ENQUEST BOND ENQ1

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Comments

  • VSIVSI
    edited January 2019
    Has anyone heard if Feb 15 coupon payment will be in cash or PIK? Normally company declares in on Jan 29th
  • Interesting question. I'm working on the assumption that it will be yet more PIKs

    "and the addition of a condition to only pay interest in cash if the prevailing
    oil price for the six-month period prior is at least $65.00/bbl; otherwise
    interest payable is to be capitalized"

    The oil price has definitely been a lot lower than $65/bbl for long periods over the past six months.

  • I couldn't find the actual terms and conditions of the notes on the Enquest web-site but did find a reference on there which confirmed what Laughton was saying but with the addition of the word 'average' before 'prevailing oil price'. However I suspect the calculation will still result in PIKs rather than cash.
  • If you look at Bloomberg CO1:com you will see the price was above $70 from may til Nov 14 when it fell sharply and has been above $60 for a while now. Just looking at it I would judge it to be above $65 on average, so expecting cash to be paid. I cannot find a way of getting the actual average. Anybody know better?
  • I’m with whitebeard - if you look at CO1 from July 29 to Jan 29 Brent average price was $69.93. That’d suggest cash coupon.
  • "and the addition of a condition to only pay interest in cash if the prevailing
    oil price for the six-month period prior is at least $65.00/bbl; otherwise
    interest payable is to be capitalized"

    came from some official source but unfortunate I can't now find where I got it from. Interestingly it does not contain the word "average" and I think that's what it will turn on. My understanding is that "prevailing" is not the same as "average" and that the company will rely on the reading being "at least $65 throughout the period" which I don't think it was.

    Not long to wait to find out though. I'd quite like the cash but so long as Enquest will still be around in 2022 and able to pay up then the PIKs are OK too.
  • Hi all
    Here I think is the pertinent clause. It's in the KID dated 14 Feb 2018. I suspect that Enq has replaced the actual documents with this because I can remember see it in the Retail bond section of their IR website but not in this KID.
    Hope this helps

    The Notes accrue a fixed coupon of 7 per cent. per annum payable semi-annually in arrears. Interest under the Notes will only be payable in cash on an interest payment date if the cash payment condition is satisfied (the "Cash Payment Condition"). If the Cash Payment Condition is not satisfied in respect of an interest payment date, interest will not be paid in cash on that interest payment date and will be capitalised and satisfied by the issue of further Notes to holders of the Notes outstanding at such time. Interest on the Notes is to be paid on 15 February and 15 August in each year (each, an "Interest Payment Date"). The Cash Payment Condition will cease to apply (and thereafter all payments of interest will be made in cash) upon the earlier of: (A) the repayment in full of the Senior Facilities Agreement from cash generated from assets of the EnQuest group; or (B) the repayment or refinancing in full of the Senior Facilities Agreement on terms that enable the disapplication of the Cash Payment Condition and future interest on the Additional Notes to be paid in cash. The Cash Payment Condition will be satisfied in respect of an Interest Payment Date (as determined by the Issuer) if (i) the average of the Daily Brent Oil Prices during the period of six calendar months immediately preceding the Cash Payment Condition Determination Date (the date falling one month before the Interest Payment Date) is equal to or above US$65; and (ii) as at the relevant Cash Payment Condition Determination Date, no payment "Event of Default" under the Senior Facilities Agreement has occurred and is continuing. For these purposes, "Daily Brent Oil Price" means the end of day daily Dated Brent Future published by Platts (or such equivalent price that may replace the dated Brent price from time to time).

    Steve
  • Ah - excellent. So "average" is definitely there and should mean we receive CASH.
    Thanks whitebeard.
  • And now - from the company's website:

    Notice is hereby given that the Cash Payment Condition (Condition 5A
    (a) of the terms and conditions of the Notes (the "Conditions")) in respect of the Interest Payment Date falling on 15 February 2019 has been satisfied and interest due on the Notes on such Interest Payment Date will be paid in cash (in accordance with Condition 5(a) of the Conditions).
    The Record Date for determining the entitlement of individual Noteholders to the interest paid in cash will be the close of business on 14 February 2019.
  • Prefer cash to PIK myself!
    Can buy more bonds with cash at 80c than the PIK allotment.
  • So it was to be paid in cash on the 15th - but has anyone actually received it yet?

    Not showing as of this morning in my iDealing account.
  • With the 15th being a Friday, I suspect it will be shown in our accounts later today. Sometimes it takes a day or two. One of the family accounts is invested in the Enquest bond with YouInvest, not showing the interest payment this morning
  • Just checked (11.30) and its not showing in my HL account yet. Hopefully later.
  • "Good company" dividends normally credited on same day.

    I suspect that if I ask iDealing they'll say that the dividend has been received in cheque form - hence delay.

    Don't you just hate it when companies do that? It's kind of understandable when bank interest rates are really high and they can earn a few extra pennies by holding onto money for a few extra days.
  • For information, my ENQ1 coupon has just been paid into my Selftrade account.
  • iDealing account credited yesterday afternoon.

    Sorry about above - just me having my little moan.

    Now what to do - buy a few more??
  • I would not hold more than a few percent of these in my portfolio. I consider them either a straight gamble for yield, or as a trading bond. Their yield is pretty indicative of their risk. I have dipped in and out of these and PMO fairly successfully. I prefer PMO over Enquest. It is a challenge to find a worthwhile yield. You should consider your exposure to sterling. I have put a big chunk into a gold ETF (PHGP) as an attempted hedge against hard brexit. The stock markets look ripe for a correction, though I admit they have looked this way for some time.
  • If stock market overdue a correction, then what about gilt yields? With a GE increasingly probable due to HoC disarray and barely functioning government, the prospect of Momentum running the country should make us all shudder, if the negative yield on 10 year gilts ( considering RPI) does not.
  • Just noticec this on their website
    Notice is hereby given that the Cash Payment Condition (Condition 5A(a) of the terms and conditions of the Notes (the "Conditions")) in respect of the Interest Payment Date falling on 15 August 2019 has been satisfied and interest due on the Notes on such Interest Payment Date will be paid in cash (in accordance with Condition 5(a) of the Conditions). The Record Date for determining the entitlement of individual Noteholders to the interest paid in cash will be the close of business on 14 August 2019.
  • I'm going to have a little gloat about my Feb 20th PHGP call. :smile:
  • EnQuest said it evacuated the Thistle platform in a precautionary move on Monday evening....following a structural inspection:

    https://www.bbc.co.uk/news/uk-scotland-north-east-orkney-shetland-50134399
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