Enq 23 �pik Tog Discussion Threads

[11_percent] 19/3/2017 13:33

We expect that Additional Retail Notes will become fungible with the existing Retails Notes then outstanding once the Additional Retail Notes have been admitted to the Official List of the Financial Conduct Authority and to trading on the LSE’s electronic order book for retail bonds. For the interest payment date on 15 February 2017, we expect this to occur as soon as reasonably practicable following publication of EnQuest’s preliminary results for the 2016 financial year, which are scheduled to be released on 21 March 2017. Due to the group’s close period prior to release of the 2016 preliminary results, admission cannot take place earlier; however, Additional Retail Notes will still be issued on or about the relevant interest payment date, as described above.
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Hi guys,

we expect this to occur as soon as reasonably practicable following publication of EnQuest’s preliminary results

The. Results are due 21st March.

Anyone got an idea what "reasonably practicable" is.

A few days?

We have been waiting for over a month now.

[steve73] 03/3/2017 14:44

hpcg - perhaps oil will have averaged over $65 by then and we'll get paid in pieces of silver - well sterling! .... here's hoping....!

I actually have an odd number of hundreds in one of my accounts so I will get (or should be entitled to) a half bond even at this stage.

Email now sent and response awaited from my broker who are normally pretty quick about such matters....

[hpcg] 03/3/2017 13:53

Steve - I got whole numbers down to single bonds; I suspect this time everyone will. That won't be the case for me in the summer so I intend to do a bit of a true up if I can. Nominee providers may do something as they will get paid in full whereas the rounding will happen at the level of individual accounts.

[ianbrewster] 03/3/2017 13:17

Mine worked out at a whole number - definitely down to single bonds, but can't comment on any rounding

[steve73] 03/3/2017 12:29

OK - thanks all... I shall chase up my provider. Incidentally did they credit new bonds in units of less than 100 (or even less than whole units if applicable)..?

[11_percent] 03/3/2017 11:13

I amm in same position as IanB.

[ianbrewster] 03/3/2017 11:12

HL are showing an interim line which should convert after the results on 21st Mar.
Line was created 20 Feb - number is 3.5% of my holding.

[lonrho] 03/3/2017 10:55

I have had a letter from Hargreaves Lansdowne telling me the number of additional bonds I will receive.

[steve73] 03/3/2017 10:14

So one month on and with the coupon date passed, has anyone actually received any additional bonds in lieu of the interest that was missed - or indeed had any correspondence with their nominee/broker to advise the situation - or are we to simply conclude that the par value of the bonds has now been (implied as) increased to 103.5 (and so the current price now trading higher to reflect this)..?

[hpcg] 01/2/2017 16:32

Ian - yes I read that, and my initial reaction was the same as yours, but I don't think I was reading it correctly. I may be wrong though, and it can certainly be read that it is extending the issue and leaving it to the broker to true up the distribution somehow. I imagine this will be done with a tiny cash transfer. What I had forgotten is that the bonds are par a quid, not a thousand so any adjustment is tiny. Having said that I think they deal in lots of 100, so that will be all screwed up. The subsequent interest payments mill be messier and messier in that regard.

So I think actually the interpretation of an extended issue is likely the correct one.

[ianbrewster] 01/2/2017 15:36

hpcg

the following from Enquest would seem to contradict what you believe will happen. Note comment on no fractions of notes being issued.




EnQuest will announce the aggregate principal amount of the additional Retail Notes (“Additional Retail Notes”) to be issued in settlement of accrued interest not less than 10 business days prior to the relevant interest payment.

EnQuest will issue the Additional Retail Notes into Euroclear and Clearstream, Luxembourg on the relevant interest payment date (or, if the interest payment date is not a business day, on the next following business day as determined in accordance with Condition 7(h) of the Retail Notes). Additional Retail Notes will be issued by way of a further tranche of the series of Retail Notes then outstanding. Based on our discussions with Euroclear and Clearstream, Luxembourg to date, the clearing systems will allocate the Additional Retail Notes to individual account holders pro rata to such account holders’ interest in the then outstanding Retail Notes. No fractions of Additional Retail Notes will be issued (as provided in Condition 5A(a) of the Retail Notes).

