GBP 3 May 2013 Paragon Group Co PLC XS0216276070 3.729 20 Apr 2017 3 yrs 11 mths 87.667 7.386

The above bond is shown in your Bond Price List. Yield seems too good to be true. Can anyone tell me more as I can't see it on Paragon's site or anywhere else? Thanks. d

Comments

  • IMHO no fuss, nothing special here.

    What do we have? 3.729% yield, due in 2017, at current price yields a bit north of 7%.

    Nope, nothing unusual. Yield is less than say LLPC @ 7.58%.

    The ISIN gives this page on the LSE:
    http://www.londonstockexchange.com/exchange/prices-and-markets/stocks/summary/company-summary.html?fourWayKey=XS0216276070ZZGBPSSX3
    ... so I think this is the repriced continuation of what was originally a 7% bond. Yes the price would be good for 7% coupon. Alas this is no longer the case.
  • By my calculations, this will give a running yield of 6.77% with a maturity date of April 2017. Which seems to make it more attractive than the recent Paragon bond maturing in May 2020, with a running yield of 5.47%.

    Also, much of the yield would be a capital gain rather than interest, which would be good for me.

    Does anyone else have any thoughts on why this would be ?
  • Haven't managed to find the final terms for this bond, just the prospectus for the series. But RNS 5029B does state that the coupon reset to 3.729% - as per gadget's post - in April last year, when the bond was not called.

    Based on the ask price of 92, the running yield is 4.053% and the YTM is 6.095%.

    In comparison, using 103.65 as the ask for PAG1 the running yield is 5.79% and YTM is around 4.95%

    So it is the reset of the 2017 coupon that is causing the apparent discrepancy.
  • Sorry ArkWelder, I should have said YTM instead of Running Yield. I was in a rush as the Champions League Final had just started !
  • edited May 2013
    I know what you mean - I've learned to never mix footie with investing!

    [edit] ...and I'm not really watching the women's FA cup final...honest... ;-)
  • Was looking for somewhere to park some of my ISA cash balance for a year and was looking at this bond which matures next year. I have a quote to buy at 100.25 which gives a YTM of around 3.46% - looks quite reasonable to me.

    I realise that I could buy and sell a bond of longer maturity with a possible higher yield, but the selling price would be up in the air - this seems a little bit more of a safer ploy for the next 11 months or so

    Any comments/observations welcome
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