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What are people's opinions regarding the news from RLE today? It seems that they're achieving sale prices above NAV and that the Midlands market for small properties is still relatively bouyant. That seems to be the closest reit to RGL?
Guitarsolo: "CaneToad, is the final coupon (2.25p) paid on 6th August along with the redemption?"
The next coupon is 6 Feb, then the final one is on the maturity 6 Aug. When you buy the bond, you'll have to pay the accrued interest, the 'dirty price'.
Canetoad; I totally agree with your thinking re bond.
It's non payment would warrant collapse of the Company. I personally see it being morphed into one of the ABSs being extended in amount/tenure/rate.
My provider doesn't allow me to buy the bond, but I'd buy tommorow if I could.
CaneToad, is the final coupon (2.25p) paid on 6th August along with the redemption?
i'm a holder of the retail bond. it's looks relatively secure to me.
not repaying the bond would be the end of the company. if it was at risk, the first thing they'd do is cancel the common share dividend - that alone would save £25m, half of the retail bond. if you assume they had a firesale, achieving just 50% of the nav, they could still repay the secured debt and retail bond. the market is weak, but i don't yet see any evidence that properties are selling at a 50% discount.
that's my back-of-*** packet analysis - i could be wrong, dyor.
I have traded in distressed/ stressed /high quality bonds for many years.If you buy the bond now,you will also pay for the accrued interest to date,so you do not have the bonus of the Feb coupon in full.
A bond trading at this price so close to maturity is very unusual for a good quality credit.RGL is far from that.The discount / high yield reflects the uncertainty of full repayment,based on no positive info from RGL,the high leverage and doubts about the solidity of asset values.If you have faith in the equity ,then you should think the equity is cheap.Bond holders are not just retail holders.Institutions have been buying in.You cannot find out which.RGL and connected parties are governed by the same insider trading rules as for equities.
If you are interested in investing in bonds you may want to take a look at TFIF. It holds a portfolio of primarily investment grade bonds. It currently has a dividend yield of 9.01% based on the dividends paid for the year ened 31 March 2023 but is likely to pay 11p (a prospective yield of c10.5%), perhaps a bit more, for the years ended 31 March 2024 and 31 March 2025 (if there's no material change in the current base rates).
Caveat emptor as always.
I think a lot will depend on the bond's rating. Bonds with a rating below BBB- (on the Standard & Poor's and Fitch scale) or Baa3 (on Moody's scale) are generally considered speculative and often referred to as "high yield" or "junk" bonds.
Given the size of the bond relative to the size of RGL, it's likely that its bond would always been afforded junk bond status (the bond may even be non-rated; I don't think the bond was rated before issue). Furthermore, the bond is unsecured and, as such, a high yield would not be unusual.
I've never bought or sold bonds, so I'm not sure when the discount might normally be expected to unwind.
It did occur to me after I wrote my post about the last coupon of 2.25p which would normally fall on 6th August which is also the redemption date. Is a last coupon paid along with the redemtption? If so, you would get 2.25+2.25+5.625p=10.125p between now and 6th August.
Does anyone out there dabble in corporate bonds close to redemption? Is RGL1 an anomaly or do you get bonds at 5%+ below par within months of redemption? Personally I can't see RGL defaulting as it would be catastrophic for the business. They would sell anything to avoid it, surely?!
I make YTM a bit less than that (16.04%) and a bit les if you include dealing costs.
And as you've guessed, it yields that much because of fears that it might not make it to August. You pays your money and you take your chance. Bond investors are generally a pretty conservative bunch.
Morning all,
I just tried a dummy buy of the bond and was quoted 94.375p for it. So by my calculations you get 2 x 2.25p coupons, plus 5.625p extra on the redemption on 6th August....which equates to an annualised rate of return of 18.95% (195/365 days).
Is this typical for bonds like this? Or is this being valued like this because of genuine concern about RGL's ability to pay it.
I would have expected bonds to trend towards 100p as they get close to redemption. Does anyone here have experience investing in bonds this close to their redemption and can you share your thoughts?
Guitarsolo
If Trump wins,, Odds are in favour,, expect 50 percent USA market going higher,, and interest rates will be going much lower,, So this could be a once in a lifetime opportunity to start your investments,, just like previously..
Healthy Dividends,, and interest rates Should Start to Fall,, Could easily Double from here..
NotR. This is just my gut feeling here. Hope I'm wrong as I have a (small)shareholding here. Priority should be getting the debt down and sacrificing dividends to do that. Difficult market to offload offices right now.
Sorry should say it’s my view not as I’m not privy to anything news worthy. Your 20p on Six months is just as valid. (Friday night commentary isn’t probably a good idea).
Those were comments from yesterday morning if you get their subscription. Think they are behind the curve. Last property sold (RNS) was well above market value. IE the valuation is marked down severely and is the gauge for LTV ratio. If the valuation is actually higher, which is implied by recent sell, then the LTV is wrong and the SP should be higher.
I suppose it’s the choice of if you believe 20p based on a guess (not imentioned in the IC article) or feel the bottom is in. I suppose I’m in the - bottom is in corner.
Good luck all holders.
Interesting comments in IC today. See it heading to 20p in 6 months
What would your new price target be then?
Well interest rates should start to come down next few months and this will double in price,, Solid Long Term Buy, With passive income,, i Sold in high 50s just before the hikes in interest rates,,
And today I see Custodian and abrdn have agreed a merger.
Well interest rates should start to come down next few months and this will double in price,, Solid Long Term Buy, With passive income,, i Sold in high 50s just before the hikes in interest rates,,
Got out whilst still in profit + divi but will watch it closely looking like it’s expecting bad news but hard to call with further weakening in wider market
Been steadily dropping back to 30p. Surprised by the selling, but is back into top area.
See how it plays out next couple of days
I notice this sale RNS, which suggests sentiment is stabilising/improving....
'Custodian Property Income REIT PLC - Leicester, England-based real estate investment trust focused on smaller, regional properties - Sells 16,869 square foot office asset in Derby, England, for GBP2.1 million. Notes that the sale is 36% ahead of its valuation at September 30.'
Hopefully some clarity on a plan for the bond will remove further concerns and see this get back to a more realistic price. I do think we may have a further cut to the divi but that could be a positive if handled correctly