Pibs as part of a balance income portfolio

OBG

The term bond ladder is unfamiliar to me.

Can anyone explain please.

Alexland

OBG wrote: »

The term bond ladder is unfamiliar to me.

It's basically entering into multiple fixed term saving products (but avoid investment mini bonds) with offset maturity dates such that you are getting the benefit of long term interest rates on some of the money while also having periodic access to a proportion of the money as individual products mature.

Alex

OBG

I have several corporate bonds with varying maturity dates. So I probably already have a foot on the ladder!

My original question was to find information on Pibs ratings, perhaps now the question should be where to find information on bond ratings.

Thanks

AnotherJoe

OBG wrote: »

The term bond ladder is unfamiliar to me.

Can anyone explain please.

Split your money 20% into a 1,2 3,4 and 5 year bonds.
When the 1 year matures, put it into a 5year. Same for subsequent. After5years you are getting 5 year rates but have 20% each year you can access should you need to,

Thrugelmir

OBG wrote: »

The example is not hindsight.

This investment has to be put into context.

My mother has had Leeds 13.7/8% Pibs since the early 1990's bought at 120p.

Totally different interest and inflationary enviroment.


Currently trades at around £203 buy, £196 sell per £100 of nominal stock . (That's a 3.4% spread). With an yield of 6.74%.

As interest rates in the future, price will drop (as will the case for bonds generally).

OBG

Yes, the figures in 2019 are nowhere near as compelling.