ENQUEST BOND ENQ1

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Comments

  • In a perfect world, you're probably right VSI but with the amount of nervousness and lack of liquidity surrounding ENQ1, Keith's arbitrage might pay off. However, if you plot ENQ1 and PMO1 for a comparison over the last 12 months, ENQ1 is ahead of PMO1, which would tend to suggest a factoring in of the extra rights entitlement but the picture is not that clear. We'll have to observe what happens in the trading prices around the next payment date in February. Markets don't always work as smoothly as one would imagine.
  • Finn2, I think you might be giving me credit which I don't deserve. I had to look up what "arbitrage" meant! I was thinking more along the lines that at some point the bonds would go "ex-dividend" like a share does at some point before the payment date. If that doesn't happen then thinking it through I suppose there will be a drop post allocation, but the bonds have done very nicely this week so as long as there's not an absolutely awful correction, I think I'll be happy come pay day. The shares are doing well also on the back of the Armada Kraken's apparently uneventful journey and barring disasters/long delays between now and deployment the coming weeks and months should be good. Thankyou all for your responses. If I clear anything up with the Company I'll let everyone know.
  • Keith - I'm with you, if they are going to credit the PIK bonds on February 15th then I would have thought that there must be the equivalent of an ex div date. There's no way they can cope with crediting PIK bonds to someone who purchased his holding on Feb 14th for instance. If the company does return your call you might add this query to your list.

    Finn - My feeling is that the bonds have been creeping up more in response to the increasing share price, the fairly robust oil price and the outlook for the company post Kraken - which does appear to be progressing well and possibly ahead of schedule. Of course, the weather in the North Sea can be hazardous at this time of year so production might easily be some way off yet.
  • I have asked Enquest investor relations about the record / ex date and mechanics of the PIK payment and have posted the response together with my subsequent digging on the Enquest thread in my forum at - https://www.fixedincomeinvestments.co.uk/boards/
  • That reads like a classic Sir Humphrey speech from "Yes, Minister"! Barring anything unforeseen I think I'll hold what I've got till maturity, just to keep it simple. Thanks for the info anyway MT-I'm still waiting for a response from them.
  • KeithB1 - I followed up with 'Sir Humphrey' and have now received a much more helpful response which I have shared on my forum at -
    https://www.fixedincomeinvestments.co.uk/discussion/topic/enquest-retail-bond-enq1-restructuring/page/2/
  • Hello all, just a quick question regarding the PIK payment. How will they handle the minimum denomination of 100 units. Will they round down?
  • Mark Taber
    Thanks so much for your work unravelling this. Much appreciated.
    Douglas
  • As a result of the Cash Payment Condition not being satisfied in respect of the Interest Payment Date falling on 15 February 2017, accrued interest on the Notes from (and including) 15 August 2016 will be capitalised and satisfied through the issue of Additional Notes in an aggregate principal amount of £5,425,000. The Additional Notes will be issued by the Company on 15 February 2017 and, upon listing, will be consolidated and form a single series with the existing Notes in issue. The aggregate outstanding principal amount of the Notes, as increased by the issue of the Additional Notes, will be £160,425,000.



    The Record Date for determining the entitlement of individual Noteholders to Additional Notes will be the close of business on 31 January 2017.



    Admission of the Additional Notes to the Official List of the Financial Conduct Authority and to trading on the London Stock Exchange's electronic order book for retail bonds is expected to take place on (or shortly after) publication of the Group's preliminary results for the financial year ended 31 December 2016.
  • Hi folks. Does it follow from the last paragraph of Laughton's last post that the new notes will not appear in our portfolios (whoever they're managed by) until last year's results are published?
  • That's the way I read it. Enquest says:- "

    ........ preliminary results for the financial year ended 31 December 2016, which are scheduled to be released on 21 March 2017. Due to the group’s close period prior to release of the 2016 preliminary results, admission cannot take place earlier; however, Additional Retail Notes will still be issued on or about the relevant interest payment date, as described above.
  • On another note, and in case bondholders don't keep up with day to day events on Enquest, the extra big Kraken Armada ship that they use to recover oil from under the sea has recently arrived on site and appears to be connecting up. I'm guessing the weather up there is a big factor as to progress before they start pumping oil but that could start as early as April.

    If oil stays around current price we could see share price and bond price pick up again in the not too distant future.
  • Sorry - I sound as though I'm trying to ramp up the share price but really am only providing info for ENQ1 holders. RNS out this morning as follows:-

    ENQUEST PLC, 17 February 2017
    Development update: Kraken FPSO in the field and hooked up

    The Kraken development

    The Kraken Floating Production Storage and Offloading ('FPSO') vessel arrived at the field on Monday 13 February, anticipating good weather conditions. The hook up of the Submerged Turret Production ('STP') buoy mooring system, to the FPSO was completed on 15th February and a full rotation test performed so that the vessel is now on station and securely moored. Commissioning work will continue on the topsides. Reconstruction of the turret area pipework and connection of the risers and umbilicals to the swivel stack is being undertaken followed by commissioning of the subsea infrastructure. Delivery of first oil in Q2 2017 is on track.

    ENQ1 up just over 3% this morning.
  • I hold shares in Enquest as well as the bonds so feel free to do a bit-not too much, mind-of ramping, Laughton. The bonds were up as well yesterday, but I can't make my mind up what prompted that as they've been pretty static lately, even down a bit. Was it Kraken hooking up, or oil price perhaps? I can't see that the issuing of new notes would be a factor but the rise has coincided with the "payment" date. Anybody any ideas?
  • I think it was a result of confirmation that the FPSO had arrived on site and hooked up.

