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Comments

  • Selftrade are participating in the IPO - have just downloaded the prospectus to read later
  • Have seen no comment anywhere on these.

    The prospectus certainly appears to have covered all the risks associated with the various operating companies with great detail.

    My first reaction was that the coupon didn't really reflect the risks to be taken on board, but on reflection, bearing in mind they are for 5 years I think they have pitched it about right.

    REA's prefs are yielding about 8.3% for an undated investment for one commodity in one country. MRG are more diverse geographically and in what they do

    Anyone else going to take a punt on these ?

    The Retail Charity Bonds of late have brought comments about long duration and low coupons, so I was expecting a few more remarks on this issue being not only a higher coupon and short duration but also being a move away from finance and proprty.

    I hope Oliver has time to do a write up on these

    Perhaps everyone is on holiday

    Woz
  • Woz,
    I have no intention to subscribe to this issue, mainly as it is an overseas operation.
    The 7% coupon would indicate a higher than normal risk.
    I would query, why are they issuing GBP debt for a company mainly dealing in Euros?

    Of interest I have recently sold my Rea's Prefs and also disposed all the Retail Charity Bond issues earlier in the year which I had participated in ( Long duration, two dates, low coupon)
  • First paymemt july 2019 , i think not
  • I think this is a good issue. The company is profitable and cash flow positive from what i can see in the prospectus.

    The company has issued a couple of EUR bond through their subsidiary Metalcorp and those bonds traded well in the secondary market.

    I am planing to subscribe with a higher than usual allocation for me, will sell in few weeks hopefully with a decent premium
  • Seems like quite a small company - group revenue c. 656 million Euros 2017. Two years financial info in the prospectus, none on their website (are they reluctant to disclose it?). Is it a recent start-up?
  • I've been in the commodity business for 15 years, never heard of them before. High risk company IMHO in a high risk sector.
  • Maybe too good to be true but could be a spec. rather than investment. As it looks so fancy might as well just invest in Ord shares then its 50/50 up/down-why spec. for just 7pct which may/may not be paid. Think crypto almost looks a better punt and we know thats a fix !
  • Sussexmade & Paddy,
    Agree with both of your assessments, the business is in a very high risk area- "core business divisions “Metals and Minerals”
    Much prefer to place my pension into assets closer to home,
    Just purchased a few more RSAB at 1.275 (good price) giving a yield of 5.784%
  • Shaunm,

    Can you be sure that RSA will not try to redeem those at par any time soon ? I worked for them twenty years ago until I was outsourced, so know they will always try for a fast buck where they can !
  • I firmly think they won't redeem at par, due to the very bad publicity regarding Aviva's shoddy attempt, however they are very likely not to encourage investors to invest in their "Preference Shares", in an attempt to keep the market valuation down. In a couple of years time they may attempt a market price optional "tender".
    The Nationwide did a similar move back in 2013, fortunately I held onto my POBA holding, which is showing a 17% unrealised capital gain.
    http://www.fixedincomeinvestor.co.uk/x/analysis.html?type=bond-of-the-week&cat=analysis-comment&y=2013&aid=1092
    Meanwhile they offer private investors, and retired pensioners like myself a reasonable income in what should be a safe haven; but then what is safe!
    I appreciate your comment regarding the insurance industry "morale ethics", not as good as in the good old days (I too worked in the insurance industry for a few years in the 1990's, Corporate Accounts)
  • Euro17,
    Within the above link, Oliver made the following comment
    The doyen of the PIB and preference share market, Rik Edwards, has said: “Unless investors are worried about the credit quality of Nationwide, there is no compelling reason to tender their stock, as they will find it difficult to replace the yield on these PIBS.”
    Same applies to RSA Insurance & Aviva Preference Shares.
    If anything, both the insurance companies could be taken over by larger groups based in Europe, thus the credit quality could improve.
    Nothing has been, and will never will be 100% safe.

    However, investors have been putting their money into riskier securities!
  • If there was a bid for such as Aviva as that would almost certainly trigger a redemption of the prefs as there would be a significant gain to be had on the part of whomever was bidding to do so .

    I can not see the cashflow of Monaco is currently that encouraging , in fact its looking a bit tight .
  • Cashflow is one of the key metrics, other measures in the accounts are easier to dress-up, think EROS.

  • Have reverted to my initial view that the coupon does not cover the risks. I was going to buy a load then sell in coming months but I think there is strong possibility these may trade under par by then - we'll see, or rather they will see as I won't be part of the "we".



