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New Enquest Retail Bond 9% Due 2027

Gilts, bonds, and interest-bearing shares
Wozzitworthit
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New Enquest Retail Bond 9% Due 2027

#490224

Postby Wozzitworthit » March 30th, 2022, 9:40 am


88V8
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Re: New Enquest Retail Bond 9% Due 2027

#490246

Postby 88V8 » March 30th, 2022, 10:18 am

With the option to switch from the existing 7% PIKs.
Hmmm.

V8

Laughton
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Re: New Enquest Retail Bond 9% Due 2027

#490276

Postby Laughton » March 30th, 2022, 11:09 am

As you say, Hmmm.

For those exchanging existing ENQ1 there's an additional sweetner of £0.015p per £1 nominal and they say
in addition to any accrued but unpaid interest payable on the Existing Notes, to, but excluding 27 April 2022
".

Interesting as for the past couple of years purchasers haven't been charged and buyers haven't been credited with "accrued" as they've been treating them more like a share.

88V8
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Re: New Enquest Retail Bond 9% Due 2027

#490533

Postby 88V8 » March 31st, 2022, 10:49 am

Laughton wrote:Interesting as for the past couple of years purchasers haven't been charged and buyers haven't been credited with "accrued" as they've been treating them more like a share.

Yes, and unless one remembered to declare the PIK they've been effectively tax-free.

All 254 pages of the prospectus are available here https://www.enquest.com/investors/corporate-actions/retail-bond plus a 14 page summary booklet.

I feel comfortable about oilies in general as regards the PoO for the next few years.
The 9% coupon is currently adequate, but in a world of rising rates may prove less so over the period to 2027.
I expect they will initially trade at about 115% so imho worth subscribing to the offer, which I shall, assuming that ii or HL make them available. I imagine that as a PIK holder I will receive a corp action.
The issue is open-ended, so we should get a full allocation.
How long they're worth holding, well we'll have to see.

V8

Wozzitworthit
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Re: New Enquest Retail Bond 9% Due 2027

#490542

Postby Wozzitworthit » March 31st, 2022, 11:08 am

The RNS states


The initial authorised offeror is Hargreaves Lansdown Asset Management Limited

I'll believe this when I see it - previously they have been late on the scene or only participated if one asked them , although this time they appear to have been properly nominated !

I saw somewhere in all the bumpf that this is a retail offering only because the existing notes are retail (my "only")

Woz

hiriskpaul
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Re: New Enquest Retail Bond 9% Due 2027

#490810

Postby hiriskpaul » April 1st, 2022, 11:20 am

The offer is in line with my expectations for refinancing, coupon uplift with an exchange fee. I am inclined to accept the offer, but unsure whther I want to convert all of our bonds as we have a big position and I don't want as big an exposure to a small highly indebted oil company for something maturing in 5 years, even if it does come with a 9% coupon. On the other hand I would miss out on the 1.5p Exchange Fee if I do not convert. FWIW the online dirty price of the 7% PIKs is 100.57 for 20k nominal. Online buy price is 102.6 and I can only get quotes for small amounts, up to 2k nominal.

I am not nearly as optimistic as 88V8 on the secondary market price of these, but we will see. Let's hope he is right!

Nothing horrible in the prospectus as far as I can tell. No gotchas in the bond terms anyway. I note that they do have a call option, but not an unreasonable one:

(c) Redemption at the option of the Issuer: The Issuer may, on giving not less than 30 nor more than 60 days' notice to the Noteholders in accordance with Condition 16 (which notice shall be irrevocable) and to the Trustee, redeem, at its option, all but not some only of the Notes at any time at the Optional Redemption Price specified below together with interest accrued to, but excluding, the date fixed for redemption of the Notes:
"Optional Redemption Price" means:

(i) if the Optional Redemption Date falls on or after 27 April 2024 but before 27 April 2025, 104 per cent. of their principal amount;

(ii) if the Optional Redemption Date falls on or after 27 April 2025 but before 27 April 2026, 102 per cent. of their principal amount; and

(iii) if the Optional Redemption Date falls on or after 27 April 2026, 100 per cent. of their principal amount.


No sign of a corporate action from HL yet.

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Re: New Enquest Retail Bond 9% Due 2027

#490813

Postby GoSeigen » April 1st, 2022, 11:33 am

Laughton wrote:As you say, Hmmm.

For those exchanging existing ENQ1 there's an additional sweetner of £0.015p per £1 nominal and they say
in addition to any accrued but unpaid interest payable on the Existing Notes, to, but excluding 27 April 2022
".

Interesting as for the past couple of years purchasers haven't been charged and buyers haven't been credited with "accrued" as they've been treating them more like a share.


The issue of accrued interest depends on the actual circumstances. If a coupon is paid, income tax is due on the accrued interest at the time of the transaction. If no coupon is paid then the issue is in default and accrued interest is moot. EDIT:There is absolutely no sense in which these have been treated like a share: they are 100% debt. In fact the coupon has been paid in kind and I can't remember what the implications of that are for the Accrued Income Scheme. If Fools hold these in a taxable account I suggest they refer to the HMRC's AIS documentation. [Aaargh! spelling...]