We expect that Additional Retail Notes will become fungible with the existing Retails Notes then outstanding once the Additional Retail Notes have been admitted to the Official List of the Financial Conduct Authority and to trading on the LSE’s electronic order book for retail bonds. For the interest payment date on 15 February 2017, we expect this to occur as soon as reasonably practicable following publication of EnQuest’s preliminary results for the 2016 financial year, which are scheduled to be released on 21 March 2017. Due to the group’s close period prior to release of the 2016 preliminary results, admission cannot take place earlier; however, Additional Retail Notes will still be issued on or about the relevant interest payment date, as described above.

[hpcg] 01/2/2017 14:47

Steve - it's a debt repayment, not an equity raise, nor a share consolidation. If they weren't to pay to the penny then they would have defaulted.

[steve73] 01/2/2017 12:00

hpcg...thanks. I am hoping it would go the way you indicate...As long as there's no rounding involved. I know it wouldn't make a huge difference but with my relatively small holding here (spread over a couple of accounts) if each 3.5% of new notes were rounded down to a whole number I would end up loosing around 20quid... not a lot, but I'd rather have than them...

[hpcg] 01/2/2017 11:02

3.5% per 6 months compounded is more than 7% annual, 7.12% to be precise. I don't think we can get stiffed on the interest. Any case study I have seen always results in the principal of the original note being increased. See explanation here for example:



From the RNS
"The Additional Notes will be issued by the Company on 15 February 2017 and, upon listing, will be consolidated and form a single series with the existing Notes in issue."

So for each bond a new additional bond of £3.50 will be created. These will then be consolidated into the original issue, making the principal on the issue 103.5, and then in August 107.1225.

[ianbrewster] 01/2/2017 10:25

Not sure I understand your 'parts of parts'

As I understand you will get additional notes with same terms as ones you hold today. Next interest will be paid on increased holding (as more notes if oil below $65)

They can't issue part notes, so there will have to be rounding - haven't seen anything in writing but can guess which way it will go...

[steve73] 01/2/2017 09:16

Thanks Ian, so now I get parts of a note, and then parts of parts of....... I just hope they don't round them down to whole notes.

[ianbrewster] 01/2/2017 08:51

Steve - new notes will be issued

[steve73] 01/2/2017 07:37

Only just noticed Mondays news... As expected the interest on these bonds will not be paid.



Not sure I fully understand how holders will be compensated by the issue of further notes...

i.e. will holders get an increase of 3.5% more notes, or will the notes now mature at 103.5 par?

[hpcg] 06/1/2017 13:57

Steve, yes same for me, though I bought more during the restructure, which is why I am fairly sure they trade clean now.

[steve73] 06/1/2017 11:37

hpcg - I bought a few of these just after the last coupon and had to pay a small additional to reflect the accrual. Then the next time I got a quote just after the restructuring had been proposed but not yet completed the separate accrual had been removed.

[hpcg] 06/1/2017 10:30

2018 before cash. I'm quite happy to hold a 7% compounder with delayed gratification. Mind you no one knows how this actually works in practice. All will become clear after the next pik coupon.


I don't know how these thing work myself, but I imagine what they do is increase the par value of each bond, and reset the interest rate slightly higher. To take the simpler case of a single annual coupon of 7%:

Par = 100
Coupon = 7
New par = 107
New coupon = 107*7/100 = 7.49

Slightly more complicated with 2 coupons per year as to what happens in the first period, it will be just under half. I'm fairly sure the bonds trade clean, so one has to appreciate this when buying or selling that the price incorporates the interest gains.

[steve73] 06/1/2017 02:40

Share's have gained more than 100% since the debt reconstruction...(and the ENQ board has more activity to reflect that).

...but as I'm holding both I'm extra happy..

11pc - oil has to AVERAGE more then $65 over the period to get the coupon paid as cash, so it's unlikely we'll get the feb 17 one. Perhaps the one after the way things are going.

[11_percent] 05/1/2017 20:47

And...if oil gets to $65, we get the divi paid direct.

All looking good.

[rob the slob] 05/1/2017 20:43

Oops. Fatal maths error. Might be slightly lower not higher (doh!)

[rob the slob] 05/1/2017 20:38

...make that 40% now ?HL website shows gross residual yield of these bonds is currently 12.45% p.a. (based on new 7% coupon). Could be even higher if they take option to defer redemption till oct 2023http://www.hl.co.uk/shares/shares-search-results/e/enquest-plc-5.5-notes-2022-gbp100