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question about Premier Oil Bonds?

Gilts, bonds, and interest-bearing shares
hiriskpaul
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Re: question about Premier Oil Bonds?

#280295

Postby hiriskpaul » January 27th, 2020, 12:51 pm

I got the corporate action notification through from HL today. Details are as previously noted, but they do not mention the 0.75% repayment fee:

The interest rate of the Bond will increase from 6.5% to 8.85%
The Maturity Date of the Bond will be extended from 31 May 2021 to 30 November 2023
An Amendment Fee of 0.25% will be paid to all Bondholders, whether they vote or not


I will hold for now and vote in favour. Hopefully we will see a bounce when this goes through, but maybe not the way oil is going at present...

Edit: This part is interesting:

Important: If you submit a vote in respect of the Scheme you are confirming that you will continue to hold your Bonds until the Record Time of the Scheme has passed (5:00pm on Monday 10 February 2020).


Will hold off voting until the 4th of Feb, just in case!

hiriskpaul
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Re: question about Premier Oil Bonds?

#283797

Postby hiriskpaul » February 12th, 2020, 2:15 pm

Resolutions passed at Scheme Meetings: https://www.londonstockexchange.com/exc ... 20774.html

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Re: question about Premier Oil Bonds?

#289439

Postby hiriskpaul » March 9th, 2020, 4:42 pm

20% down today (equity 54%). Looks like I did the right thing selling half in February, even if it was for the wrong reason. Just a shame I talked myself out of selling the other half!

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Re: question about Premier Oil Bonds?

#289626

Postby spasmodicus » March 10th, 2020, 11:30 am

20% down today (equity 54%). Looks like I did the right thing selling half in February, even if it was for the wrong reason. Just a shame I talked myself out of selling the other half!


it all boils down to whether Premier can ride out a period of sub $40 oil prices. They are maybe reconsidering their plans to increase their borrowings to make further production acquisitions, but hey, they can pick these up on the cheap now. Also, they have hedged at least some of their output into the middle of 2020.
https://www.premier-oil.com/premieroil/media/press/trading-and-operations-update-28

Perhaps the Asia Research and Capital Management hedge fund, who opposed the debt expansion, will have now made a killing from their large short position on Premier debt and may now go long and announce that they changed their minds about court action?
https://www.thisismoney.co.uk/money/markets/article-7767747/Premier-Oil-target-record-132m-short-bet-Hong-Kong-hedge-fund.html

Anyway, I've still got some PMO1 which has running yield of over 8%, but I'm not sure whether the maturity date extension/rate hike that I voted for is going to happen, or not.

fun times!
S

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Re: question about Premier Oil Bonds?

#289666

Postby 88V8 » March 10th, 2020, 3:04 pm

Just bought some PMO1 at 75%.
Three orders for a quantity failed, then one for a ££ succeeded, very odd.

More interesting after 5th April when there is headroom in the ISA. Although of course if the market sweetshop is still open there will be so many other temptations.

V8

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Re: question about Premier Oil Bonds?

#290049

Postby 88V8 » March 12th, 2020, 9:58 am

Precipitate fall today. Now 50%.
Tempting to buy some more.

Enquest ENQ1 down from 50% to 40%.

Investment or a gamble. What would Buffett do? Mind you, he has a bit more cash than me :)

V8

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Re: question about Premier Oil Bonds?

#290107

Postby spasmodicus » March 12th, 2020, 12:05 pm

Investment or a gamble. What would Buffett do? Mind you, he has a bit more cash than me :)


...and me! We are in junk bond territory here, it seems. PMO1now at about 49.75(buy) on HL, lower than what I paid for them in june 2016. Looking into my crystal ball, the future trajectory of the oil price and with it Premier's and Enquest's fortunes is murky to say the least. However, the end of oil as we know it along with a price never again higher than the sustained $25 or less that was being forecast back in 2014. By 2016, when I bought those PMO1 I was wishing that I had moved earlier. Mind you, I also looked at PDVSA bonds, which were selling at around 30c on the dollar, but fortunately the difficulties for private investors to trade in them put me off and we all know how that ended!

Another question is - what would happen to the assets of a company like Premier if they did run out of cash? That would imply sustained OP below $35 for another year or so, until Premier's hedges expire. Normally there are buyers waiting in the wings for such things to happen, but the producing assets are basically almost worthless at that level when decommissioning is taken into account and these days the oil industry is such a pariah that I wonder who would take it on.

Difficult to say which is better (or worse). Both ENQ1 and PMO1 have similar running yields over 14%, with PMO1 maturing a year or so earlier for an almost 100% gain, if it lasts that long. I would classify both as gambles rather than an investments, but compared with betting on the Gee-Gees the odds are still not bad.
S

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Re: question about Premier Oil Bonds?

#290471

Postby 88V8 » March 13th, 2020, 11:19 am

RNS today https://otp.investis.com/clients/uk/pre ... id=1378624
I bought a few more PMO1 at 48%.

V8

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Re: question about Premier Oil Bonds?

