The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
Why do i own shares when will sell bonds when they get to 90p? Simple, equity shares have unlimited upside and potentially 100% downside. Bonds have limited upside but potentially 100% downside. All comes down to risk/reward, once these get to 90p, I think the risk reward doesn't stack up. Remember to get your money back on these bonds will pretty certainly rely on the company being able to issue new debt. Let's hope oil doesn't crash but still predicting the price of oil in Autumn 2023 is a finger in the air exercise.
Afraid I don't get your logic if you are going to sell the Bonds because of the risk why do you own shares in Enquest as well?
and the market is not a knowing entity it gives a price that reflects demand. I accept there is always risk but at the time the Bonds were issued at £1 with a 5% yield my judgment is it was higher then, than it is now. The Market gave you that risk then for a 5% yield at the moment as you say you are looking at a 20% yield now. We all make our own decisions and It is not my place to judge yours just interested in your logic for all I know it may be right. For me when they trade for 102p I will probably sell as would rather then have a fund for a 5% return
Sorry PRDanes but be careful with statement's like "the Bonds is almost guaranteed to come good now'. The bond has a yield to maturity of getting on for 20%, nobody gives you that with no risk. It looks likelier that they will come good but the market is still telling us that there is around a 20% chance of default. I have been in oil too long to think that a good run with oil means that there are no troubled waters ahead. Enquest is still a very highly leveraged oil company and a significant reduction in oil price could still very quickly wipe equity holders out and leave very little for bondholders, especially as with the latest deal other debtholders will be repaid quite soon before Enquest.
Fair enough 90p could be next week then. I think price has been held back more by not giving holders the temptation to sell and buy into Equity not much temptation of switching from Equity into Bonds at moment.
I was tempted a while back to go all out Equity, but have a good chunk of Equity and sitting on my hands with the Bonds is almost guaranteed to come good now, remember the Equity will always lose out in preference to the Bonds.
I meant if the bond get's to 90p I will still cash out, not if oil gets to $90bbl!
Yes slightly surprising that the bond price has not increased a little more than it has. I suspect some of it is that bond investors probably got caught out in the past, yes oil price is currently doing very nicely, but history tells us that anything can happen.
Remember with bonds you only can get back the face value of a bond, but you can lose everything. Therefore if oil say rises to $150bbl, shareholders may do incredibly, but bondholders will still only get repaid the value of the bond (plus interest of course). If oil crashes to $20bbl then bondholders could still lose the lot.
No idea what oil will do, predicting that is a mugs game, therefore for me I still think if this gets to $90bbl I will cash out and wish holders well.
Cash next time is defiantly on the cards, am surprised at bond price being stuck at the moment.
I am expecting to see your 90p price very soon.
It would make me happy if the next interest payment was in cash. Been a good few years since seen any cash returned from this one and with the PIK's the interest will be about 10% higher than the last one paid. As a reminder for the interest to be paid in cash the average daily closing price of brent has to be $65 or higher in the 6 month period ending a month before the interest is paid. Therefore for the next one the calculation started on January 15th. As the price between January 15th and the end of Feb averaged around $60, the average for the rest of the period will need to average a bit above $65 to bring up the average for the 6 month period above $65. I calculate it to be around $66. Brent is at the time of writing $65.58, so still a little way to go, but cash is very possible.