Enterprise Inns 6.375%. What's the catch?

Hi

The Enterprise Inns 6.375% have a YTM of over 6%.

It seems to be too good to be ture.

Is there a potential early call or other gotchas please?

Comments

  • edited November 2019
    on your right side panel there is a search functionality below all the various categories, search for ak44 and the first search result, well now second, was discussing this couple of days ago, again search for ak44 on that page
  • It's largely due to the fact that there are 11 years to maturity. The longer the period, the more time the company has to potentially get into trouble and the higher the chance of you not getting your money back. With shorter dated bonds there is more certainty of return of capital. Also interest rates could change significantly over the period. If interest rates go up (not looking very likely now but who knows?) then the fixed 6.25% may not look so attractive and the price of a long dated bond can fall significantly. On a more technical level it is all to do with the concept of duration which is how sensitive a bond is to changes in interest rates. Taking an extreme example, the gilt due in 2068 was up almost 30% at one point this year linked to the small move down in UK interest rates and future interest rate expectations (the yield to redemption fell from 2% to 1% so a 1% fall in interest rates moved the price 30%). The opposite can happen as interest rates rise (or are expected to rise)
  • There is already a thread on this security - relating to the merger with Stonegate - The pricing indicates possible repayment at par?
    Therefore do "Proper Due Diligence" before investing
    Your question raises questions as to how much own research you had done before posting?
  • Haha > Your question raises questions as to how much own research you had done before posting > Emotional & Financial Pressure > dandigirl > You see some potential that i can very well see now
  • Arjungaur, Your personal comment re a long time contributor to this forum is not warranted, please refrain in future, thank you
  • I agree wholeheartedly shaunm. What marks this forum out from many others is the civility of the debate. It would be an immense shame if that were lost.
  • Thanks for your support, Beekey, this forum has provided vital tips etc over a good number of years, and may it wish to continue. The information provided here is so much better than reading Investors Chronicle, 99% (buy) tips are rubbish, 1% are worth reviewing. Page 35 (today's copy) David Liddell's Income portfolio over a year only managed a 1.8% gain, including re-invested divs etc. Many thanks to my fellow contributors for providing information regarding Fixed Income securities, been really helpful, please keep posting!
  • Yes thanks Shaunm. I'm not so active on this forum these days and missed the Enterprise Inns takeover so learned something useful today. As you say over the years I have picked up a lot of good information here. Been an interesting ride since the introduction of Orb and my main issue now is finding a home for the money as my retail bonds mature over the next few years. Maybe that 4 year BrewDog bond paying 6% half of which is beer vouchers? (I jest)
  • edited November 2019
    can u elaborate which personal comment are you referring to?

    who is the long time contributor?

    Refrain from putting emotional pressure on fellow human being > of course

    You are welcome.

    Your question raises questions as to how much own research you had done before posting > is this a personal comment re a fellow human being? > Is this an eg of a civil debate?

    or how about this one > 99% (buy) tips are rubbish > another personal comment re a fellow human being? > another eg of a civil debate?
  • I had a brief “conversation” with arjungaur in the Bond Platform thread. With gay abandon he piles on one strawman argument after another and throws insults about as though they were confetti.

    Brian Clough once famously offered some profound advice:
    "Don't argue with idiots. They'll bring you down to their level and then beat you with experience."
  • Most of us just ignore him ,he' shows a total lack of respect for other posters Let's keep the good help full advice going for the rest of us.
  • edited November 2019
    Don't argue with idiots. They'll bring you down to their level and then beat you with experience > So i should stop arguing with you then i guess?

    Most of us just ignore him > who is us > u are u

    folks cheer up, stop sulking and let's make some money together ; )
  • Remember Cloughie well, for all the 42 days we had him !!
  • Arjungaur, Any good tips or information on UK fixed income securities would be very welcome. Some of us are grey haired (fortunate to have some), who are looking for a safe home for our pension / investment money pots without taking too much risk, and if possible providing a yield of between 4 to 5 % on average. An occasional small capital gain would be nice.
  • edited November 2019
    grey hair > emotional pressure

    i don't have any inside tips or crystal ball information, i am just like you or anybody else, 99% that is, there is 1% difference on how are brains are wired and how our experiences shape up the firing format for our neurons, which is great so that best ideas win out and not some macho physical aggression, in terms of not taking too much risk, this comes to mind - https://www.linkedin.com/pulse/diversifying-well-most-important-thing-you-need-do-order-ray-dalio/

    in terms of working together, this should help move things along -

  • Looks like the CMA have accepted undertakings to diminish rather than a referral. Court hearings set for early March. Bye, bye Enterprise.
  • Been advised this evening that all our holdings are being repaid on 5th March. Sad to see these go as all bought a long while ago below par. Irreplaceable at this time. Very sad.
  • Very difficult to know where to invest in these turmoil times, perhaps cash or gold is best at present.
    Recently sold all of my Banking/Insurance Preference Shares / Debt securities, very concerned to any exposure, plus the possible threat of future Inflation.
    Any war of any sort could produce higher inflation, but at a time of low interest rates.
    Industry unable to manufacture due to "lockdowns", "availability of purchased ingredients / parts / materials", transportation difficulties (in & out)
  • Principle and interesting arriving in our accounts. Think we will leave univested for the time being.
  • Hard to know where to allocate cash with all that's going on. Trouble is that it doesn't earn anything sitting in broker's accounts.

    Bought some more BBYB on Wednesday at 102.355 - only a few months to run but annual equiv yield in excess of 7.5%. I think I must own one of their JCBs now ;-) Not a recommendation.
  • edited March 6
    This is actually the most straight forward time to invest, stocks, there is a 10-15% discount sale and i am putting my money where my mouth is - https://www.etoro.com/people/arjungaur/portfolio

    You wanna be diversified and you wanna be equal weighted -

    https://www.forbes.com/sites/investor/2016/07/18/cap-weighted-versus-equal-weighted-which-approach-is-better

    Also you wanna be large cap in the second half of cycle. After the recession like in 2008, people are wary of stock markets, governments, large corporations and businesses, they go local and it is easier for small and mid caps to grow quickly in an economy rebounding. However in the second half, large caps take over when it's time for mergers and acquisitions, cost cutting, brand name recognition etc. In fact when i speak to people, i get this a lot, i sold my business and then invested in apple, google etc and now i've doubled my money. The same story played out after 2001, 1991, 1982, 1974 and the list goes on. Other people are doing something similar -



  • edited March 6
    Of course there is a counter argument to the above and that it would be both risk-reducing and return-enhancing to consider adding gold to one’s portfolio -

    https://www.linkedin.com/pulse/paradigm-shifts-ray-dalio/
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