Phoenix Share Discussion Threads

[ursus] 13/1/2015 18:06

They aren't varying terms unilaterally, but making an offer that holders of the existing securities may (or may not) wish to accept.

[scburbs] 13/1/2015 15:41

"The purpose of the Exchange Offer is to efficiently manage the refinancing of the Existing Securities, which have a first call date on 25 April 2016, by exchanging them for the New Notes which will have a maturity date on 18 December 2025."

Not sure why you would want to swap perpetual securities (with a redemption call option) for a 10 year unsecured bond? Equally it is not clear why there is a need to "refinance" perpetual securities.

However, they do appear to know when they are doing and the new terms look ok too so should probably give them the benefit of the doubt.

Anyone else got any thoughts on the logic? Market certainly seems to like it!

[skinny] 13/1/2015 15:19

Not of direct importance to us mere mortals?

[aleman] 13/1/2015 14:49

Market seems to like the news. Now to see if I can understand it! (Probably, the ECB QE news is helping too.)

[rcturner2] 31/12/2014 09:49

Finishing the year on a high, which is great news!

[glynnef] 23/12/2014 10:26

With 224.9 million shares in issue another 0.23 million isn't going to change anything significantly.

[ponywen] 23/12/2014 09:56

Block listing on 24th.I wonder how this will affect sp?

[jonwig] 09/12/2014 09:12

JoA - see 2013 AR pp230-232, basically the "risk-free rate" (defined in the section) with additions for equities, options, etc.

The table on p232 shows that equity markets aren't as important as gilt markets and credit spreads in determining the EV performance.
If you look on p180 of the AR, you'll see that PHNX holds a lot of corporate bonds, and credit spreads are currently very narrow.
Falling equity markets would probably go hand-in-hand with widening spreads, and PHNX would be pretty sensitive.

[joan of arc] 08/12/2014 17:12

But currently what would be the MCEV discount rate?

[jonwig] 08/12/2014 09:32

There's a set of slides in the May 2013 presentation (p8 onwards) which shows internal cash generation modelled through to 2042(!)

The actual MCEV is sensitive to lots of market and economic factors - rising interest rates and falling equity markets will bump it, for example. I doubt whether a chart of MCEV would show much, other than the fact that both equity markets and gilts have been strong.

[rcturner2] 07/12/2014 20:45

It would be interesting to see a chart of the EV over time, to see exactly how it is decaying (or not).

[jonwig] 07/12/2014 14:57

Hyden - your analysis is exact, which is why they need to consolidate more closed funds. Ultimately, of course, such funds will be consigned to history, but I won't be around then. "Days are numbered" - but mine more so!

As for "Why would you pay, for example, £1.10 for something which could only ever be worth £1.", don't forget that MCEV is *discounted* present value, and PHNX is *discounted* to its MCEV.

ev - yes, that's "management actions" for you! We assume they will only acquire if they believe thay can squeeze hard enough. That recent presentation gives the flavour.

[envirovision] 07/12/2014 13:14

I understand proportion of the funds can contribute to captital ratios. Using your capital ratios wisely can enhance value as pure cash and even debt is a wasteful and expensive often inefficient method. A more efficient method is to use what proportions of the underlying funds the regulators will allow.It can therefore be worth paying a premium.

[hyden] 07/12/2014 12:47

I agree to a degree but I maintain that PHNX is different because, acquisitions aside, PHNX days are numbered. MCEV will, at some point, begin falling year on year as cash flows are returned to shareholders. The attraction with PHNX is that you can currently buy these cash flows at a substantial discount and that is what is supporting the price. The current upside, imo, is at least partly due to the read across from the FLG / AV. deal but as I've already said,PHNX business model is different and will never bee rated as highly by the market. Why would you pay, for example, £1.10 for something which could only ever be worth £1. You wouldn't. And neither will the market.

[envirovision] 06/12/2014 18:53

Indeed the markets are as irrational to the upside as they can be to the down side.

[chizgreen68] 06/12/2014 02:09

Hyden, I admire your rationality. However the markets are never entirely rational are they? Hence 950 is not a limit, perhaps more a lower resistence level, eventually?

[hyden] 05/12/2014 19:59

RC, But even Livermore made mistakes, as we all do. In his later years, Jesse lost his fortune, developed depression and unfortunately shot himself. Thankfully he had enough sense in the good years to ensure that his family would be secure for life.

A couple his works have been published and are well worth the read but don't be fooled! All trading strategies are ultimately flawed because the users (ie: us) will always break the rules at some point. I prefer to buy the yield and invest for the long term, reinvesting dividends as I go.

I like PHNX and I hope to see the share price increase steadily to c. 950p (80% MCEV) at which point I see fair value. I don't think that PHNX will ever reach the valuation that AV. have paid for FLG because the business model and capital structure are perceived as less valuable by the market - FLG are lowly geared and have a very attractive position in the corporate benefits market.

[rcturner2] 05/12/2014 09:30

No problem.

Livermore was a commonsense guy. I believe that most investors can make money if they correct against the very simple errors that beginners make, which principally are holding onto losers and not running winners.

[25wbh] 05/12/2014 09:19

Cheers RC,your well read,rgds B

[25wbh] 05/12/2014 08:56

Was the Liverpool Livermore RC?