Thanks...will take a look later in the day.
I had a really good go at this on the weekend. The paucity of volume on most days means one must place a lot of emphasis on the days when there is somewhat reasonable volume. I am happy with my work and arrived at a conversion price of $2.945 based on data to date. Happy to be corrected if someone can get access to actual VWAP data since 1 July.
Turners new bonds indicative 5.5% pa bloody good value compared to Z’s miserly 4.0% pa ..but then Turners seen as heaps more risky
But then the way Orr is carrying on 4% might be seen as the the bargain of the century
Bond conversion price would have dropped a tad more yesterday
I wonder what is best for the SP of the company ?
All bondholders to convert ?
All bondholders not to convert ?
Or maybe it’s neutral given the new bond offer which wii be possibly taken up by existing bondholders who do not convert ?
I guess the question is - is it better for them to have more equity or more loans on the balance sheet? Any conversion will reduce their leverage, which is good if you feel that they carry currently too much debt. Obviously - it means as well dilution, which is not necessarily good for existing share holders.
If the new bond pays 5.5%, than a low conversion rate would be good for shareholders if the company makes in average more than 5.5%, which they do. I.e. following this argument a low conversion rate would be good for existing share holders and the share price.
On the other hand could a low conversion rate point to limited investors confidence in the share price of the company (otherwise - why would you not convert) - I.e. a high conversion rate would point to high confidence, which again is likely to push the share price up.
No matter what it is - it might be seen as a win-win as well as a lose-lose :confused:.
In reality I think the conversion rate will be somewhere in the middle ... and it should be all good.