Member Info for fleccy

I don't see what's confusing Daniel, I just copied all of Vodafone's debt and pasted it into a spreadsheet, and then inserted a chart based on the Bond value's and Maturity/Next Call dates, it's quite simple really. You're correct that I have no idea where the share price will go and I've never claimed to know, hence my reason for not joining in with the weekly prophecy threads.

"As i said not all of bonds are classified as debt depending upon the composition"

I didn't know you were a fan of the rating agencies LTI, because debt is debt whether or not S&P Global, Fitch, or Moody's view it differently; You can put lipstick on a debt pig, but it's still a pig and will eventually have to be paid, whether by issuing more stock or in cash.

We still hold 75,859 Vodafone shares, since the recent sale for Capital Gain reasons, so I'm not bashing Vodafone I'm just discussing the debt situation; I believe Vodafone is undervalued, but giving my opinion that the market uses debt to bash Telecom companies shouldn't wind people up, since my opinion doesn't change the facts. I implied in my previous posts that buybacks at cheap valuation are a good thing, as is debt reduction, with Vodafone currently doing both of those things.

"Yes like for acquisitions such as for liberty global,which was partly funded by the issue of new bonds"

It's funny you mention the Liberty Global purchase, because I believe Liberty pulled a blinder in getting rid of those particular assets. Vodafone bought a bunch of cable assets based on a DOCSIS architecture, when Cable companies are migrating away from DOCSIS and onto FTTP. The recent changes in German law meant that Vodafone can no longer lock in customers in Multi Dwelling Units, leading to significant customer losses. Again I'm not bashing I'm just stating the facts, maybe Vodafone have a plan and good reason for buying those assets, I'm just not clear on what they were thinking. Not too long after the sale to Vodafone, Liberty Global and InfraVia Capital Partners created a Joint Venture to build an FTTP network in "underserved" areas of Germany, but it subsequently filed for bankruptcy after a short period of time. My point is that DOCSIS is on its way out, yet Vodafone bought DOCSIS assets and didn't seem to be aware of the upcoming law change, I bet Liberty did though.

"As I said bonds can simply be rolled over if that is what VOD want to do. Also bonds are not always considered debt by the credit ratings agencies depending on how they are structured"

Debt can be rolled over, but interest payments still have to be paid out of profits and the debt itself still weighs on the financials until its paid. The market in its wisdom punishes Telecom companies for the Debt on their balance sheets. Every time Vodafone and BT publish their results, the analysts and financial media use debt as a stick to bash them with, to justify low valuations. There are probably good accounting reasons for telecom companies to hold a certain amount of manageable debt on their books, but the market will unjustly use it to push the share price down, until the market decides to change the narrative.

Our remaining Vodafone stock is in ISA's and we're in it for the long haul, so we'll just hold and take dividends until the market narrative changes, however long that may be.

Yep you're correct, I've took a bit of a closer look and although some of the Bonds mention the previous 2021/22 mandatory convertible bonds, the remaining Hybrid Bonds may well not be convertible. If that's the case then that's worse, since buying back shares while they're cheap would be far better for satisfying MCB's than having to fork out hard cash from profits.

https://docs.google.com/spreadsheets/d/e/2PACX-1vRA1ndHTf_Bz7O_moDxmcbWnEtcusZucUu6lEJvm3O4mGooeH4ErFjRqot3RQHBaVXCgoUED1k2CUVK/pubchart?oid=1681133451&format=interactive

Vodafone have around €23 Billion worth of bonds either maturing, or hitting next call date, between now and 2032. Maybe they wont be able to settle their Hybrid Bonds with cheap shares they're buying now, but it would likely be better if they could.

I know Vodafone have used MCB's in the past, but I haven't checked myself to see if any of the Hybrid Bonds are MCB's. Either way Vodafone have a fair amount of debt maturing over the next 6 years.

A picture is worth a thousand words Daniel. The charts I built for Vodafone helped me understand how Vodafone's finances work. Here's a few more:

https://docs.google.com/spreadsheets/d/e/2PACX-1vRA1ndHTf_Bz7O_moDxmcbWnEtcusZucUu6lEJvm3O4mGooeH4ErFjRqot3RQHBaVXCgoUED1k2CUVK/pubchart?oid=325944045&format=interactive

https://docs.google.com/spreadsheets/d/e/2PACX-1vRA1ndHTf_Bz7O_moDxmcbWnEtcusZucUu6lEJvm3O4mGooeH4ErFjRqot3RQHBaVXCgoUED1k2CUVK/pubchart?oid=498591&format=interactive

I might bring them up to date soon, if I can be bothered.

Hopefully the chart is correct now 🙄

Forget that chart I just posted, the order seems messed up a bit. I suspect it happened last time I deleted some entries as Vodafone removed them. I'll have to check it against the debt page.

"I am not going to bother to look into the makeup of VOD bonds, but if callable bonds, that would give the right to VOD to redeem them. Obviously if there are mandatory convertible bonds as opposed to normal convertible bonds then they would create extra shares"

I haven't checked/updated this chart against Vodafone's debt page, but it'll be very close if not entirely correct. The Hybrid bonds are in Blue and showing against the next call date.

https://docs.google.com/spreadsheets/d/e/2PACX-1vRA1ndHTf_Bz7O_moDxmcbWnEtcusZucUu6lEJvm3O4mGooeH4ErFjRqot3RQHBaVXCgoUED1k2CUVK/pubchart?oid=17624073&format=interactive

Anyone tell me where they talk about Lloyds on lse.co.uk? Because Im hard pushed to find much about Lloyds on this chat page.