#291510

Postby 88V8 » March 17th, 2020, 9:32 am

Premier Oil, the most shorted Co ... 21%
https://www.shorttracker.co.uk/

Bonds at 40% as per LSE.

Doomed, we're all doomed.

V8

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Re: question about Premier Oil Bonds?

#315595

Postby hiriskpaul » June 5th, 2020, 4:21 pm


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Re: question about Premier Oil Bonds?

#315674

Postby 88V8 » June 5th, 2020, 11:05 pm

Bit dilutive for the ords, but a nice jump for the bonds, albeit on what appears a very low volume.
Wish I'd been bolder with these. Hindsight, a great thing.

V8

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Re: question about Premier Oil Bonds?

#316358

Postby tournesol » June 8th, 2020, 12:02 pm

I've bought a few today. Looks to me like today's news increases the chance of the co surviving long enough to redeem the bonds.

That's all I need to worry about.

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Re: question about Premier Oil Bonds?

#335572

Postby tournesol » August 24th, 2020, 6:19 pm

There's a deafening silence about these. The recent RNS must surely increase the likelihood that PMO can continue as a going concern and that consequently the bonds will either be redeemed or will be enhanced. Or am I missing something?

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Re: question about Premier Oil Bonds?

#335720

Postby dspp » August 25th, 2020, 10:08 am

tournesol wrote:There's a deafening silence about these. The recent RNS must surely increase the likelihood that PMO can continue as a going concern and that consequently the bonds will either be redeemed or will be enhanced. Or am I missing something?



I don't know about any current news, and of course the long term background is that PMO are very indebted and have some dogs as well as some cows. However I did find it interesting to read this sentence in that RNS (https://www.londonstockexchange.com/new ... s/14566564) ,

"Premier has agreed to issue 82,164,064 new Premier shares, representing 8.91 per cent of the enlarged Group, to ARCM at a price of 26.69p/sh. This represents a 9.64 per cent discount"

In essence a large shorter has blackmailed a distressed company into awarding the shorter a 10% discount on 9% of shares. Nice gig.

What other shareholders (or bondholders, though they are senior) think about rewarding bad behaviour might be interesting to know.

regards, dspp

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Re: question about Premier Oil Bonds?

#335761

Postby hiriskpaul » August 25th, 2020, 11:41 am

dspp wrote:
tournesol wrote:There's a deafening silence about these. The recent RNS must surely increase the likelihood that PMO can continue as a going concern and that consequently the bonds will either be redeemed or will be enhanced. Or am I missing something?



I don't know about any current news, and of course the long term background is that PMO are very indebted and have some dogs as well as some cows. However I did find it interesting to read this sentence in that RNS (https://www.londonstockexchange.com/new ... s/14566564) ,

"Premier has agreed to issue 82,164,064 new Premier shares, representing 8.91 per cent of the enlarged Group, to ARCM at a price of 26.69p/sh. This represents a 9.64 per cent discount"

In essence a large shorter has blackmailed a distressed company into awarding the shorter a 10% discount on 9% of shares. Nice gig.

What other shareholders (or bondholders, though they are senior) think about rewarding bad behaviour might be interesting to know.

regards, dspp

If I was a shareholder I think I might be a little miffed. As a bondholder I am delighted with the capital injection and that the debt restructuring is now going ahead.

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Re: question about Premier Oil Bonds?

#336586

Postby tournesol » August 28th, 2020, 1:00 pm

Hi Risk Paul

Seconded!

I have a modest holding in the bonds and increased it following the recent news. Obviously the bonds come without the potential multi-bag upside attached to equity but it seems to me there is a reasonable probability that PMO will manage to survive and will find a way of redeeming these bonds next year. If so the return is quite attractive. Meanwhile dilution undermines equity but leaves the bonds unscathed and even enhanced in so far as the co's survivability is improved.

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Re: question about Premier Oil Bonds?

#336591

Postby hiriskpaul » August 28th, 2020, 1:13 pm

tournesol wrote:Hi Risk Paul

Seconded!

I have a modest holding in the bonds and increased it following the recent news. Obviously the bonds come without the potential multi-bag upside attached to equity but it seems to me there is a reasonable probability that PMO will manage to survive and will find a way of redeeming these bonds next year. If so the return is quite attractive. Meanwhile dilution undermines equity but leaves the bonds unscathed and even enhanced in so far as the co's survivability is improved.

I think it more likely the maturity date will be extended to 2025 with another uplift in coupon. If we are lucky with a fee paid and some more warrants!

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Re: question about Premier Oil Bonds?

#340352

Postby 88V8 » September 15th, 2020, 9:03 am

I see yesterday comment about Premier raising more equity;

.... Premier's first-half results were overshadowed by the balance sheet restructuring update, and in particular its plans to raise $530.0m equity - $300.0m more than previously expected....


This is in a sense old news, announced in August https://www.lse.co.uk/rns/PMO/refinanci ... zlt8p.html

The price of the bonds has been ticking downwards these last few weeks, albeit on low volumes.

BP's observations about 'peak oil' will not help.

V8


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