Same as any bond anywhere in the world.
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If you bought these bonds today then capital gains would form a large proportion of your return even if rates stayed unchanged.
The bonds are trading at a discount because prevailing rates are higher than the coupon. The closer you get to maturity, all things equal, that discount will gradually dissipate (i.e. capital gains will accrue).
That's how yield to maturity works.
Correct, you don't "buy a 7.8% interest rate"
You're buying:
i) 2.3% interest rate (i.e. the "coupon"); and
ii) the paper at a discount to its face value (i.e. price of $80.47 compared to face value of $100).
The two together result in a yield to maturity of 7.73% p.a. if you bought today and held to maturity.
Ok they got theirs through ASB securities, depending how many you want you may have to wait. They got 200k worth and took 2 weeks.
Ultimately it's the same as buying shares but less liquidity. I see about 50,000 of the 20's have sold today.
If you want hundreds of thousands worth then maybe a broker can find a seller behind the scenes, but to buy via Jarden or whatever you just put your bids in and wait.
As for the tax doc, that's just a simple DCF model where you solve for the net present value to be zero and thus determine the discount rate.
That discount rate is used to determine the income for the tax year. I wouldn't get to bothered about that, the tax is exactly the same, you just pay it on $1 of income the same way as the next $1.
It's just a simple way of calculating the income by determining a yield.
But yes the bonds are there and available in hundreds of thousands of dollars worth at the quoted rates of return.
Agree with everything except assuming the 39% development margin is a new normal.
39% is a high water mark for development margin.
I mean, there's a chance we see 39% with The Helier etc but based on past performance but I wouldn't bank on it being the 'norm' or a baseline assumption.
Oceania have always guided to the long term 'norm' being more like 20-25%. I'd probably conservatively assume that in any forecast and consider anything more to be potential upside.
To play devils advocate on value, the market isn't concerned anymore about 'underlying profit' and 'development margin'.
These two metrics have been shown to be the emperors clothes with valuation focus in the sector squarely shifting to free cash flow generation.
Any speculation about takeovers etc etc needs to look at value through the free cash flow lens because that's going to be the prime concern of any potential purchaser, especially anyone in the private equity world.