Need urgent bond help

[DGuller]

Not rated 

To get that kind of yield in the US you'd have to eat a helluvalot of risk.  I say walk away.

I think these days that's true everywhere.  I don't know if we'll ever get back the days when an interest rate that doesn't start with 0. is considered risk free for an individual, but we certainly aren't there yet.

[MadImmortalMan]

Portuguese bonds were in the 9% range a few years ago...

[grumbler]

Instinct says grumbler is right. Fear says when there is debt restructuring going on, bondholders usually get the choice of getting screwed a little or getting screwed a lot. Look at the recent PIIGS haircuts.

The fearful route, I would think, is to bail on the 2015 date, rather than taking 5.25% of your investment and then hoping the venture holds together until 2018 or 2020.

Instinct and fear work together on this one;  bail as soon as possible. Taking the pittance now and risking the haircut after the 2015 payouts is the gutsy call.

[celedhring]

What PIIGS haircuts? There's some extra letters that don't belong in there.

Regarding the OP, when were you sent this, Mono? They seem to be giving you a really short window to opt-in, which is not the kind of thing you do if you want as many people to sign over as possible.

[DGuller]

Yeah, a short deadline is another red flag, unless it's the usual way it's done there.

[The Brain]

Portuguese bonds were in the 9% range a few years ago...

Daylight rubery.

[CountDeMoney]

Can't help you unless you come up with at least half, and pay off the other half before you go to court or it's pack your toothbrush time, I shit you not.

[Monoriu]

Regarding the OP, when were you sent this, Mono? They seem to be giving you a really short window to opt-in, which is not the kind of thing you do if you want as many people to sign over as possible.

22 April evening.

[Monoriu]

I don't think 8-9% is the yield.  That's the coupon rate only.  The problem is I don't know what the price is. 

[Sheilbh]

Take the money and invest in land

[Admiral Yi]

I don't think 8-9% is the yield.  That's the coupon rate only.  The problem is I don't know what the price is.

It looks to me they're offering to exchange new bonds at par, paying the stated coupons, with the early acceptance bonus listed.

That part looks clear enough to me.  My reservation about the deal is the risk implicit in those yields.

Who's the issuer?

[Monoriu]

Who's the issuer?

A HK real estate developer.

[Admiral Yi]

 

I suggest you don't take the offer.

[Monoriu]

I have decided to take the offer.  May the Force be with me.

The only remaining question is if I am going to choose 2018 (8.5%) or 2020 (9.25%) (callable 2017).  I am going to assume that they'll call the bonds by 2017 if they can issue new bonds at a lower interest rate.  Seems to me that 8.5% for 4 years is better than 9.25% for 3 years.  Leaning toward 2018 at the moment. 

[DGuller]