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question about Premier Oil Bonds?

Gilts, bonds, and interest-bearing shares
hiriskpaul
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Re: question about Premier Oil Bonds?

#165466

Postby hiriskpaul » September 10th, 2018, 12:31 pm

Just noticed this, Premier Oil are now free of their convertibles:

https://www.londonstockexchange.com/exc ... 78901.html

Just obtained an on-line clean bid price of 101.6, reducing YTM to 5.85%. Just 2.5 years to maturity, so still happy to hold at that yield.

hiriskpaul
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Re: question about Premier Oil Bonds?

#222161

Postby hiriskpaul » May 16th, 2019, 3:48 pm

Upbeat trading statement today: https://m.londonstockexchange.com/excha ... 75826.html

Ords up 7%, bonds up 0.25%. Tempted to trim and buy a few more Enquest.

Ps, something odd in this thread. We appear to have lost some postings.

hiriskpaul
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Re: question about Premier Oil Bonds?

#232291

Postby hiriskpaul » June 27th, 2019, 10:02 am

Significant resource upgrade at Zama following conclusion of appraisal campaign.

https://m.londonstockexchange.com/excha ... 26756.html

Ords up about 2.5%, PMO1 slightly ahead, trading above par, but with less than 2 years to maturity, upside is limited.

hiriskpaul
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Re: question about Premier Oil Bonds?

#272013

Postby hiriskpaul » December 18th, 2019, 2:54 pm

For some reason I have not been able to fathom out, the bonds dropped in price a few pence on 16/12, despite increasing oil prices and a rise in the price of the ords. Picked up a few more this morning at 99.85, YTM 6.6%.

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Re: question about Premier Oil Bonds?

#272028

Postby Wozzitworthit » December 18th, 2019, 3:19 pm


hiriskpaul
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Re: question about Premier Oil Bonds?

#272194

Postby hiriskpaul » December 19th, 2019, 1:18 am

Wozzitworthit wrote:Paul

Possibly this ??

https://www.telegraph.co.uk/business/20 ... oans-loom/

Woz

Thanks for the link, very interesting. If true, the hedge funds hold blocking positions on some of the bonds and say they will block refinancing, that leaves PMO with a number of options. These include alternative financing to repay bonds as they mature (hedgies cannot block that), disposal of assets, and potentially equity raise/rights issue. None of that lot are detrimental to bond prices, but are not good for shareholders. In these circumstances I would have expected share prices to drop and bond prices to rise, yet the opposite has happened!

Definitely something to keep an eye on.

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Re: question about Premier Oil Bonds?

#272214

Postby Gan020 » December 19th, 2019, 8:49 am

hiriskpaul wrote:For some reason I have not been able to fathom out, the bonds dropped in price a few pence on 16/12, despite increasing oil prices and a rise in the price of the ords. Picked up a few more this morning at 99.85, YTM 6.6%.


I perceived it was delayed reaction to Tullow's share price falling by 70% and someone realised they were carrying a bit more risk than they thought, so the article is very intesting.

hiriskpaul
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Re: question about Premier Oil Bonds?

#273038

Postby hiriskpaul » December 23rd, 2019, 11:36 am

These have bounced back. Quoted 101.4229 for 10k nominal this morning. Did not go ahead.

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Re: question about Premier Oil Bonds?

#273048

Postby dspp » December 23rd, 2019, 12:37 pm

Keep an eye on the operational issues aspects.

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Re: question about Premier Oil Bonds?

#273205

Postby Swanmore22 » December 24th, 2019, 11:39 am

hiriskpaul wrote:These have bounced back. Quoted 101.4229 for 10k nominal this morning. Did not go ahead.


Hi Paul,
Apart from the retail bond 6.5% May 2021 , PMO1, do you have a breakdown of other debt issued by Premier.
From a cursory flick over of the co website i could only find reference to the above " retail bond ".
Mkt reports that "Premier have $2bn of debt " , but i cannot find a listing of securities.

Regards,
Swan

hiriskpaul
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Re: question about Premier Oil Bonds?

#273234

Postby hiriskpaul » December 24th, 2019, 2:34 pm

Swanmore22 wrote:
hiriskpaul wrote:These have bounced back. Quoted 101.4229 for 10k nominal this morning. Did not go ahead.


Hi Paul,
Apart from the retail bond 6.5% May 2021 , PMO1, do you have a breakdown of other debt issued by Premier.
From a cursory flick over of the co website i could only find reference to the above " retail bond ".
Mkt reports that "Premier have $2bn of debt " , but i cannot find a listing of securities.

Regards,
Swan

Hi Swan, the only outstanding listed bond is the retail one (£150m). The rest of the debt comprises of bank finance and privately placed notes.

hiriskpaul
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Re: question about Premier Oil Bonds?

#278765

Postby hiriskpaul » January 20th, 2020, 3:42 pm

FWIW I sold half my position in these today at 104.21 (ytm 3.3%). At that yield I can get better returns for the risk elsewhere.

The other half may go soon, but still holding the warrants.

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Re: question about Premier Oil Bonds?

