14% return on ICICI 2010 bonds.

eeja

For those with confidence that ICICI, India's largest commercial bank will not go bust in the next 14 months you can buy their 6.25 % bond on the market at around 90 which will give you a net return of 14 percent. No currency risk as this is a sterling bond.
To repeat : only for investors confident that ICICI will not go belly up before May 2010 when the bond is redeemed. Investors who have no confidence in ICICI should not even consider this corporate bond.

chookie1

eeja wrote: »

For those with confidence that ICICI, India's largest commercial bank will not go bust in the next 14 months you can buy their 6.25 % bond on the market at around 90 which will give you a net return of 14 percent. No currency risk as this is a sterling bond.
To repeat : only for investors confident that ICICI will not go belly up before May 2010 when the bond is redeemed. Investors who have no confidence in ICICI should not even consider this corporate bond.

I presume this is a corporate bond rather than a savings product so the health warning would be that if ICICI goes bust, then you take your place in the creditors queue and might not get anything back.

I wouldn't pass judgement one way or another on ICICI - don't know enough - but you don't get that kind of return for no risk.

Lokolo

He does say in his post its a corporate bond...

chookie1

Lokolo wrote: »

He does say in his post its a corporate bond...

True, true

Only point I'm trying to make is that you could make this argument for no end of other companies - it's just that banks have "bonds" that are really savings products and therefore underwritten to a degree by the FSCS

neil324

eeja wrote: »

For those with confidence that ICICI, India's largest commercial bank will not go bust in the next 14 months you can buy their 6.25 % bond on the market at around 90 which will give you a net return of 14 percent. No currency risk as this is a sterling bond.
To repeat : only for investors confident that ICICI will not go belly up before May 2010 when the bond is redeemed. Investors who have no confidence in ICICI should not even consider this corporate bond.

Thanks but i'll stick with the 7% for 2 years deposited with ICICI which is fully insured by the FSCS. Which in turn is funded by other banks and the tax payer......ie you :beer:

neil324

Lokolo wrote: »

He does say in his post its a corporate bond...

That's not his point.

Rafter

Which begs the question: Why if the market expects 14% return on ICICI debt is the FSA still allowing them to take deposits from savers in the UK, to be bailed out by the tax payer or other savers if it does go horribly wrong.

R.

chookie1

Rafter wrote: »

Which begs the question: Why if the market expects 14% return on ICICI debt is the FSA still allowing them to take deposits from savers in the UK, to be bailed out by the tax payer or other savers if it does go horribly wrong.

R.

Certainly you'd hope that the FSA would make sure that they had enough money ringfenced in their UK subsidiary that it could effectively carry on, even if the Indian head office blew up.

That would be sensible, so I'm sure that's what the FSA do..... err.....

cocktail

sounds good. worth a punt is i suppose.

eeja

Worth adding that there is also a large tax saving for most people if you buy now at 90 and sell just before redemption.
Provided it is within your capital gains tax allowance, the profit between 90 you pay for the bond and the 100 you get on redemption would not be taxable for most UK resident investors .
Of course if you made a habit of this as Norman Wisdom did in the 60's with silver you could be deemed a trader and be charged income tax !
ps is the wonderful old comedian still alive ?
WARNING : Only for those confident about ICICI.

tradetime

FWIW Marc Faber, names them as worth buying stock in, he of the "Boom, Doom, and Gloom Report" So not a chap to go throwing buy recommends around rashly.