Enquest 7% 2022

[hiriskpaul]

You are braver than me!

[hiriskpaul]

Decided to join you this morning, paid 52.69. Also picked up some Premier Oil bonds at 76.8. Fingers crossed the Russians come to their senses!

[88V8]

Haha you naughty person, now you've tempted me to buy a few PMO1 as well. At 75% the yield is, errm, anyway whatever it is it's jolly good. I won't work it out in case they go bust, then I won't be beating myself up over what I've missed.
More tempting in the ISA, next year.
42TE has taken a downtick as well, Perhaps our new Chancellor will increase the ISA allowance.

Yes, funny that Russia and the Saudis have suddenly decided to try and bankrupt their competitors. It didn't really work last time and neither of them can afford it for long.

V8

[Wozzitworthit]

OMG - I sold all of my Enquest on 25 February as I was beginning to have doubts about where they were heading - I was going to sell 50% each of Premier and Enquest but decided to just dump all ENQ1.

I got back just a smidgen more than my average purchase price and was reasonably happy

I was even happier when the fan hit the whatsitcalled or vice versa this week

Then I saw V8 had gone back in, closely followed by Paul

I can't believe that I have also now joined you two by buying some back just now at 52.69

Wish me luck

Woz

(This website should be called the Lemming Fool)

[spasmodicus]

I can't believe that I have also now joined you two by buying some back just now at 52.69

well, according to HL you can buy more today at around 29. No, I am not sneering, as I've got 4750 of this stuff at average buy price around 73. Not to mention some PMO1 as well.

So, the running yield for ENQ1 is 25% with 2 years to run. I see from the prospectus that they have the option of extending by a year to 2023.
the Issuer's right, in its absolute discretion, at any time to extend the original maturity date to 15 April
2023 and (ii) the automatic extension of the original maturity date to 15 October 2023 if the Issuer's senior, secured term and
revolving credit facilities agreement entered into by the Issuer originally dated 6 March 2012 (the "Senior Facilities Agreement")
is not repaid or refinanced by 15 October 2020.

and, the coupons are paid in extra bonds if the oil price goes below 65 bucks (ah happy days!)
if (i) the average of the Daily Brent Oil Prices during the period of six calendar months
immediately preceding the Cash Payment Condition Determination Date (the date falling one month before the Interest Payment
Date) is equal to or above US$65;

I assume holders will be awarded with 3.5% more bonds at each of the two coupon dates, according to interest will not be paid in cash on that interest payment date and will be capitalised and satisfied by the issue of further Notes to holders of the Notes outstanding at such time.

In the event that Enquest survives for 2 years, oil price below $65/bbl, holders would get approx. 4 extra tranches of 3.5% of face value, i.e. at maturity will have 1.148 bonds for each one they have now. Obviously, if Enquest looks like surviving, the bond price will gradually go up to about 100p at the maturity date. So very roughly a lucky holder who bought at 29p in the pound would get back 1.148/0.29, or about 3.95 times his*** original stake.

I am no expert on this, so please correct me if those numbers are wildly wrong. Sell price is about 0.25 now, so I could crystallize a loss of 4750 x £(.73 -.25) or £1175, or hang on for a possible payback of £4750 x 1.148 or £5453 in two or three years time. On the other hand, the total loss in the event of default would be 4750 x £0.73 or about £3475.

Actually,in the grand scheme of things a total writeoff would be:
a) less than I lost on Carillion
b) a lot less than I gained by trading in and out of PMO and other oilies over the last four years
c) a lot less than current losses on all sorts of "safe" LTBH HYP shares, which may or may not recover in time

so, I'm sticking with it for the time being, especially as almost all other forms of excitement are being denied to us by the cv19 shutdown!

stay safe!
S


*** woke alert. there probably aren't any "hers" mad enough to do this

[hiriskpaul]

I am not sure what my average price is on these. I bought a lot a few years ago at quite a low price, but subsequently sold them after a bounce to buy BBYB. I later bought some more and picked up the PIK notes. On my current holding though, I am sure I am underwater based on average price. As far as I am concerned I have already taken what ever the hit is, so the issue is what next? The price of oil was always the major risk and I think it really needs to rise in the second half of the year to have any hope of making a gain from here. So pure punt territory now. Nevertheless, potential upside from here is considerably more than possible downside (they can only go to zero!). There are outcomes in between wipeout and redemption at par of course. We may end up having to swap for equity for example.

I am happy to hold, but not willing to buy more. That might change if we see OPEC+ agree to get back around the table and cut supply, although the price of the bonds will likely rise should that happen.

PMO bonds are in similar punt territory, but maybe not as extreme as ENQ. Again, I am just sitting tight at present.

[hiriskpaul]

As expected, results looking good: https://www.londonstockexchange.com/new ... e/15313587

No more info on what they intend to do about next year's debt maturities, just this:

"The Group continues to explore options to refinance its Retail and High Yield Bonds ahead of maturity in October 2023."

Got quite a big position in these now, but if I trimmed I am not sure what I would do with the money, so continue to hold.

