The Lemon Fool

Not sure I can see value in these IPF3 when trading around 12% ytm given the euro IPF 9.75 2025 trade at a ytm of around 16.25%. Either the euro are too cheap or the £ too expensive? I would be inclined to believe the euro is trading at correct levels given institutional investor base. The IPF3 would need to trade at around 86.00 cash px for a ytm of circa 16%. Am i missing something?

hostye wrote:Not sure I can see value in these IPF3 when trading around 12% ytm given the euro IPF 9.75 2025 trade at a ytm of around 16.25%. Either the euro are too cheap or the £ too expensive? I would be inclined to believe the euro is trading at correct levels given institutional investor base. The IPF3 would need to trade at around 86.00 cash px for a ytm of circa 16%. Am i missing something?

This has been discussed on the IPF2 thread at the time of the bond exchange offer to IPF3.

You are probably right that the institutional investors are more likley to have priced this correctly, although if you took a measure based on credit ratings the ytm should be lower.

But the euro bond carries FX risk and comes in 100k clips.

My view is that UK retail investors have so few bonds we can buy (unlike in Italy where it is commonplace) that supply/demand results in lower yields than they should be.

Regardless I own a few of these.

These read pretty well to me so happy to continue collecting the 11%+ income: -

https://www.londonstockexchange.com/new ... s/15856081

Yes, does look good. Might be worth a top-up. IPF2 (7.75% 14/12/23) is still available in reasonable amounts as well, just quoted 99.39 for 40k nominal. Quite good for a bond maturing in December. IPF3 was 100.55 for 40k nominal.

Just put in a Bed & ISA request with ii for IPF3.
Spread doesn't look too bad.
I only have 25k and with cash already in the ISA, I can move the whole lot.

At a 12% coupon, the most tax-effective option in my pfo, considering the different tax rates for dividend/coupon, and my tax band.

V8

88V8 wrote:Just put in a Bed & ISA request with ii for IPF3.
Spread doesn't look too bad.
I only have 25k and with cash already in the ISA, I can move the whole lot.

At a 12% coupon, the most tax-effective option in my pfo, considering the different tax rates for dividend/coupon, and my tax band.

V8

Obviously you have done your due diligence on this. Isn't 12% in the realms of "too good to be true"?

BullDog wrote:

88V8 wrote:Just put in a Bed & ISA request with ii for IPF3.
At a 12% coupon, the most tax-effective option in my pfo, considering the different tax rates for dividend/coupon, and my tax band.

Obviously you have done your due diligence on this. Isn't 12% in the realms of "too good to be true"?

Potentially. But it seems OK at the mo.

But then, I got wiped out on my holding of Woolworth. And Vanco. And IFL. And Speyhawk. And Interserve. And Carillion.
So better not take too many investment tips from me

V8

88V8 wrote:

BullDog wrote:Obviously you have done your due diligence on this. Isn't 12% in the realms of "too good to be true"?

Potentially. But it seems OK at the mo.

But then, I got wiped out on my holding of Woolworth. And Vanco. And IFL. And Speyhawk. And Interserve. And Carillion.
So better not take too many investment tips from me

V8

Thanks. Genuinely curious. I know nothing about this kind of thing. My natural reaction is to run a mile at a coupon in double digits.

I have my share of disasters too. Though no wipe outs since Marconi.

Thing is, these things are fine until the day they aren't. And then it's too late. All the best with it.

PS it reminds me of Wasps.

BullDog wrote:

88V8 wrote:Potentially. But it seems OK at the mo.

Thanks. Genuinely curious. I know nothing about this kind of thing. My natural reaction is to run a mile at a coupon in double digits.

PS it reminds me of Wasps.

Haha, they're a bit more solvent than Wasps, so far.

With a yield around 80% above staider offerings SKIP and BOI, I wouldn't put too much in here. Logically, I wouldn't have anything in here at all, it's not as if I need the extra income. I suppose we just have different ways of sating our risk appetite. Beats hang gliding....

V8

I like these too, but have only put 2.5% of my funds into them so am proceeding with caution.

IPF2 is still available for those who want their money back in December. I just purchased at 99.1 today, for a yield to maturity of 9.2%.

IPF2 is pari passu with IPF3, but they easily have the capacity to repay the outstanding £40m of IPF2 in December, so much lower risk as far as I am concerned.

I also hold IPF3, which I accepted in the IPF2 exchange. So-called subprime lending is risky of course, but I think the risks are overdone. Most borrowers repay without a problem. The main risks are in proper management of the business and this one seems prudent and sound.

Picked up some more IPF2 today for 99.575 (YTM 8.5%). Following the upbeat Q1 trading statement it just seemed wrong not to!

Half Year report out today - https://www.londonstockexchange.com/new ... t/16063883

Laughton wrote:Half Year report out today - https://www.londonstockexchange.com/new ... t/16063883

Impairment £ doubled and +50%
Hope that gets no worse.

Ords are up so the market seems happy.

V8

I listened to the presentation in the background (not the ideal way) so I may well have got it wrong but my understanding was that under new accounting reporting rules they have to account for impairments at the start of loans being made rather than under the "old" system where impairments were accounted for once actual impairment history was established.

So big impairments at the outset but bigger profits longer term as the impairments proved lower than accounting rules allowed for.

But, as I said, please check for yourselves as I may well have misunderstood.

Just wondering what people's thoughts on these are particularly on holding till maturity? Looks attractive ytm currently available to purchase for £100.65. Higher risk but appears stable.

https://www.fitchratings.com/research/n ... 21-09-2023

Fitch Affirms International Personal Finance at 'BB-'; Outlook Stable

Sold all my IPF3 yesterday.

I'm not liking the look of how long it's taking to publish the accounts in light of the Polish letter.

Gan020 wrote:Sold all my IPF3 yesterday.
I'm not liking the look of how long it's taking to publish the accounts in light of the Polish letter.

Thanks for the heads-up.
Doesn't sound too dire
"The group considers it prudent to take the time to understand the contents of the communication fully, and this work is expected to take around a week to complete, following which the results will be released", the company said in a statement.
The Polish credit card receivables represent just over 5% of the group's receivables and around 25% of overall receivables in Poland, International Personal Finance pointed out.

Poland.. a far-off country of which we know little.

V8

Reported today, headline results don't look to dire, could be a reduction of £10m in profits due to Poland in '24

The Board sound bullish, maybe a little too bullish, but I am not thinking of dumping my small holding of the '27's quite yet.

I am going to listen into the result presentation at 9', snooze through the first part and wake up for the questions...they might be quite fun.