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ANZ CPS Offer

Discussion in 'Shares' started by archangelsupreme, 7th Sep, 2008.

  1. archangelsupreme

    archangelsupreme Well-Known Member

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    I'm an ANZ shareholder and just received this offer to purchase CPS.

    I'm not really familiar with CPS and am not fully aware of the advantages and disadvantages/risks.

    Why is 1 CPS = $100....that's a lot more than what ANZ is currently trading at which is just $16. hmmm.

    Can someone please advise.

    Is there anyone out there purchase ANZ's CPS?
     
  2. AsxBroker

    AsxBroker Well-Known Member

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    Hi ArchAngelSupreme,

    You might want to read ANZ CPS Offer FAQ

    Whenever you see $100, it's usually the face value of a debt security.

    "Q. What are CPS?
    A. CPS are fully paid preference shares issued by ANZ, which will mandatorily convert into Ordinary Shares on 16 June 2014 (subject to certain conditions being satisfied). However ANZ may elect for a third party to purchase the CPS rather than delivering the Ordinary Shares issued on Conversion to the investor. CPS provides investors with Dividends that are preferred, non-cumulative, based on a floating rate and are expected to be fully or substantially franked. Dividends are scheduled to be paid quarterly in arrears on the Dividend Payment Dates, subject to the Payment Tests. You should read the Prospectus for a full description of CPS.
    "

    Enjoy reading the rest of the FAQ page ;)

    Cheers,

    Dan

    PS This is general information and not a recommendation to buy, sell or hold any financial instruments.
     
  3. archangelsupreme

    archangelsupreme Well-Known Member

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    I'm going to download the prospectus and try to read it.....:)......LOL, though the fact that you need a minimum $5000....which is going to be in some way locked in until 2104......not so sure if that's for me.
     
  4. AsxBroker

    AsxBroker Well-Known Member

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    Hi ArchAngelSupreme,

    They do say that they are going to apply for ASX listing which means you may be able to trade the securities before the conversion date.

    Cheers,

    Dan

    PS This is general information and not a recommendation to buy, sell or hold any financial instruments.
     
  5. pthm

    pthm Well-Known Member

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    Does anyone know if there is a comparative table showing the prices of CPS or income securities issued in the last 12 months, the ratings and margins above BBSW? Thanks.
     
  6. AsxBroker

    AsxBroker Well-Known Member

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    Hi PTHM,

    The rate of return would be different for all securities, say for example a bank is usually less risky than a car manufacturer. Hence, you would expect to receive more return for the risk you take in lending your funds to a car manufacturer than you would a bank. Margin spreads have blown out, saying that, they are probably more realistic now than 12 months ago.

    ANZ CPS is an Initial Public Offering, this means it hasn't existed before and there would not be any specific data relating to the specific security.

    Even the different banks have different credit ratings which would mean the returns would be slightly different between each of them.

    Sim might have some data on the BBSW data for you.

    Not a problem.

    Good luck,

    Dan

    PS This is general information, before making an investment decision speak to your FPA registered Financial Planner or registered stockbroker.
     
  7. archangelsupreme

    archangelsupreme Well-Known Member

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    So they would operate just like any share?

    Is anyone buying into this offering?
     
  8. AsxBroker

    AsxBroker Well-Known Member

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    Hi ArchAngel,

    A listed security, not a share, as this is a debt offering not an equity offering.

    Cheers,

    Dan

    PS This is general information, before making an investment decision speak to your FPA registered Financial Planner or registered stockbroker.
     
  9. pthm

    pthm Well-Known Member

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    Thanks, Dan, for the reply. I was curious to see the correlation between the ratings for the income securities and the BBSW spread - particularly for bank issuers. I had a look at the ASX website but it only showed the absolute return for each security issuer based on the last rate reset.
     
  10. cheeyeen

    cheeyeen Member

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    The following banks have recently issued preference shares that could be of reference to you, though I don't know their exact credit rating. I think you can probably find them online.
    Westpac - BBR + 2.4%
    Suncorp - BBR + 3.2%
    Macquarie - Fixed at 5 years BBR at a margin of 3.5% (~11% fixed)

    Chee Yeen
     
  11. pthm

    pthm Well-Known Member

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    Thanks, Chee. That was useful. I will look up their websites to see what their securities were rated at.