth would anyone go into this??
Its actually a good question. Ubank has the 'government guarantee', so theoretically its as safe as government bonds. Perhaps there could a charitable patriotic element to it, i.e. people want to buy them because they pay for the rebuilding of their state - kind of like why people buy 'war bonds' during wars.
 
Well after Bris connect and Rivercity motorway, there is no way any investor is going to put money into a government/private infrastructure project, not in living memory anyway.
I suppose that is why they are going the government guarantee. Serves them right for being such a#####les.
 
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