CUSIP for bond is 12545DAB4, CHC Helicopter, in Canada. 9 1/4% coupon, 10/15/2020, priced about 108 or 9. I think it said present yield to maturity came to 5 or 6%. Anyways, I got a note from Etrade that there is a "lottery" starting by the company for this bond, so I should be careful about selling my holdings to prevent a loss. The note did not say what the terms of the lottery were. All I could find out was that the bond is not callable for another year. I looked at their webpage. CHC Heli is doing an initial public offering (IPO) of shares of the company. I think it said symbol will be HELI. I could not find a prospectus for the IPO on their web page. I can only guess that some part of the IPO proceeds will be used to buy back the bonds. I fired off an email to them to find out the terms of the "bond lottery." I don't know if any of these bonds can be found on any broker's bond desk. If interested, you can probably check it out. Maybe or maybe not you could get a nice quick capital gain.
I know nothing about these specific bonds but a really common provision of high yield bond issues is that they allow the issuer to call up to 1/3 of the issue with IPO proceeds, generally at par plus 1 year's worth of coupons. If that is true of this specific issue, the call would be at 109.25.
Best Of |
Favorites & Replies |
Start a New Board |
My Fool |