Athabasca Oil Corp T.ATH

bonds trading at 46.00

[BLACKJACK86]

it keeps going higher,does it mean anything ?

[Chris007]

Last trade logged on finra is 39.25, YTM 122.022% https://finra-markets.morningstar.com/BondCenter/BondTradeActivitySearchResult.jsp?ticker=C819043&startdate=01%2F06%2F2020&enddate=01%2F06%2F2021 Where do you see 46? That being said, with WTI ticking upwards, yields should shrink, as cash flows improve and probabilty of refinancing increases

[ManitobaCanuck]

Sensible explanation , agree with you . Will this affect stock price too, WTI 51 now

[Primetime1]

Is there any practical way for a retail investor to actually buy these bonds? 

[Chris007]

Probably not with discount brokers, anyway. I'm with with TD and the only corporates I can see that are readily available for purchase are the usual investment grade stuff, that are more liquid (RBC, BMO, TD, CIBC, Telus, Bell, Rogers, Enbridge) Nothing below BBB.

[Chris007]

Again for TD, when I look at the High Yield section, the offerings are even slimmer Air Canada Bombardier Parkland Russel Metals Sherritt SNC Transalta I guess they don't have a very big inventory of junk bonds

[Maxmoe]

Hahaha Chris. For a guy that owns exactly 100 shares of ATH, maybe the problem is the minimum buy for a bond is $1000 face value . Those bonds are my hot button. I called and spoke to my discount brokers at TD and BMO twice each.  Neither would even give me a quote. And Why T F the company didn't buyback the bonds last spring at $18 makes me apoplectic. If you use a real broker, not one

[Maxmoe]

The bonds mature February 2022 which next month will be less than one year. Just the passage of time explains a big part of the change in the price but even at 46 they are priced sub junk. They are pricing in a high probability of insolvency and bankruptcy protection. Which is why I would still buy them because the refinancing is coming sooner rather than later. And I'm still enraged they

[Maxmoe]

The strong $cdn has helped materially over the past year. The debt is $usd denominated so the run in the $C has added at least 5 points to the market price of the bond . And by the way, ATH does not have any other debt outstanding other than the LC facility which has to be 101% covered by deposits at the bank. So the letter of credit facility is like a prepaid credit card.

[Chris007]

The volume logged in finra is definitley not in Berlin. have you tried to pick up some baytex 2024 notes trading at around mid 60s? Probably not, those aren't going to be easy to get either, but is sure is heck ain't because they are in berlin the fact is, your retail brokers ain't going to have them...they will sell you the stuff from inventory, which when it comes to junk, but

[Maxmoe]

Like I said, that list is from the bond desk. Ath is an exchange traded security. There are not many of these listed anywhere. The big banks control the bond market even more fiercely than the stock markets. Sgy has one on the tsx. You can buy it fairly easily. It's not carried in inventory on the bond desk and will never be on that list. The finra list is a trading disclosure requirement that

[Greenday]

@ Maxmoe - I think you've missed an important point.  The entire size of the issuance was only $450M.  That's not enough money invovled to make a market for the bonds and they're probably held by just a handful of financial institutions.  Chances are that the bonds will be held to maturity and that they'll never trade.  Their quoted price is mostly likely only a

[lovehockey]

It is because the bonds are wash traded. They may be moving from left pocket into the right of the same owner. That is why outsiders will never be able to buy any of them. These prices as fake as they come. They are part of the bigger game. 

[Greenday]

@ lovehockey - If ATH's $450M bond issuance is held by only a few financial institutions and they chose not to sell, then there is nothing to buy.  Consequently their price is really only an estimate of what their bonds are worth in comparision to other bonds that do have actual price discovery by trading in a liquid market.  For example, eventhough you haven't sold your house

[lovehockey]

What are you talking about. There is an actual traded volume. They are traded at these prices. The problem is it is for the show. You would not be able to buy any of these.  https://finra-markets.morningstar.com/BondCenter/BondTradeActivitySearchResult.jsp?ticker=C819043&startdate=05%2F18%2F2019&enddate=05%2F18%2F2021

[fellowship]

Thank you @ Greenday I have come to same conclusion. The bonds are not liquid. 

[Greenday]

@ fellowship - Exactly.  $450M isn't enough money to make a market for the bonds, regardless of how they are rated.  

[Maxmoe]

$450 million is a he77 of a lot more than the equity float.  

[Chris007]

$450 million in increments of 1000 each is 450,000 actual notes. As for FINRA, those trades are OTC. As per the site, "Most corporate bonds trade in the over-the-counter (OTC) market. The OTC market for corporates is decentralized, with bond dealers and brokers trading with each other around the country over the phone or electronically." The trades themselve are reported through TRACE

[Greenday]

@ Chris007 - A person could find the NR when the bonds were issued and see who purchased them but it's pretty common for a syndicate of investment banks to buy the issuance and parcel it out to a few of their large clients such as mutual fund managers who stick it into their portfolio's and collect the dividends until they mature.  Presumably ATH will have the money to pay off the

[Chris007]

Indeed, the hope is that the debt will be rolled over.  As for who were the investment banks involved in the initial financing, according to the Feb 9, 2017 news release, that was RBC Capital Markets, LLC, Goldman, Sachs & Co., Credit Suisse and TD Securities. Who knows how much they kept, how much was sold to institutions/investors https://www.globenewswire.com/news-release/2017

[fellowship]

Max the amount is larger I agree and it is possible institutions or individuals holding are interested on selling from time to time but that does not make the bond liquid. So if you know someone who owns this you have better chance asking that person to sell to you then buying in the open.

[fellowship]

Could be the reason why company was not able to retire earlier. In such cases they need to call back the bond at a certain date - I can understand why they think this can only be done at maturity date. It would have been higly lucrative to buyback at discount but the price trade value was fake.

[Greenday]

@ Maxmoe - $450M is more than ATH market cap which is currently at $106M however the market cap of USA public companies is smaller than the outstanding debt of USA compaines as well.  Zacks from March 2019. "The stock market has just over $30 trillion in total market capitalization, meaning the value of all outstanding shares, while the total amount of debt owed through bonds is more

[BLACKJACK86]

hi Chris , i use this site: ATHABASCA OIL CORP.DL-NOTES 2017(17/22) REG.S Bond | Markets Insider (businessinsider.com)

[Greenday]

@ BLACJACK86 - Corporate bond prices can go up for a few reasons.  If market interest rates go down then the return on a fixed rate bond increases which is reflected by a higher price.  The converse would be true if market interest rates go up - the value of the fixed return bond goes down. Secondly, the return on corporate bonds is a function of risk.  The higher the default risk,