  • has this company issued other bonds?, if yes what levels are they trading at?, is the equity traded on exchange?, even EROS has a share price as an indicator of financial health.
  • With trade wars on the near horizon, uncertainty relating to the UK leaving the EU, my gut feeling is that we may see some late summer hurricanes and stormy waters battering the global markets. China is already down this year, time to batten up the hatches!
    Not a good time for new investments, in particular in cyclical industries.
    However could be a good time to retain some cash for salvaging "Ship Wrecks" on the high seas!
  • Ps - off now for the weekend to paddle (kayak) the River Thames in and around Oxford, calmer waters! (BOE Interest rate rise in August is another factor to add to the growing swell).
  • This is a group that has operating companies in many diverse industries - agriculture, mining, ports, finance - only loosely connected by the "Commodities" banner, yet I've never heard of it. The financial arm troubles me particularly: if borrowing at 7% what rate are they lending at?

    The 7% coupon is attractive but I can't help feeling that something is not quite right.
  • Shaun, hope you have a good paddle and if you see any 'strandings,ship wrecks,floundering etc. ' do let us know and if the price is right we might come to the rescue. Maybe find some MRG share certs as flotsam or jetsom even. !?

    Tightwad, your last para above is my sentiment too and i guess everyone elses ,there may even be a small premium at the start of trading but i'm prepared to forgo that for sanity sake.

    Good weekend all and think there's some sort of game of football happening-any bets !?
  • Not one for me on present information.
  • ok, So UK govt bond 5 year yield is 1.02% (in GBP), France govt bond yield (EUR) is approx 0%, that's a rough indicator of the yield differential, between GBP and EUR, ie GBP being about 1% higher, so 8.5% in EUR is equivalent to 9.5% GBP, given the bond is trading slightly about par, that would indicate the current GBP par Coupon should be about 9%, I wouldn't be surprised if this bond gets pulled due to lack of investor demand.
  • their subsidiary for metal trading has a 7% EUR bond which is trading quite well.

    https://www.boerse-berlin.com/index.php/Bonds?isin=NO0010795701

    Considering the GBP bond is issued by the parent company, i think it is a fair coupon.
  • As mentioned, that equates to about 8% in GBP, if I was looking to invest in this bond (obviously I'm not), then I would have to see a lot of detailed research similar to Oliver's bond of the week, what is the security/assets of the parent company? The other curious thing is why is the company borrowing in GBP?, all it's commodity business will be either in USD or EUR. Remeber ENQ and PMO almost went bust in the last down cycle and they are very long established, well known and LSE listed equity.
  • It's the same reason why tritax eurobox is raising GBP, it's a source of funding from global capital, you can see they tapped eur through 'BankM – representative office of FinTech Group Bank AG' for their African logistics, thank god for some fintech -

    https://www.r-logitech.com/r-logitech-s-a-r-l-successful-full-placement-of-the-8-5-corporate-bond-2018-2023-with-a-volume-of-eur-25-million/

    Though, the extension is worrying, nor the confidentiality of the parent company owner is helpful, only names i can see are Sebastien Maurin (Cantor MD) and Pascale Younes (Corporate Secretary) -

    https://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/other/13707820.html
  • The other thing to point out is the difference between a commodity producer, eg ENQ and PMO, who extract oil from an underlying asset and a commodity trader, who buys and then sell, if they sell for more than they buy, then they make a profit, otherwise a loss, the underlying asset is the retained cash ( from the shareholders or bondholders)
  • some more gossip here:

    Trader Sues Finance Firm For Tricking Her Into Leaving ED&F
    By Richard Crump

    Law360, London (April 9, 2018, 4:11 PM BST) -- A trader who claims she was headhunted by R-Cap Management U.K. Ltd. has sued the London-based investment firm for allegedly lying to her about its financial backing to convince her to quit her job at global financial broker ED&F Man Capital Markets Ltd.

    Mariana Faria da Silva claimed in her March 6 filing against R-Cap, a subsidiary of commodities specialist Monaco Resources Group, that the original job she was promised running a global trade finance portfolio never materialized, and she was dismissed less than a month after taking...
    https://www.law360.com/articles/1031065/trader-sues-finance-firm-for-tricking-her-into-leaving-ed-f

    lemon fool comments here:
    https://www.lemonfool.co.uk/viewtopic.php?t=12413


  • Looking at Selftrade's website, the offer appears to have been extended until 1000 on 18 July 2018
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