#278779

Postby Gan020 » January 20th, 2020, 4:44 pm

Over on advfn it's perceived the bond has been extended to Nov 2023 with a coupon of 8.1% and a further payment for agreeing to extend the bond from the maturity date of May 2021 (which from memory ws previously extended from an earlier date and a lower coupon).

I don't hold and it's currenlty too risky for me and thus I'm not incentivised enough to read the original documents myself. I'm not sure if this post is helpful or not.

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Re: question about Premier Oil Bonds?

#278785

Postby Surerera » January 20th, 2020, 5:00 pm

From what I can make out the coupon is 6.5% until May 2021 and then 8.1% from May 2021 until Nov 2023. Holders also get an amendment fee of .25% and a repayment fee of .75%. I'm not sure when the amendment fee gets paid.

hiriskpaul
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Re: question about Premier Oil Bonds?

#278786

Postby hiriskpaul » January 20th, 2020, 5:04 pm

Gan020 wrote:Over on advfn it's perceived the bond has been extended to Nov 2023 with a coupon of 8.1% and a further payment for agreeing to extend the bond from the maturity date of May 2021 (which from memory ws previously extended from an earlier date and a lower coupon).

I don't hold and it's currenlty too risky for me and thus I'm not incentivised enough to read the original documents myself. I'm not sure if this post is helpful or not.

Damn! This is what happens when making decisions when jet lagged. Thanks for the update though, must look into this properly tomorrow.

hiriskpaul
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Re: question about Premier Oil Bonds?

#278795

Postby hiriskpaul » January 20th, 2020, 5:30 pm

Surerera wrote:From what I can make out the coupon is 6.5% until May 2021 and then 8.1% from May 2021 until Nov 2023. Holders also get an amendment fee of .25% and a repayment fee of .75%. I'm not sure when the amendment fee gets paid.

Where are you seeing that? The Retail Bond Supplemental Deed says 8.85% from the “A&E Effective Date”, which I have not figured out yet.

Edit: A&E Effective Date seems to be "late March".

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Re: question about Premier Oil Bonds?

#278826

Postby Surerera » January 20th, 2020, 8:29 pm

hiriskpaul - It's difficult to find exact info at the moment, 8.85% sounds like the 8.1% plus 0.75% repayment fee. I might email the company tomorrow to get clarification.

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Re: question about Premier Oil Bonds?

#278960

Postby hiriskpaul » January 21st, 2020, 1:49 pm

Surerera wrote:hiriskpaul - It's difficult to find exact info at the moment, 8.85% sounds like the 8.1% plus 0.75% repayment fee. I might email the company tomorrow to get clarification.

The scheme documents are available here: https://www.lucid-is.com/premieroil/

You have to register (for free) to gain access, but all the details are there, including the Retail Bond Supplement which contains the new terms. There is also a summary on page 583 of the Explanatory Statement document containing some of the new terms of the various senior and super senior notes, including the retail bond. I was looking at this last night, but not getting very far as I was knackered after lack of sleep on a night flight. Bit busy now, but hopefully will have time to look at this again later today.

I am definitely not selling any more until I have digested this lot. My brief calculations yesterday, which could well be wrong the state I was in, puts the YTM at around 7.5%, based on a mid price of 104.5, but that excludes the fees. Based on that, I suspect it would be better to sell after the schemes have been voted through and the fees paid. There is of course some implementation risk here, but the RNS indicates they have sufficient backing for this not to be a problem.

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Re: question about Premier Oil Bonds?

#278967

Postby Surerera » January 21st, 2020, 2:25 pm

hiriskpaul - I've just had a brief summary from the company as follows:

Impact on the Retail Bond
 Maturity
– Extend the maturity from May 2021 to November 2023

 Enhanced economics
– 2.35% coupon increase to 8.85% (harmonises interest rates across the debt classes) – 0.25% amendment fee, payable when the amend and extend becomes effective
– 0.75% repayment fee, payable as the retail bond is repaid and cancelled

 Extension effective when:
– The Schemes are sanctioned by the Court
– New equity is raised; and
– One of the Tolmount Acquisition or the Andrew Acquisition completes

 Other key changes
– Security: unchanged
– Minor amendments: to provide Premier with increased operational flexibility

hiriskpaul
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Re: question about Premier Oil Bonds?

#278972

Postby hiriskpaul » January 21st, 2020, 2:56 pm

Surerera wrote:hiriskpaul - I've just had a brief summary from the company as follows:

Impact on the Retail Bond
 Maturity
– Extend the maturity from May 2021 to November 2023

 Enhanced economics
– 2.35% coupon increase to 8.85% (harmonises interest rates across the debt classes) – 0.25% amendment fee, payable when the amend and extend becomes effective
– 0.75% repayment fee, payable as the retail bond is repaid and cancelled

 Extension effective when:
– The Schemes are sanctioned by the Court
– New equity is raised; and
– One of the Tolmount Acquisition or the Andrew Acquisition completes

 Other key changes
– Security: unchanged
– Minor amendments: to provide Premier with increased operational flexibility

Thanks, that chimes with what I thought from yesterday. The only thing I was slightly unsure about were the precise terms the repayment fee was paid. For example, would it be paid if/when the terms are amended again and maturity extended? Overall this is a minor detail though, just £75 for each £10k nominal.


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