Bonds

[Glenorchy]

No, I got what i wanted

That's good. Do you mind if I ask what broker you are with? As I'm looking to change it has been interesting lately seeing different results and scalin via different brokers for HGH, Manawa etc and I'm starting to think the broker you're with rather matters when putting your hand up for these things

[mcdongle]

have pmd you

[kiwi2007]

I put my hand up for a few too. Were you guys scaled? As I only got 60% of what I asked for. Seems it was popular.

Got all I asked for.

[Basil]

I got 58% of what I applied for through Jarden.

[Glenorchy]

Thanks Kiwi and Basil. It seems some brokers weren't scaled at all and others were scaled quite a lot. I guess I'll have to give some thought to who I purchase bonds through although Jarden's were a joint lead manager so there goes my theory that applying through a lead manager might be a better strategy   

[Raven]

Opinions on the new Napier Port bonds?

[mcdongle]

Opinions on the new Napier Port bonds?

Im not too keen on this one,  But thats just me.

[Glenorchy]

Opinions on the new Napier Port bonds?

ASB has a pretty good credit rating and issued it's last 5 year fixed rate bond at 5.5% so I"m not sure bonds that pay less are attractive for me but I hear this will be very popular and oversubscribed so clearly a lot of people are putting their hands up. I'm old enough to remember the last time we lost control of inflation ( I think most people in most countries are all still being too optimistic about how quickly that peoblem gets solved) so I'm keeping some powder dry I think we have some way to go and more offers will arrive.

[mcdongle]

This is Bonds and Banking but on another level..

https://www.reuters.com/world/asia-pacific/australias-central-bank-has-equity-wiped-out-by-billions-bond-losses-2022-09-21/

[Glenorchy]

I see Kiwibank is going to be bringing a 5 yr note to the market next week. Interest rate 5.5%+ A rated. Quite similar to the ASB offering.

I have done a lot of reading over the weekend and I'm feeling less certain than I was (and I wasn't very certain before)  it does look as if inflation may go higher than has previously been projected. ANZ's Zollner is now saying OCR will go to 4.75 I don't know if it will or not our bank economists don't have much of a track record for getting anything right but if it does then you'll be able to get 5.5+ for a year in the bank on a pie term deposit before long. This is making me pause a little on the bonds. They're a small part of my portfolio less than 15% currently but perhaps I'll just keep it that way... mulling it over.

[Basil]

I'm hitting pause on bonds as well.    Who really knows where interest rates go from here ?

[mcdongle]

I looked at the Kiwibank bonds as well, But this put me off.

Kiwibank does not intend to quote these Notes on a
market licensed in New Zealand but they will be
able to be traded through dealers on established
'over-the-counter' markets. This means that you
may be able to sell them through dealers on
established 'over-the-counter' markets before the
end of their term if there are interested buyers. If
you sell your Notes, the price you get will vary
depending on factors such as the financial
condition of the Banking Group and movements in
market interest rates.

Page 2 of the key Information summary..

[kiwi2007]

Hi, does anyone know what the tax situation is on bonds that are bought 'under par?' Is the capital gain taxed when they are redeemed or you sell them for more than you paid? Thanks.

[Ferg]

Hi, does anyone know what the tax situation is on bonds that are bought 'under par?' Is the capital gain taxed when they are redeemed or you sell them for more than you paid? Thanks.

I'm not an expert in this field but I believe they are classified as a financial arrangement and any discounts on purchases that are held to maturity are subject to tax:
https://www.ird.govt.nz/income-tax/income-tax-for-businesses-and-organisations/types-of-business-income/interest-and-dividends/financial-arrangements-rules
Although that link talks more about methods rather than bonds per se.

[kiwi2007]

Thanks Ferg. That makes sense. Cheers.