Do you mean Bonds or Debentures.
If its debentures you have to keep them until maturity.
Only the bonds can be traded.
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Hi QOH,
My understanding is that the bond holders are NOT covered by the govt guarantee.
The security of the SCF030 bonds is strong due to them maturing ahead of Oct 2010 and hence the liquidity of SCF is still strong up to that point, but the SCF020 and SCF010 bonds are later, and as such I can't see how they can be covered.
It has always been my belief that they are not covered, and the market seems to agree in that they are yielding more than 20% pa.
Alan.
Alan .... sort of consensus opinion is that coupon payments on the SCF010 and SCF020 are guranteed up to Oct 2010 and that coupon payments after this date are not ... and that the capital repayment of both is not guaranteed, because they mature after october 2010
Is that how you see it? rather than just a big NOT
But essentially a NOT because no government guarantee at getting your capital back
Hi Winner,
Yes.
I had not considered the interest credited prior to Oct 2010 specifically, but I guess it might be (I'd have to go read in detail to be sure).
However, the bulk of the value is in the capital, and I am pretty sure that is not covered.
The other thing that might change this, is IF they got into the extended guarantee scheme, then the terms of that might be different. However, at this stage, I would be suprised if SCF got in to the EGS come Oct 2010.
Alan.
Hi Balance,
What are the (bulk of the) related party transactions that come to more than 100% of capital?
Can you list them with approximate values (no-one to hold you to it if out a bit - I am just trying to get a ball-park idea of what they have to do)?
Thanks,
Alan.
Hmmm, spending 5 seconds thinking about it leads us to the conclusion that this is a bit out of date (it was updated for the 30 Jun 2009 accounts), in that the equity was just increased by $150m, giving an adjusted calc of $230m / $(225m + 150m) ~ 60%.
ALso, I think that HNZ is now a subsidiary, not a related party (?), so that means, ceteris paribus we now have:
($230m - $19m) / $375m ~ 56%
Reducing the RPTs from 56% to 15% by refinancing them elsewhere would lead to a cash inflow to SCF of about 40% of equity (another $150m).
If you are interested in the true position, probably a look at the latest (31 Dec 2009) financials would be instructive as to what it might be today.
Alan.
Out of date? That's putting it mildly!
SCF is still using accounts from 30 June 2009 to raise money from the public - accounts we now know to be grossly inaccurate. Note that SCF has had to provide for another $180m of losses and impairments in its latest accounts - less than 4 months after it released its prospectus to the market in October 2009. No wonder Forsyth Barr and SCF other advisors have not been able to find investors to put capital into SCF.
Your numbers are similarly grossly inaccurate - just hope you have not been using numbers like them with seconds of thinking to make investment decisions!
You have not accounted for the $155m loss for 6 months to 31 Dec 2010.
So equity = $225m - $155m loss + $153m 'equity injection" = $223m.
15% of $223m = $34m. SCF has a long long way to go to meet the 15% related party criteria to qualify for EGS.
The question is "Are the bonds covered by the guarantee if SCF goes under before Oct 2010?"
That's the impression given by some out there to give comfort to investors who have been sold the bonds by them.
When confronted to give a straight answer and in writing, they suddenly become very quiet.