    Up until then I felt Enquest had been very quiet about progress - almost as though they wanted it to be a secret.

    People feeling a bit more confident that oil production is in sight and once it starts flowing then debt will start being paid off. I can't remember what Enquest's cost of production is but it's a LOT lower than the current oil price.


  • Boycie - March 10th Has anyone queried the change to Gross Redemption Yield since issue of new bonds? My broker has confirmed that redemption value per bond remains at £1. Therefore at current price surely redemption yield should be greater than running yield. My brokers GRY figure is the same as quoted on this site. They have now admitted it is wrong and are investigating.
  • S&P Global lowers Eros International rating to 'B-'
    Disclaimer : I don't have a position in ERO1, I sold a while ago @73ish,

    FYI


    http://www.outlookindia.com/newsscroll/sp-global-lowers-eros-international-rating-to-b/1006151


    New Delhi, Mar 13 S&P Global Ratings has lowered the rating of Eros International to 'B-' and placed the same on credit watch negative owing to high refinancing risks.

    "... Lowered to 'B-' from 'B+' its long-term corporate credit rating on Indian film production and distribution company Eros International Plc. We also lowered our issue rating on Eros' proposed notes to 'B-' from 'B+'," S&P Global Ratings said in a statement dated March 10.

    "At the same time, we put our ratings on credit watch with negative implications."

    The 'B' rating means the entity carries the capacity to meet its financial commitment though there is a heightened risk of vulnerability.

    The agency attributed its action on Eros to "the increasing refinancing risks resulting from its inability to place the proposed notes and arrange other alternative facilities". The credit watch placement reflects the possibility that the company could fail to make timely payments on its banking facilities, it added.

    "In our view, Eros' withdrawal of the notes raises the refinancing risk on its upcoming maturities while it continues to work on alternative means to refinance them. We understand from Eros that it is currently in advanced stages with its financiers to secure new facilities to refinance its maturities of about USD 95 million due March 31, 2017," it said further.

    Nevertheless, "we believe there is a risk that securing alternative finance and timely disbursement to repay the revolving credit facility may take more time, potentially beyond the due date of the facility".

    The rating agency also referred to the option for Eros to use its cash of USD 135.8 million as of December 31, 2016 to avert any potential missed payments. "However, we are not sure about the company's willingness to use most of its cash to repay the upcoming maturities in full and on a timely basis. Also, in the case of cash being applied for debt maturity, the company's ability to spend on content creation will be significantly curtailed, impeding its business position," it noted.

    "We will resolve the credit watch depending on the progress on Eros' refinancing over the next week. We will likely downgrade Eros if it is does not make significant progress over the next week and thereby further increases the risk of potential missed payments," it said.

    According to the statement, a timely payment of its March 31, 2017, maturities could result in S&P Global Ratings' affirmation or raising the rating after taking into account the company's risk management practice as well as future funding and liquidity position.
  • Wrong, problem child!, I'm more positive about ENQ!
  • Am I the only investor not to have had the "bonus bonds" allocated by his broker?
    I thought that these would be issued late in February but now it's April and still no sign. BTW with iDealing.
    Advice or comments anyone

    Steve
  • Selftrade allocated my extra bonds shortly after the normal interest date but, as yet, they appear as a separate holding without any value attributed. Results were announced 21 March so I would expect some action soon.
  • YouInvest have allocated the extra bond, now showing with value, same as original.
    Different SEDOL code

    ENQUEST PLC 7% MTN 15/04/22
    GBP1 (SEDOL:BF0S956)
    140 75.98
    ENQUEST PLC 7% SNR EMTN
    15/02/22 GBP100 (SEDOL:B7M3NB7)
    4,000 75.98 GBP

    Hope this helps
  • H-L have the originals @ 74.95p and the new ones @75.98p. Just got back from a few days away so haven't had chance to ask for an explanation. Does anyone know why there are 2 different prices?
  • Selftrade still have not converted the notional bonds into the ENQ1 bonds in my account. However, this does not surprise me as they are always a few days behind other brokers in delivering coupon payments !
  • Euro17 - you're lucky. iDealing don't even show the "notional" bonds.
  • Response from Selftrade regarding the 'notional' Enquest bonds :

    Thank you for your message. We are unable to provide any information in regard to specific actions as we are an execution only broker and information in regard to this will be sent to accounts via a corporate action notification as when we receive it.
  • So far as I can tell ENQ have not yet applied for listing of these additional notes. They should have done so after their prelims were released on 23 March. Until they do so I think we're stuck with untradeable off-market notes.
  • Hargreaves Lansdowne sensibly show the PIK bonds as a distinct line in my valuation, with a value, and a note that says "this stock is an interim line resulting from a corporate action that will be exchanged for cash and/or stock" ... that seems an appropriate way of dealing with the situation. Then on this link http://www.enquest.com/investors/retail-bond.aspx is the updated FAQ from the company that currently says "EnQuest anticipates that admission of the Additional Retail Notes issued on 15th February 2017 to
    the Official List and to trading on the LSE's electronic order book for retail bonds will take place around 22 April 2017" although I would urge all to read the entire FAQ before taking any action.
  • I emailed Enquest about 2 weeks ago and not unsurprisingly have not yet received a reply.
    In general iDealing say that same as HL but as previously said do not show anything in my portfolio.

    Watch and wait I guess

    Steve
  • Listed today, at last:
    ENQUEST PLC UNITED KINGDOM 7.00% EXTENDABLE PIK TOGGLE NOTES DUE 15/04/2022; FULLY PAID; (REGISTERED IN DENOMINATIONS OF GBP1.00 EACH) GBP 5424998 Standard Debt XS0880578728
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