$Hyflux 6% PerCapSec(BTWZ.SI) why is this way below par value? it's now at .973, does it mean that if hyflux redeems in 2020, i'll get the additional 2.7% in addition to the annual 6%?

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easonchan

lol i wonder why too

bgting

Yes. However, the actual calculation of the yield is not straightforward. So use this for reference.
https://www.bondsupermart.com/main/bond-in...

ThumbTackInvestor

Yes. You'd be entited to the annual coupon of 6%, which is in reality, higher than a 6% return for you as the 6% is based on the par value whereas you'd have invested at .973.
You'd also be entitled to the full value when it is redeemed in 2020.
Do check the fine print for any covenants like the callability of the bond, any senior debt and whether the coupons can be perpetually delayed etc.
Easier way to determine your return is simply to look at the YTM (yield to maturity)

ThumbTackInvestor

Reply to @xinglong : .973 is not very much lower than par value.
Considering the fact that Hyflux is in the red as of mrq, and in its balance sheet sits more than $1.1bil of non current loans and another $200mil of current loans, with cash of only $190mil, I'd say it doesn't look particularly low.

Besides an ugly balance sheet, the company also has negative operating cashflow for quite some time. They rely on refinancing, as well as the occasional divestment of JVs or subsidiaries for cash.
But if the debt markets suddenly dry up, and/or interest rate spikes up, their situation would be untenable.

You can buy high yield aka junk bonds at easily 50-60 cents on the dollar, so Hyflux's 0.973 doesn't seem particularly cheap to me.

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