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So I've got copy of the £500,000,000 Euro Medium Term Note Programme, but not the energy to flick through it. It look as if i picked them up with a YTM of 12% and then again at 14%, LSE are quoting today c50%
That's must be the figure that stuck in my mind.
Not my most glorious moment LOL
I thougt there had been a revision to that coupon, but I don't hold them in any meaningful way. I hold a very small amount of them. I know from memory they aren't senior. I'll try and have a look in a second.
Enquest PIK is currently 7% but they are subordinate debt so didn't have the same clout as Premier senior. I think there is only $400m of Enquest senior debt to be repaid so PIK holders will have a lot more power in the next round of negotiations!
Hi Romaron, just on general note, I don't know why investors don't look at the tradeable debt. If not as an investment vehicle, then as a indicator.
I thought I always put YTM in the mix, rather than saying profit, but hey, it's a busy day. I calculated c50%, but we both know that it's distressed. Even if some dont want to see anything but a bet on big T and the price of oil.
I always to do my own calculations, but you know when it's busy a source may have to do!
I've never held the equity short or long, and the bonds a short term. It looks like we are both in agreement they are junk LOL
At this point, I don't share Happy's view of the end of the world, but I do think there might be more coming down the track for both parts of the cap table. In terms of the "ounces of flesh" I think there a reasonable chance there's going to be more cut than the initial agreement indicated and I'm not sure there's going to be a deal. But as you say, my expectations change on a daily basis, there's just so much going on. I think technically, the stock is still called 5% 2021, so they are correct in using the title, even if the coupon changes they don't always change the title - which can be confusing.
As far the usefulness of YTM, it's usually they way that fixed interest investors look at the price of a bond. I prefer to think in those terms, others I know are much more interested in the yield.
We are alll kicking our heals at the moment, it's got to be imminent. I can't see they can delay an update with all that's going on.
I was trying to remember the new coupon on the Enquest PiK, I seem to remember it was 12%, I'm just not sure if ther revised terms here are rich enough. I guess, we'll all know in a day or so.
Hi devonplay - I only posted because some people may have read it as an investment return of 68% which you suggested. If I bought £10 worth of bonds for £6.8 and they reached maturity without any haircuts or the like I would receive £10k plus interest of c.£433 (6.5 divided by 12x8). Still high but more like a 53% return. YTM is a bit like APR and uses annual rates for a picture. It is useful to traders more than investors but for some it is a good indicator. Thank you for pointing out that the bond is junk debt. I never would have guessed.
I don't trust the LSE site and the wrong coupon is indicative. Information that costs nothing often has the same value as do most posts on a message board. Like the share price I treat them as snap shots and both are often wrong. We should know something more concrete shortly. I only have a modest interest in the share price but with the refinancing ongoing there is sure to be manipulation in the trading of debt and much is in the hands of those who trade in these scenarios. It is encouraging and discouraging depending on my mood. PMO will survive but unsure of how many ounces of flesh the debt-holders can get away with.
Fair enough, so messy atm, US election, covid, all having a massive effect demand drying up now, stimulus wearing off, could be a break winter for the longs, cant see poo and demand picking up until spring min tbh, vaccine is needed to get global growth back to where it was, I bet your cats hiding ) seen HMSO dip a few times now
Still waiting for timing here to go short again, cant be long now, order of play looks clear to me, ARCM just being a pain, love their history with PMO lol
Creditors are driving the renegotiations with BP.
All will be fine.
i've been out since i last posted sausage. i'm just looking at the damage. i see oil is heading to the targets i posted. $39 gone. next $38
Your basicaly buying the future cash flow, the coupon, and the market difference between the price and the future redemption price (par).
"I'm not splitting hairs only questioning how you could invest today and earn 68% (or even 65.672%). "
Because it's junk debt and there's a high possibility of it defaulting...
DBNO
Hope your cleaning up on this slaughter
So why don't you explain it Romaron. What the redemption yield is based on the coupon, yield and maturity of May 21st?
"they won't be redeemed on May 21 as pmo doesn't have the money."
Yes, you are right, they've already had one in increase in the coupon, I can't remember the actual data, since the issue.
You are also correct, they rank pari passu with the 500,000,000 Euro issue, in fact they share the same base prospectus.
They've pretty much said that in a previous previous RSN. It's an attractive element of the ORB issue, it's seniority.
I expect they've will need to increase the coupon again and the maturity date and most people are holding out for that. I decided to book my profit and push it towards another retail issue with less moving parts, but I may join the party again in the next few days. Once we know what's going on.I haven't got it to hand, but I think revised YTM on what we know now should be c14% plus any change of terms payments. If you run the basic calc based on existing coupon and May 21 (as if that's going to happen) I came up with a YTM of 55% clean. Not sure how the LSE calculate that price, you'd expect it to be clean. I think there's some discussion about the terms, as if I'm correct, 14% YTM would still not be enough for me...
What sent oil south? Early inventories read?
Hi devonplay - I'm not splitting hairs only questioning how you could invest today and earn 68% (or even 65.672%). I don't think you've really grasped this but points for trying.
Thank you Jennifer but I already knew the coupon price on the LSE was wrong.
Actually the yield would be slightly higher as the coupon is 6.5% not the 5% quoted on the website. In reality though we know they won't be redeemed on May 21 as pmo doesn't have the money. They need to be rolled over into another longer dated debt instrument and that is what the current discussions are about! The retail bonds rank equal in all respects with all other senior debt!
You do if you hold the May 21 issue, the combination of coupon and redemption yield. If you don't believe me use the LSE's data..I'm presuming they haven't made any adjustments for the possible change in coupon and extension date as this point for the obvious reasons.
https://www.londonstockexchange.com/stock/PMO1/premier-oil-plc/company-page
Coupon frequency 6 months
Coupon rate 5%
YTM 65.672% - is what they've got on this exact moment!
At this point, I don't see any arguement over splitting hairs LOL It's a tad higher than investment grade which ever way you look at it.
Hi devonplay, you wrote regarding the Retail Bond "Hold them to May 21 and you get a return of 68% on redemption. Honestly.
68%!"
No you don't, honestly!
"Trying your hardest to scare people into selling"
Yeah, you have to watch out for ACTUAL figures LOL It never works out best in the long term if you use ACTUAL data.
All the ping-pong, extension of covenants, increased production from Solan, Andrew is already built into the 16 p sp. With current oil price and sick world economies this sp is only going downwards. IMHO until there is a firm swing in the general outlook. Its not happening this quarter IMHO. Still waiting for 10p
Trying your hardest to scare people into selling
"How could they possible be 690K?"
Because, thats what this site is reporting, did you see the YTM, the market prices this with a return of YTM 68.611% - just let that sink in LOL
And you still don't think this debt isn't distressed? "Hardly indicative of a imminent credit event." Hold them to May 21 and you get a return of 68% on redemption. Honestly.
68%!
Those are 10K face value trades, Devon. How could they possible be 690K?
YTM 68.611% - just let that sink in LOL