Post by
15Stanmore on Dec 02, 2020 12:21pm
BTB 2025 7% debenture trading observations
The market for BTB REIT units has now reached and passed the $3.65 conversion option embedded in the BTB.DB.H debenture. This means from now to October 31, 2025 the holder of $1,000 of face value of the Series H debenture can, at their option at any time, convert the $1,000 of face value into 273.9726 BTB.UN units.
This embedded option now has real "value", that is and should be reflected in the market price the debentures command on the secondary market. Right now, with the units trading at a neutral level ($3.65), the debentures should trade at $100. However, the unfilled bid/ask is currently $101 bid versus $102.98 ask. This means the embedded option has a value of at least $1 per $100 of face value (bid) versus $2.98 per $100 of face value (ask).
Given you will earn 7% for holding this option, I would suggest it is a great alternative to buying the risk inherent in the underlying BTB.UN units.