Places for People - New Issue

New Retail Bond Launch: Places for People Finance plc 4.25% 2023

I won't be applying.
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Comments

  • Very stingy. Same here!
  • Put my application in
  • I suppose they will tick the box for some people, not for me though.

    On the plus side, a good credit and equates to equivalent UK Gilt +325bps.

    On the minus side, they aren't secured on property which I would expect for such a measly yield.

  • Unlike previous Places for People retail bond offerings, these carry no guarantee from the principal asset holding entity within the group, Places for People (Homes) Ltd.

    So same name as before but different risk?
  • 4.25% is far too skinny for a 7 year bond, can't imagine much capital gain here. Better options out there
  • Not sure how good the guarantors are!
    The financial statements supplied to Companies House for Places for People Ventures Operations Limited, for the year ending 31st March 2016 was signed off by KPMG LLP (Independent Auditor, Andrew Sayers) on 15 September 2015
    Clearly 2015 should read 2016, but if the auditors can't put the right date in, was else could be incorrect?
    See https://beta.companieshouse.gov.uk/
  • Agree it's not very exciting but there aren't many alternatives that look better value. I have the existing bond maturing in December plus the proceeds of the recent Lloyds bond maturity and the Enterprise Inns tender to reinvest, so I suspect I will apply just to keep up my bond asset allocation and to diversify from other holdings. Who knows maybe interest rates will still be low in 7 years. Good heads up guys on potential extra risk that I will look into.
  • Frugal, I agree its not the most exciting, however I do like that it is only 7 years, the coupon is reasonable considering the current market yields available on retail bond issues.
    My main concern is how good the "security" is behind the 4 companies, perhaps Oliver can enlighten us with a write-up. Plan to invest, but not sure at what level.
  • Still blowing hot and cold over these, so have put order in with Selftrade and can then modify or cancel whilst I home in on final decision !!

    Not so long ago anything under 6% was pooh-pooed - now look where we are !!!
  • Not for me, I have been bullish on bonds for more than 10 years, put my money where my mouth is and have done quite well but something has changed. My fear is that central banks have decided that ultra low interest rates have done more harm than good and are going to start pushing them up fast. In the UK the excuse will be the return of inflation, in the US it will be Trump's $1T infrastructure spend. I could just about swallow 4.25% on a 5 year but 7 is too long.
  • Well to my mind a new retail issue at 4.25% is a heck of a lot better than no new issues at all, and it has been a bit of a desert of late.

    Looking at the yields of existing bonds out there, the coupon doesn't look too bad if you're looking to diversify.
  • Depends how much you want to invest. In the min.100K category there are a number of issues, not junk, where you can reach 6%.
  • In normal circumstances an unregulated unsecured unrated property developer/come leisure centre manager would need to issue 7 year £ at more than 4.25%. But this business is well managed (not guaranteed) by Places for People. PFP is a strong and significant investment grade “Registered Provider” of Social Housing. Whilst not impossible, it does seems unlikely they would allow their image to be tarnished by something going wrong with this bond. It is also hard to think of any bonds that are generously priced in the present day? (Fang, “not junk” bonds yielding 6%, please share?)
    4.25% unsecured is perhaps not generous but at gilts +325 this compares to gilts +135 for the secured institutional bonds. On that basis there seems little wrong with including them, at par, to a diversified income producing portfolio and holding to maturity?
  • I am applying for this as it will enable me to sell bonds I am holding which have a lower yield to maturity so I will get an instant gain which is always good. One of the guarantee companies has preference share capital of £200m so the security is acceptable to me.
  • Agree with zephyr, 7Y gits about .90 so this is plus 335, which is very high.
    Its a housing association essentially, they are not going to trash their reputation with a small issue which is backed by commercial arm.
    Bonds might go down as rates rise, who knows, but relative to others out there, eg A2D, yields 3 (22maturity) and 3.4 (26), this is cheap.
    Also a small issue to replace maturing current retail bond and keep diversification of funding, so priced to sell imo.
  • Still not been able to place an order with YouInvest, with them quoting technical issues.
    Nor can one place a verbal order!
    I'm not too pleased!
  • This is now available with Youinvest under New Issues.
  • Euro17, many thanks for the update
    Placed my usual order for a new retail orb bond.
    Helps with the portfolio diversification
    Like Gliderpilot, I have been reducing my exposure to some of the previous issues which have "lowering yields to maturity"
    Uncertainty with Euro Government gilts may persuade foreign investors to look at the London ORB bond market.
    Interesting times ahead.
    I don't have a problem with a 7 years bond
    With the record number of EU nationals coming to the UK, I cannot see "wage inflation" taking off,
    Re BRexit, the Conservatives will be committing suicide if they continue their "Exit" policy, the £ I think is gaining ground on the basis that a u turn is required (Houses of Parliament should have the final say, they are better informed than us (general public) as to what is best for England, Wales, Scotland, Northern Ireland), without forgetting our neighbours (Eire, France & Germany etc).
  • Another excellent analysis by Oliver. The most important aspect of the offering, for me, is the negative pledge. I will be subscribing for the income whilst not expecting any near term capital gain.
  • Travis Perkins ( owners of Wickes) 4.5% 2023, senior debt, is available below par. However, min. 100K..
  • Thanks very much Oliver for another comprehensive write-up , much appreciated
  • Thank you, Oliver for your time and effort in producing this review, read with much interest.
  • Places for People Finance plc has just announced that its 4.25% 2023 bond launch will now close on Friday (9 December).
  • My thanks also to Oliver - always worthwhile
  • Have applied for a few - its an issuers market but in the lower for longer world we are in for me coupon is commesurate with the risk
  • Ticker Code PFP2
    PLACES FOR PEOPLE FINANCE PLC STG 4.25% GTD BDS 15/12/23 (WI)

    Current price = 100.50 (Mid)
  • VSIVSI
    edited December 2016
    Anyone know when they are allocated and when do they start trading? Thanks.
  • Selftrade have allocated mine to me with a settlement date of 15 December (although the money has already left my account!). The security has been traded on a "when issued" basis so if it doesn't actually get admitted to trading proper any transactions are 'void'.
  • My allocations have appeared in my Youinvest and Selftrade accounts already. The Bond price is being displayed on the LSE website, but I a am not sure whether retail investors can trade yet.
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