I am watching the Provident (symbol PFG) equity as its drama progresses, and I decided to go have a look at their bonds:
http://www.londonstockexchange.com/exchange/prices-and-markets/debt-securities/company-summary-chart.html?fourWayKey=XS0459028626ZZGBPSTBS&ds=0
http://www.londonstockexchange.com/exchange/prices-and-markets/retail-bonds/company-summary-chart.html?fourWayKey=XS0496412064GBGBPUKCP
http://www.londonstockexchange.com/exchange/prices-and-markets/retail-bonds/company-summary-chart.html?fourWayKey=XS0900863084ZZGBPUKCP
http://www.londonstockexchange.com/exchange/prices-and-markets/retail-bonds/company-summary-chart.html?fourWayKey=XS1209091856ZZGBPUKCP
A few questions on these:
1) Are there others worth following besides the ones above?
2) Are there any unusual prospectus terms to be aware of on their bonds in general?
3) Does anyone know of a site that lets me set a price alert on individual bonds? The londonstockexchange site has a link to a price alert, but it appears to only accept equity symbols when you set up the alert.
4) Are any of these senior secured debt, and in an insolvency would debt holders be likely to get any of the equity in a reformed company? I'm familiar with the Chapter 11 process in the US for reorganization, but I have no idea on how it works in the UK.
5) Are all of these bonds paying interest in UK pounds?
It's interesting that the 5.125% bonds moved as low as 65% of par value when they first announced problems a few months ago. It recovered back to sub 90%. That's a pretty significant capital gain if they can recover to par, and it's a nice interest rate close to 8% if you are buying near that 65% of par.
Seems like the bonds are worthy of investigation.
The unstated premise for looking at the bonds in the first place is that usually the bond market is "smart" money when it comes to liquidity risk. So if you see bonds selling below 50% of par, that is usually a sign that liquidity risk is real and immediate. Having seen where the bonds traded, I was surprised to see that some of them might be decent investments in their own right, giving a substantial part of the return you would get from equity with less risk.