Macy, in Vodafone's case buybacks are a no brainer. Vodafone are selling non productive assets, so reducing the size of the company, and they have Billions of Euros of hybrid bonds maturing over the next 6 years. Buying back stock now, while the price is cheap, maintains the EPS ratio and prevents dilution as the Hybrid Bonds pass their Next Call dates.

As much as I agree that Buybacks for some companies makes no sense, in Vodafone's case there's an argument that Buying back stock now is essential.

Tesla is overvalued, and part of the pump at any cost US exceptionalism policy of creating behemoths. Companies like the Mag 7 owe their success to an almost unlimited amount of cash used to manipulate/inflate their stock prices, allowing them to sell shares and grow through acquisition. Generally US Tech valuations are ridiculously high, as an example I'd never heard of Crowdstrike until they Crowdstruck the World. Comparing Crowdstrike finances to Vodafone; Crowdstrike revenue is $3.95 Billion with a Net income loss of -$19 Million, yet their Nasdaq Market Cap is over $80 Billion; Vodafone revenue over €36 Billion and Net Income over €1 Billion profit, with a Market Cap of just under $24 Billion. Crowdstrike is an example of what's wrong with US valuations, invest in overvalued US stocks at your peril.

Hi bowler, back around 2001 BT entered into a sale and leaseback agreement with Telereal Trillium.

https://www.building.co.uk/corporate-real-estate-telereal-closes-deal-to-manage-bt-properties/1014242.article

The exchanges were classified as "Specialised Estate" and under a 30 year agreement BT can apparently close a percentage of the exchanges annually. After 2031 I believe BT will have the option to exit the agreement on any remaining "redundant" exchanges.

https://www.ispreview.co.uk/index.php/2025/02/openreach-to-start-closure-of-105-national-uk-exchanges-in-april-2025.html#:~:text=Network%20operator%20Openreach%20(BT)%20has%20confirmed%20that,sites%20(due%20to%20complete%20by%20around%202030/31).&text=5%2C600%20UK%20exchanges%2C%20but%20only%20c.

The lease liability portion of the Net Debt figure is significant, but reducing year on year and will drop considerably once BT close the majority of the Exchanges.

In the FY24 results BT said

"Net financial debt (which excludes lease liabilities) at 31 March 2024 was £14.5bn (31 March 2023: £13.5bn), increasing mainly due to our scheduled pension scheme contributions of £0.8bn.

Net debt (which includes lease liabilities) at 31 March 2024 was £19.5bn (31 March 2023: £18.9bn). The difference to the movement in net financial debt reflects lease movements."

So at the end of FY24 Lease Liabilities added £5 Billion to BT's Net Debt.

For the whole time I've watched QBT, they've intermittently released updates followed immediately interview's on Proactive. Do they pay for these interviews? If they do they should probably have some sort of disclaimer saying it's an Ad, similar to the Ad content slipped in between normal articles on the MSN homepage. Watching the videos and reading the PRN's is like Deja Vu, with the theme being Jam Tomorrow.

I can't reason why, but I have a hunch something is going on with BT; Possibly because of Morgan Stanley's hokey cokey dance, or a few analysts all of a sudden publishing downgrades just as the price trajectory was on the up. Since it's nothing more than a feeling, it'll be interesting to see what happens over the next month, or two.

LTI said

"I made a sale at 53p on 7th Jan 2022 then the 2 very recent sales.

How many years dividends did I make"

How much of a capital gain did you make?

Be careful who you trust to hold your shares if your holdings are over £85,000, because the shares are in their name not yours, so if they go bust you could lose a good portion of your holdings.

" You keep making calls like that over an extended period you will be a lot less wealthy"

Yet our stock valuations, in cash terms, are higher than they were last week. Go figure.

I agree with you about ISA's Daniel and more than half our holdings are now in ISA's, but my wife's share dealing account is quite old and used to be free, and because in earlier times the capital gain allowance was much higher, and going higher each year, Isa's didn't seem that necessary at thee time. I can't exactly remember when, without delving into our account's histories, when it became necessary to start piling into ISA's, but with hindsight I wish we'd started out with ISA's from the beginning. Basically we're now trying to sort this out.

I've told you before Daniel, I'm an ex Vodafone employee 🙄Who has a little bit of experience with the online self assessment process.

The capital gains section of the online Self assessment allows simple transactions to be logged in a computation workbook. Shares accumulated over varying years in the same company average out the book price, I believe it's called a Section 104 holding; So the averaged out book price in a share dealing account is what you'd use to calculate the acquisition cost for the amount of stock you're disposing of. Acquisition incidental costs are optional and should be accounted for in your share dealing account book price anyway. With it just being a few trades, you could probably complete the self assessment workbook in 10 minutes if you have the relevant information at hand.

I'm not an accountant, so I'll happily be corrected if I've misunderstood this.