Provident Financial 7% 2020 Corporate Bond

purch

No it won't on this

Oh how generous of them :A

strawberrylane

Actually it probably is quite generous of them (well, maybe not generous but surprising perhaps) given that they probably could have got away with charging this fee due to the lack of proper research and understanding that many who invest in this will have.

carolroy52

purch wrote: »

From the same part of the curve...

Tesco 5.5% 13th Dec 2019
BT 8.625% 26th March 2020

both better rated that this piece of paper.

There are literally hundreds of Bonds on issue, not all accessable in small amounts to retail investors, but all tradable in £10k amounts.

What worries me is that suddenly this company (H&L) is pushing a single Corporate Bond, that purely by coincidence they are the brokers for the issue.

They have never to my knowledge 'recommended' a single Corporate Bond for Investment to their customers, but now they are just pushing this one particular issue.

And it is quite obvious my the interest shown in this security on this forum that there will be thousands of people who know absolutely nothing about trading in fixed interest securities who will invest.

There are many people ( it appears) who have no knowledge of these securities, and no experience of them, and who have never had any interest whatsoever in directly investing in them, who now are being enticed into buying a sub-investment grade Bond.

That will mean that the issue price is higher than it would otherwise be, meaning that Provident Financial are able to get the issue away at a higher price and subsequently lower yield to themselves.

The winners will be Provident Financial who will be able to borrow money at a lower cost than their credit rating deserves.

I wonder why H&L are pushing this issue so strongly.

There can't be anything in it for them can there :eek:

Hi Purch
Can you sell part of a bond holding? E.g. £4k out of a £5k holding? Thanks for all the information you have put online. I purchased this from HL and have it in my SIPP.

Regards
Carol Roy

purch

Yes you will be able to sell part of your holding as the Bond was issued in denominations of £ 1

Once the market for this security has developed (maybe 6 weeks or more) prices in smaller amounts will be reasonably easy to obtain.

The Bond is now trading in the secondary market and is at a premium to it's Par issue, (my Bloomberg terminal shows 103.00/103.75) which indicates demand was very high. You already have a profit (if you chose to sell).

LardyCake

@carolroy - these trade on the LSE Retail Bond platform:
http://www.londonstockexchange.com/traders-and-brokers/security-types/retail-bonds/retail-bonds.htm

Details of PFG7:
http://www.londonstockexchange.com/exchange/prices-and-news/retail-bonds/company-summary.html?fourWayKey=XS0496412064GBGBPUKCP

carolroy52

Hi LardyCake

Thanks for this information. I've had a SIPP for a few years now but, for various reasons, have only just started to invest in anything other than cash. I'm learning as I go so I find this site really useful.

Thanks again.
Carol

mroller

it looks like the friends provident deal was a good one after all