IPF 6.125% 2020

Why is this such a laggard? Recent business update pretty much as expected, concerns over Poland appear to be overdone, Mexico supposedly developing nicely and stock price, after earlier fall , has stabilised. Yet it trades 8 points below its cousin Provident Financial 6% 2021and yields 20% more than the multitude of (mostly unrated and highly leveraged) property issues on ORB.

Comments

  • I have a few of these and considering topping up. Interactive investor shows IPF buying back a few of their shares and some recent sales. Maybe it's the general malise surrounding bonds. They appear cheap at the moment but have always been a little behind Provident Any suggestions would be welcome.
  • One tale of woe after the next here; would appear that Eastern Europe will not tolerate their business model. Meanwhile what was management doing buying back shares continuously whilst disregarding the omens? Trying to prop up the share price as to protect their compensation? Honi soit qui mal y pense... Then there is the unfortunate timing of launching new bond issues, most recent example 5% Czech, just when Slovaks made their ruling. Pretty useless board, fear that bonds will have further to fall.
  • Some intresting comments on the motley fool board. Further heavy fall today. Lets hope they can maintain their 6.125% and stay solvent untill 2020 !
  • I find it a nightmare finding stuff on Motley Fool board - can you post link to the relevant place?
  • laughton, i found it by going to usefull links at the top of the page, then to Motley fool banking board where at 12.36 today 11/12/15 their are three links (2 possibly yours)
  • Ah yes. As you say, 2 of them are mine. I wasn't sure that IPF qualified as Banking so wondered if you had come across posts on another MF Board.

    Hoping to get some input from those better qualified than me as to the chances of them still being a going concern in 2020 and in a position to pay on maturity. A yield of 10% sounds nice.
  • Next week these guys issue their 2015 figures. Any chance of Oliver reviewing this bond in light of the latest figures - maybe having a chat with some key figures? 4 years is not far off to maturity, it should be possible to give a reasonable prediction of their solvency over that timeframe. I'm heavily exposed to this one, so it would have to be quite reassuring to persuade me to invest any more but on the other hand it could be a real bargain at this price.
  • Looking through their results presentation a couple of days ago and the figures, it looks as though several sections of the business are under significant stress because of regulatory changes but the Mexico arm and the established part of the online business are relatively robust. Whilst the business will undoubtedly look very different and possibly smaller in 4 years time and the programme of buybacks and dividend hikes is not in the interest of bondholders, I think the current price is a bit of an overreaction. If they needed to refinance their 2020 issue today, I doubt that they would have to offer such a high rate of interest to attract sufficient interest. I was already heavily exposed here but put in a little more anyway.
  • Brave man !!! Good return if they hold out. I'm looking to spread my finances and there is some tempting offers out there.
  • For those investors who are in "Retail Bonds" then having a "small slice" of IPF makes sense in order to diversify a portfolio. Others like myself, who already have a reasonable holding may prefer to wait for other opportunities that are likely to appear.
    Politics (EU Exit) over the next 6 months may harm Retail Bond prices!
    Any other views?
  • Quite apart from the next 6 months, there's the whole transition to "out" to be negotiated, if the vote goes that way. All the renegotiations involved in the "out" scenario would be hanging over the UK for years and the general uncertainty associated with that can only be bad for the markets. Given that many of the retail bonds are associated with property, foreign investor confidence in London as a global centre could be significant.
  • IPF have released their 2015 results, not as bad as I had thought they could have been.
    Profitability from Mexico now 16.2% of total profits (2014: 11.7%), thus making it more a diverse operation.
    Overall profit £134.9m compared to £140.2 in 2014
    Spent over £50.2m (2014 = £45.3m) on the purchase of their own shares, however one must question "was this money well spent?", my answer would be No!
    Purchases (a few typical undertaken during 2015)
    20/08/15 140.5K @ 389.03
    20/10/15 121.1K @ 408.06
    04/12/15 138.8K @ 358.51
    09/12/15 119.0K @ 341.19

    Current mid price = 280.0
    Why buy your own shares with so much uncertainty around the corner?
    Does not help Retail bond holders

    Any other views?
  • Another one ticking back up, 94 bid at the moment
  • Thought maybe worthwhile bumping this up to top
  • Hind, looking back and seeing that they spent a considerable sum in 2014 & 15 buying their own shares at more than twice their current price seems very foolish. Money straight down the drain! As indicated, doesn't help the holders of their retail bonds
  • edited May 24
    Yes shaunm, they unfortunatly didnt ask you for advice. If the balance sheet is right they were paying a premium over assets then and now trade at a discount. Partly due to possible legal changes/issues and negative sentiment towards the sector, hopefully theres not something else too that Im missing.
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