[passerby]

Maturity was extended until Oct 2023

[hiriskpaul]

Another welcome cash payment arrived recently, that's two in a row. I guess the next one will be as well unless Putin caves in, backs down and grovels for forgiveness. So nailed on certainty the next payment will be in cash then.

I don't hold the ords, but am surprised they have not reacted more positively to the rising price of oil.

Still waiting for news on the debt restructuring. Maybe with the finals in March?

[Gan020]

Oil now at $115 per barrel. UK gas at £400. I have to believe that at that any management team could make good profits at $115. Surely even if my pet hamster was the CEO at $115 he could make good money? Certainly in the time horizon of when this bond matures in Oct 2023.

I'm surprised this is still trading below par. I've been picking a few up over the last couple of months and added this week.

[hiriskpaul]

Oil now at $115 per barrel. UK gas at £400. I have to believe that at that any management team could make good profits at $115. Surely even if my pet hamster was the CEO at $115 he could make good money? Certainly in the time horizon of when this bond matures in Oct 2023.

I'm surprised this is still trading below par. I've been picking a few up over the last couple of months and added this week.

The price does seem low and I would join you but I already have an uncomfortably large position.

One downside of the rising price is that perhaps we may not be offered as high a coupon uplift as we otherwise might have when restructuring comes along. I wonder whether Enquest will make a debt offer soon, while the price of oil is high?

[Iain]

Enquest have offered an exchange of bonds. Holders of the Enquest 7% are being offered the chance to swap 7% notes for 2027 notes yielding 9%. Offer closes April 27th. New subscribers can apply via their broker. Does anyone have a view on the swap offer. High risk, capital out for a further 3.5 years post Oct 2023 redemption date on the 7%ers. My thoughts are that these bonds should go to a premium post Arpil 27 if oil remains above $100 per barrel- - reason current 7% offer is at slight premium and so YTR is below 7%.

[88V8]

Enquest have offered an exchange of bonds. Holders of the Enquest 7% are being offered the chance to swap 7% notes for 2027 notes yielding 9%. Offer closes April 27th. New subscribers can apply via their broker. Does anyone have a view on the swap offer. High risk, capital out for a further 3.5 years post Oct 2023 redemption date on the 7%ers. My thoughts are that these bonds should go to a premium post April 27 if oil remains above $100 per barrel- - reason current 7% offer is at slight premium and so YTR is below 7%.

Thoughts much as yours, see here https://www.lemonfool.co.uk/viewtopic.php?p=490224#p490224

Welcome to the Lemon, btw

V8

[OldBoyReturns]

ENQ1 matured on 15 October. According to the notice from Enquest cash payment of principal and interest was made on 13 October.

https://www.enquest.com/fileadmin/conte ... lement.pdf

HL has not credited the cash to my accounts yet though. Despite numerous formal complaints these delays in crediting cash keep happening and I am running out of patience with HL over it.

[Laughton]

Yep. They're one of the worst.

Wait a week or so and you'll probably see that they say the money was credited to your account on the correct date

[OldBoyReturns]

Yep. They're one of the worst.

Wait a week or so and you'll probably see that they say the money was credited to your account on the correct date

The delays in crediting routine cash (eg coupons or maturity) are ridiculous and can only be by design. The £270m of profit HL are making a year on client cash is illuminating. I make a formal complaint every time it happens and they uphold the complaint every time and chuck me a couple of hundred quid in compensation for my trouble. As you say the use of the date the cash should have been credited rather than the later date it is credited just adds insult to injury.

[GoSeigen]

Yep. They're one of the worst.

Wait a week or so and you'll probably see that they say the money was credited to your account on the correct date

The delays in crediting routine cash (eg coupons or maturity) are ridiculous and can only be by design. The £270m of profit HL are making a year on client cash is illuminating. I make a formal complaint every time it happens and they uphold the complaint every time and chuck me a couple of hundred quid in compensation for my trouble. As you say the use of the date the cash should have been credited rather than the later date it is credited just adds insult to injury.

In defence of HL my dividends usually arrive only a day after other brokers. It's annoying but not a deal breaker for me. If at times they are actually taking a week then that is an unwelcome development.


GS

[BondSquared]

Yep. They're one of the worst.

Wait a week or so and you'll probably see that they say the money was credited to your account on the correct date

The delays in crediting routine cash (eg coupons or maturity) are ridiculous and can only be by design. The £270m of profit HL are making a year on client cash is illuminating. I make a formal complaint every time it happens and they uphold the complaint every time and chuck me a couple of hundred quid in compensation for my trouble. As you say the use of the date the cash should have been credited rather than the later date it is credited just adds insult to injury.

The use of a date with "good value" or "back value" is common in the custody business, i.e. backdating the value date of the cashflow even if credited later, and ensures that any interest on the account starts at the correct date, i.e. the date it should have been credited (but hasn't, for operational reasons), so I don't see any malfeasence there. It's still more than annoying given the interest on broker accounts is often well below market, and the cash wasn't available for investment when it should have been, but back-dating itself isn't done "to add instult to injury".