Where to by UK/Euro high yield corporate bonds?

I'm not sure if this has been already discussed somewhere in the forum already - apols if this is a repetitive question.

Does anyone know of a broker/platform where one can buy UK/European sub-investment grade bonds? I understand the minimum denomination of these bonds are very high (at 100k or so) which significantly limits the retail buyer base. However, I was curious if anyone has some info on this. I asked Hargreaves Lansdowne - they cannot do it unless the bonds settles via CREST settlement system.

Thanks.

Comments

  • Why would you buy Euro denominated bonds, now close to yielding next to nothing for risk involved and not easy to settle ? As to sterling ( if you do not believe in Brexit, otherwise stay clear for now) there are still a few 6% out there. In ORB, Paragon 6.125% 2022, offered around 102. If you can afford £100k, and still have a diversified bond portfolio: Standard Chartered subordinated, but investment grade BBB 5.125% 2034 at low 90s. Do your own research, as always.
  • Fang - thanks for your comment.

    I am interested in corporate high yield bond, not govt. bonds so yields can be attractive.
    There are decent number of sub-IG bonds where you can make high-single digit / double digit total returns. For example - you may have heard of Swissport - the ground handling operator (even operates at Heathrow). They have an unsecured 2022 bond with 9.75% coupon trading at 98 for a yield-to-worst of 10.4%. Another example - Pizza Express has an unsecured bond with a coupon of 8.625% / 2022 trading at 97 for a YTW of 9.3%.

    Assuming one is comfortable with credit quality, I'd rather back a 2022 bond yielding ~10% than one maturing in 2034.

  • Thanks but no thanks, VSI. Swissport now part of chinese HNA conglomerate, single B territory and impossible to ascertain. Pizza Express even lower at B3, so either of those only suited for a highly diversified high yield bond fund that can accommodate the occasional default.
  • Obviously I was by no means recommending these to anyone!
    I was only looking for leads as to where one can buy bonds similar to these for their own PA.

    As I said, I am focussed on high yield / sub-IG bonds, not IG bonds. If one does their due diligence and is comfortable with credit quality, ratings is irrelevant. I work in the sector and have access to relevant public info - based on this I do my own analysis and have relative comfort on taking positions on individual names. Of course many may not have access to info or experience in doing detailed credit analysis so this is certainly not for them. Caveat Emptor and all...

    Another example - Formula One 2022 2nd Lien debt rated CCC+ currently yields nearly 9%; this business' Enterprise Value is at least 2x its Net Debt value. Similarly, Swissport Net Debt LTV is 46%. By the way, Swissport and Pizza Express are both in fact CCC+ rated, not low single B! So ratings alone is of limited use when it comes to investing.

    Finally - I would have thought its easier to understand and analyse a Pizza Express biz model than the black-box model of banks like StanChart, no? Personally I don't understand the banking business model these days so avoid them.
  • VSI - You may be interested in our platform (www.wisealpha.com). Investors on wiseAlpha can invest from £100 per senior secured loan or bond of established UK brand name companies. Our focus is on companies that have leading market positions and which have a history of operating through the credit cycle successfully. The companies are usually above £1bn in value with a large equity commitment in the business by owners. SIPP holders can invest via WiseAlpha.

    WiseAlpha aims to democratising the £multi trillion corporate debt market offering the retail investor the same investment opportunities as the financial elite.

    Some news articles below:

    • City AM (feature on p22) www.cityam.com/assets/uploads/content/2016/08/cityam-2016-08-25-57be35b075eac.pdf

    • Crowdfund Insider: www.crowdfundinsider.com/2016/04/84901-overfunding-on-crowdcube-wisealpha-ceo-ahmad-discusses-growth-and-fintech-disruption/
    • Financial News: www.efinancialnews.com/story/2016-08-01/fintech-startup-brings-institutinal-corporate-bond-market-to-the-masses

    • Bloomberg: www.bloomberg.com/news/articles/2016-08-01/online-u-k-lender-starts-marketing-big-bonds-to-small-investors

    • AltfiNews: www.altfi.com/article/2157_platform_to_open_up_senior_secured_corporate_bond_market

    • CityAM: www.cityam.com/246587/fintech-startup-wants-individual-investors-buy-big

    • AngelNews: www.angelnewsletter.co.uk/blog/features/where-wise-angels-can-counter-balance-the-risk-of-their-portfolio/

    • Crowdfund Insider: www.crowdfundinsider.com/2016/08/88605-wisealpha-delivers-senior-secured-corporate-bonds-retail-investors/

    • Daily Mail: www.dailymail.co.uk/money/diyinvesting/article-3612646/Now-invest-directly-corporate-loans-just-100.html

    • Share radio: audioboom.com/boos/4919893-crowdfunders-the-impact-of-the-base-rate-cut-on-peer-to-peer-lending-a-look-at-wisealpha
Sign In or Register to comment.