Phoenix Share Discussion Threads

[hvs] 01/7/2014 13:39

Its a screaming buy.

[skinny] 01/7/2014 12:03

Canaccord Genuity Buy 652.75 649.00 800.00 800.00 Reiterates

[hvs] 01/7/2014 11:49

Typically about 2-3% of amount raised.

Peanuts really over 7 years.

Remeber its not a share issue but a bond issue and no underwritting.

[jonwig] 01/7/2014 11:15

Gary, in effect, yes, but I think we'll find a liability of £300m appearing on the balance sheet, with the associated costs showing up elsewhere.

The costs are one-off but they might be amortised over the seven-year life of the bond, in which case they won't be all that much; and of course they are replacing a floating rate by a fixed.

Nobody's saying what the costs are, of course!

[gary1966] 01/7/2014 10:55

fenners66,

I suspect that there is a gross amount raised and a net amount received. If you have based your calcs on the figures that the company has given you ie new debt and amount being repaid, then any financing cost should be reflected in your calculations to arrive at a net interest saving.

[hvs] 01/7/2014 08:10

£ 300+ £ 250 mill being paid off. Will be very good saving in interest cost.
Half yearly cash flow will be very good this will further reduce debt.

PHNX is surely becoming a blue chip.

[skinny] 01/7/2014 07:55

Phoenix Group Holdings announces the completion of the divestment of Ignis Asset Management Limited to Standard Life Investments (Holdings) Limited


Phoenix Group Holdings, the UK's largest specialist closed life fund consolidator, confirms that the divestment of Ignis Asset Management Limited to Standard Life Investments (Holdings) Limited completed today.

The cash consideration received was £390 million (subject to adjustment), of which £250 million will be applied as a prepayment of the Impala debt facility.

[fenners66] 30/6/2014 20:21

Oh by the way I bought some more this morning but should have got them last week!

[fenners66] 30/6/2014 20:20

On the back of the above figures, assuming no repayments were due, that would save about £11.4m a year in interest from 2018 and some (less) before that. What did the fund raising cost in fees though?

[scburbs] 30/6/2014 20:08

Key point is that PHNX have shown they can access the debt markets for reasonably priced unsecured debt even without a credit rating.

When they refinanced Impala they had no choice, but go with the terms offered by the Impala lenders as the debt market was closed to them. They are now very much starting to move onto the front foot.

[badtime] 30/6/2014 19:02

Scburbs....thanks for that useful post... Very informative and certainly not to be yawned at...some of the silly earlier posts certainly were.Onwards and upwards

[devoncop] 30/6/2014 18:43

Thanks sc

Very useful post and confirms my thoughts that they will be able to increase their closed annuity portfolio and the ability to obtain an investment grade credit rating will not only allow further cheaper access to credit markets and hence increase net free cash flow even further but should help the market appreciate the unduly low rating the company is on and hence boost the share price.
All imho and as usual dyor.

[jonwig] 30/6/2014 18:38

On balance sheet debt numbers, the announcement today is pretty neutral.

What's significant is that they've got one thumb up from the capital markets and the prospect of another when (if?) they get a rating agency to put an investment grade figure. (Look for BBB- or Baa3 at least, depending on the agency.)

Anyway, they wouldn't have bothered with all this unless they had something in mind.

[scburbs] 30/6/2014 18:32

Looks like a good deal. Back for some more I expect (on cheaper terms) once credit rating secured.

"In addition to re-financing a proportion of the Group's existing Impala silo bank debt, the transaction is expected to provide greater financial flexibility for the Group in future, including:

· Reducing the Group's reliance on bank finance by accessing the wider debt capital markets, thereby reducing the refinancing requirement from Phoenix's existing bank debt structure;

· Extending the maturity profile of the Group's debt, with the term of the Bond being two years longer than the final maturity of the existing Impala bank facility in June 2019, thereby better matching the debt amortisation profile to Phoenix's forecast cash generation;

· Reducing interest costs for the Group, with an annual coupon of 5.75% on the Bond (with the re-offer yield equivalent to 7 year Sterling mid-swaps plus 321bps). This coupon compares favourably to the margin of the current Impala bank facility which is currently 475bps, with a step up in margin to 700bps above Libor from 1 January 2018;

· Further supporting Phoenix's sustainable dividend policy and generating additional financial flexibility for the Group to participate in future consolidation of the UK closed life fund market;

· Facilitating Phoenix's plans to unify the two existing bank debt facilities into a single facility, simplifying the corporate structure and facilitating a possible future internal merger of the Group's two largest UK life companies; and

· Offering Phoenix an additional source of funding as it implements its growth strategy of closed life fund consolidation, as well as enhancing Phoenix's credibility as a counterparty.

Furthermore, Phoenix continues to target an investment grade credit rating and expects to engage with rating agencies in due course."

[scburbs] 30/6/2014 18:31

£300m bond away at 5.75%. Not to be yawned at!

"Priced a £300 million 7 year Sterling-denominated senior unsecured bond at an annual coupon of 5.75%."

[philo124] 30/6/2014 18:30

Nice rise though.

[hvs] 30/6/2014 16:14

Its all truthful after the event hindsight and all.

It did push the boat out though. 500 wow !!!!!!

[devoncop] 30/6/2014 15:36

No worries Silky.
I am more than happy with what seems an excellently timed fund raising at a time when investors are snapping up such things. This bolsters the business (and the dividend) and provides firepower for maybe more closed annuity books.

CSN have diversified overseas in the same area so I wonder if PHNX is considering the same.

Market seems to like it.

Good luck all.

[rcturner2] 30/6/2014 15:03

OK, in which case I apologise. There is no way I could know if he is telling the truth or not, and as you say the LSE data cannot be relied on.

[jonwig] 30/6/2014 14:58

Such arguments are demeaning, as well as performed by people with masks on!
Point-scoring is useless unless you're across a pub table.

For what it's worth, some brokers (eg. TDDirect, mine) often go through IGMarkets, not LSE. Trades don't appear where expected.

[eeza] 30/6/2014 14:53

On June 25 I bought 500 @ 615.996 & 483 @ 616.95.

[silkywhite] 30/6/2014 14:52

No not a fantasist. I paid £3079.90 total for 500 shares on 25th June. That is 615.98p per share.
I don't know if it showed up because I don't check.

[rcturner2] 30/6/2014 14:48

no trades when through as buys at 615p on the day he/she claimed to have bought

a fantasist