Incitec Pivot Ltd T.IPL

RE:RE:IPL (HY) FF-29 6.875%26MAR79

[rfguysd]

I  have  a similiar one   6,625% 19nov79.   I  watched it closely over  the last  year.  In April 2020 , it was priced in the mid70 .   I  purchased this income vehicle   at  $100  in Nov2019.  Price  is  currently  at  103.00.   It  has  paid  its  interest due on the  dates indicated.  However,   I  have watched  how  this vehicle's price has  performed  over the COVID  period with respect  to other bonds I  have.  The  swings  in bond price  have  been  much more exaggerated than  other bonds.   I  believe the reason fornthe volatile  swings  are  due to the fact  that: 
1)  the  interest  payment  may be  deferred if IPL  is unable  to allocate funds for payment.  Remember when IPL  cut  the dividend .... that  spooked  holders  into thinking  interest  may  not be  paid on  the  vehicle.  
2)I seem to recall  that in the case of IPL  closing up  shop........  holders  of  this  bond  are  not  treated like  regular  bondholders  but  are treated below bondholders.... ie  paid out after regular bondholders.    
This is why  these income vehicles   are trading  differently  than  bonds.   You  would think  with a  coupon of 6.625%,  the vehicle price  would  be close to  $125   so  that the yield would be around  3%?    

When  IPL's  financials  become  more  stable......  I  am sure this  income vehicle  will be priced at 125.    Good  capital  gain  for  sure.   GLTA