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Hi Aaron
I been buying bank preference shares as a replacement for term deposits.
Find them under bonds
TIckers
BNZHA 7.3%
BNZHB 7.28%
ANZBHD 7.6%
or
QHLHA 6.4% Quayside are BOPcouncil investment arm…own POT
Still has some risk but if the banks all get in trouble there probably big trouble elsewhere
DYOR before investing
Last edited by Perky; 15-08-2024 at 07:53 AM.
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Member
Can anyone explain the maths of why IFT330 are quoted as price per 100 $104.320 which is a 4.3% increase on issue price but also quoted at yield of 5.98% vs coupon rate of 6.9% which would indicate an increase of
((6.9 / 5.98) - 1) * 100 = 15.3%.
This formula seems reasonable to me because if yield had halved it would give 100% increase which seems right.
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![Quote](images/misc/quote_icon.png) Originally Posted by Nor
Can anyone explain the maths of why IFT330 are quoted as price per 100 $104.320 which is a 4.3% increase on issue price but also quoted at yield of 5.98% vs coupon rate of 6.9% which would indicate an increase of
((6.9 / 5.98) - 1) * 100 = 15.3%.
This formula seems reasonable to me because if yield had halved it would give 100% increase which seems right.
Maturity 2029. THats 5 years. Yield is quoted till maturity and worked out on a DCF situation.
You pay 1.043 now, get 1.00 in 5 years time and every year get $6.9% per note.
That probably works out to a yield of 5.98% if you pop that in excel.
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![Quote](images/misc/quote_icon.png) Originally Posted by Perky
Hi Aaron
I been buying bank preference shares as a replacement for term deposits.
Find them under bonds
TIckers
BNZHA 7.3%
BNZHB 7.28%
ANZBHD 7.6%
or
QHLHA 6.4% Quayside are BOPcouncil investment arm…own POT
Still has some risk but if the banks all get in trouble there probably big trouble elsewhere
DYOR before investing
I have been doing something similar as existing term deposits mature. I don’t want to buy more ordinary shares, and may need some cash at uncertain date in about a year or two and figure selling preference shares and bonds would be (cheaper and) easier than breaking a TD if necessary.
Last edited by Bjauck; Yesterday at 03:02 PM.
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![Quote](images/misc/quote_icon.png) Originally Posted by Bjauck
I have been doing something similar as existing term deposits mature. I don’t want to buy more ordinary shares, and may need some cash at uncertain date in about a year or two and figure selling preference shares and bonds would be (cheaper and) easier than breaking a TD if necessary.
Serious question, are there real penalties for breaking term deposits?
If banks were smart they would allow the breaking of TD's and price it just like a bond would be priced if interest rates change.
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![Quote](images/misc/quote_icon.png) Originally Posted by blackcap
Serious question, are there real penalties for breaking term deposits?
If banks were smart they would allow the breaking of TD's and price it just like a bond would be priced if interest rates change.
You can give notice 31 days I think . Say it us a 2 year TD & you cut out at say 6 months .They will give you a haircut , generally give you what the 6 month rate would have been .
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