GS

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Re: New Enquest Retail Bond 9% Due 2027

#490836

Postby Laughton » April 1st, 2022, 12:48 pm

Yes, I'm sorry. I only meant it was being treated like a share insofar as the buyer was not having to pay the accrued and the seller was not receiving the accrued.

formoverfunction
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Re: New Enquest Retail Bond 9% Due 2027

#490863

Postby formoverfunction » April 1st, 2022, 3:13 pm

Open now, I've placed my order with HL.

stevensfo
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Re: New Enquest Retail Bond 9% Due 2027

#491053

Postby stevensfo » April 2nd, 2022, 11:47 am

formoverfunction wrote:Open now, I've placed my order with HL.


I can't see anything yet on ii.


Steve

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Re: New Enquest Retail Bond 9% Due 2027

#491069

Postby 88V8 » April 2nd, 2022, 12:47 pm

stevensfo wrote:
formoverfunction wrote:Open now, I've placed my order with HL.

I can't see anything yet on ii.

ii say they will be raising a corp action for holder of the PIKs 'when they receive details'.

I didn't ask about buying the 9s if one is not a PIK holder.
I could buy some at HL, but like hirisk, I would be wary of holding them full-term.

V8

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Re: New Enquest Retail Bond 9% Due 2027

#491783

Postby Laughton » April 5th, 2022, 10:54 am

New 9% bond now available via Primary Bid.

Not sure what, if anything, that says about take up from existing holders. Probably not much as neither iDealing nor HL have been in touch re my existing holdings and nothing shown yet under Corporate Actions on either site. Par for the course in respect of HL but iDealing normally a bit more on the ball.

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Re: New Enquest Retail Bond 9% Due 2027

#491799

Postby hiriskpaul » April 5th, 2022, 11:39 am

If someone wants to buy the new 9% bond it may be a cheaper to do it by buying the 7% and then accepting the exchange offer.

I just tried a dummy trade at HL for 10k nominal of the 7%. The price quoted was 101.99 (dirty price). Together with HL's £11.95 dealing fee that came in at £10210.95. 10k nominal on acceptance of the conversion offer will result in the payment of £150 exchange fee. In addition, accrued interest will be paid up to but excluding 27 April. I am a little uncertain what the interest accrual period is for the 7%, but the previous 2 payments were on 17/2/22 and 18/08/21, so I think this accrual period will run from something like 17 February to 17 August, 181 days, with 69 days until 27 April, which works out at about £133 of accrued per 10k nominal. Deducting the exchange fee and accrued from the cost of buying 10k nominal gives about £9928.

I am not doing this because I already have a position as big as I am comfortable with, but anyone wanting the 9% might want to consider it as an alternative to buying the 9% through their brokers.

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Re: New Enquest Retail Bond 9% Due 2027

#491814

Postby Wozzitworthit » April 5th, 2022, 12:07 pm

Paul,

Thanks for that

I did a mental calculation at the end of last week and thought that the price for buying ENQ1 was about right

However, doing the sums properly, as you did, the saving on 10,000 is worth it, (can buy a tank of diesel with that !)

So, I bought 10,000 (already have some ) and then we looked at getting 15,000 for my wife - the price for that was 102.247 - but for 10,000 it was 101.99 so we stuck with the lower figure (she already has a load as well)

3 more possible advantages, (1) saves waiting for HL to put this up on their website (why do they take so long ?), (2) will get the interest crystallised and paid a bit before the next ENQ1 payment date and (3) maybe ensure we actually get the number we want rather than perhaps being scaled back

(Not that we will end up holding them all to the bitter end I'm sure)


Woz

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Re: New Enquest Retail Bond 9% Due 2027

#491816

Postby airbus330 » April 5th, 2022, 12:15 pm

@wozzitworthit
Assuming you did this via HL, did the Corporate Action button appear as soon as the allocation showed on your account?

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Re: New Enquest Retail Bond 9% Due 2027

#491824

Postby Wozzitworthit » April 5th, 2022, 12:30 pm

airbus330

Did both via HL

Didn't notice anything at the time and just gone back in to check - nothing showing

However, in both cases we were adding to existing holdings - so perhaps that is why there were no alerts ??

Woz

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Re: New Enquest Retail Bond 9% Due 2027

#491829

Postby Laughton » April 5th, 2022, 12:48 pm

Do you have an alert re existing holding? Nothing showing on mine as of now.

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Re: New Enquest Retail Bond 9% Due 2027

#491842

Postby Wozzitworthit » April 5th, 2022, 1:21 pm

I can't honestly say for us - I don't think so

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Re: New Enquest Retail Bond 9% Due 2027

#491892

Postby airbus330 » April 5th, 2022, 4:19 pm

Too much faff for my smaller amount.Just bought direct from HL. Hopefully not going to get scaled back.

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Re: New Enquest Retail Bond 9% Due 2027

#491931

Postby geoffp » April 5th, 2022, 6:38 pm

Nothing on the Interactive Investor website about the exchange offer yet. Has any existing holder on any platform heard anything?


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