Drew Meredith
speaker
386 appearances
1 recordings
1 series
first heard Jan 2023
last heard Jan 2023
Drew Meredith’s voice in public audio — every appearance, attributed to the second.
Trend
recordings per month · last 12 monthsNo recordings in the last 12 months.Older appearances are listed below; set an alert to hear about the next one.
Appearances
Yeah, I think.
Go check that.
So, preference share is like – or a hybrid is a preference share.
A preference share is a version of the equity or like an ordinary share is, but it has –
Parts of it are like a bond or a term deposit, not anywhere near like the risk of a term deposit.
But it pays a six-monthly interest payment linked to the cash rate or the bank bill swap rate that you receive every six months and can convert to equity in worst-case scenarios.
So people say it's a combination of shares and bonds at the same time.
Anyway, so- I put this in because everyone's worried about inflation and interest rates going up and what impact that has.
Preference shares pay a coupon or pay their interest payment.
on a set margin.
So that could be 2% above the bank bill swap rate.
The bank bill swap rate is similar to say the RBA's cash rate, which is 3.1%.
So if you think it's 3.1, they pay 2% more than that, you're getting 5.1% fully franked every six months from this portfolio of assets.
How much did you say?
The yield at the moment is actually 5.9.
You're giving up, in the case of shares, you're giving up growth.
So you're not taking, there's very little equity upside.
When they're first issued, they're issued at $100 and they'll trade around that, but they'll be bought back in five to seven years at $100.
In the case of hybrids, that's the similarity to bonds.
But they have a conversion clause that if a bank was in significant trouble, they could be converted to equity.
Showing 321–340 of 386 · page 17 of 20
← Previous
Next →