The information is on page 21 of the Third Supplemental Trust Deed under Consent Solicitation section of the Retail Bond Section of the Investors bit of the Enquest website. (Don't know why you couldn't find it - dandigirl !). Payment is by cash if " the average of the Daily Brent Oil Prices during the period of six calendar months immediately preceding the Cash Payment Condition Determination Date is equal to or above US$65.00" and the date is "the date which falls one calendar month prior to such Interest Payment Date". The important word is 'average', it doesn't have to be above $65 for the whole period.
Thank you geoffp: Found it earlier today. Think we are some way from achieving this so came to view that we should pass for now. Thanks again to you and to Laughton for pointing the way.
Add in rising price of Brent and these could yet turn out well for holders (already a heady yield as long as you don't mind being paid in more notes, for the time being at least).
Hello - Does anyone have any experience of buying mid-interest period and can inform how interest is treated? Is the buyer required to pay in "cash" for the interest and, currently, receive all in notes on the next payment date? Thanks.
I just put a dummy "get quote" request online with iDealing. They gave a quote and included dealing cost but had zero showing as Accrued Interest. "Ex div" is Feb 12 so that looks as though you could buy this week and most of next and pay nothing for the PIK notes that you would then receive on Feb 15th.
But I obviously didn't complete the purchase so that might not be 100% correct.
Does your platform not do something similar (get a definite quote and list additional costs/charges/accrued) and then give 15 secs to confirm purchase or lose quote?
No, unfortunately. A J Bell are hopeless at most fixed interest although Prefs can be bought online. Tried putting in ENQ1 and it wasn't recognised. Thanks for trying. Maybe a phone attempt next week.
Have a view that oil will continue to rise. Just below $60 earlier. Will keep our PMO1-PMO. Still dithering over ENQ1.
I've just tried a similar 'buy' on EQi and got the "Unfortunately we are currently unable to execute your trade online" message so I'm none the wiser either! Its almost worth a small investment just to test the theory.
Interesting. But why? Do you expect the price to drop solely because the interest has been paid? So rather like a share price dropping by an amount equal to the dividend once it goes xd?
I shall now be paying attention to the bond price either side of Feb 12 to see if that does happen (I've never thought about it before). If not then you're missing out on the "discount".
As I've said, I already hold loads and increasing at each PIK issuance date so no real interest in buying more.
hi all - I use EQI and I can confirm since the PIK TOGGLE conversion you there is no accrual to pay/sell so it works like a share. I also note the ex-div date seems to vary and the price rarely moves on ex-div morning. Shame really that the spread generally eats up the difference.
No, not a price thing, nor an ex-divi thing as that was clarified by the company 29/01. In my simple mind I thought that if I had to settle someone else's interest, it would be nearly 6 months worth now but only a few days worth after the 15th.
OK - We did it. Details so far - only price paid 83.244 - a bit inside the LSE spread of 84 + the dealing charge. There might be a change at settlement.
Noticed the bulletin of 29/01 referred to a record date of 12/02. Is that what you were referring to Laughton? Seems that we will receive the full 6 months PIK? Will post when it becomes clearer.
12/02 - yes. So, if I'm correct (always a dangerous assumption) you should now have y number of bonds and after settlement date (on or about Feb 15) you should have y x 1.035 bonds. Don't ask me what happens to fractions of a bond.
I can't see how figures would be different on settlement - if they are then I'd complain.
EQi have always credited me with 'fractions' in cash shortly after the addition of the PIK. The calculation is based on the latest bond price at the time.
Thanks for the pointers, dandigirl - it saved going through all the pages! The references to re-financing were interesting. I doubt whether we could expect a simple extension for some more years at a similar rate of interest but I'll live in hope.
Last week ENQ announced a new debt facility which allows for some refinancing.
Link below.
ENQ1 now up to 97.
It does seem to me that the oil price will average above 65 to allow payment in cash this time around if the price continues to hold at current levels.
The price must average over $65 over the 6 months prior to the Determination Date, which is 1 month before the payment date. So the relevant period is 15 Jan. to 15 July. As the price was below $60 for the period 15 Jan to 15 Feb, I think it is not clear that the price will average over $65 for the relevant period. Looking at the graphs it seems to be borderline. We'll know at the end of July as Enquest put a notice on their website as to whether there will be a cash payment or a PIK for the payment due 15 August.
The Brent average since 15th of January has just hit $65.0 so the price would have to drop quickly below $65 and remain there for the cash payment not to be made.
Yes - I got $65.12 from 15 Jan to date. There was a recent RNS that was light on details but seems to suggest they are in the process of refinancing their senior credit facility. If this succeeded then this could mean the PIK mechanism might end.
Comments
https://www.londonstockexchange.com/news-article/ENQ/operations-update/14852294
and another acquisition so more equity headroom:-
https://www.londonstockexchange.com/news-article/ENQ/operations-update/14852294
sees bonds jump 7% this morning.
Add in rising price of Brent and these could yet turn out well for holders (already a heady yield as long as you don't mind being paid in more notes, for the time being at least).
But I obviously didn't complete the purchase so that might not be 100% correct.
Does your platform not do something similar (get a definite quote and list additional costs/charges/accrued) and then give 15 secs to confirm purchase or lose quote?
Have a view that oil will continue to rise. Just below $60 earlier. Will keep our PMO1-PMO. Still dithering over ENQ1.
But bear in mind that these PIK notes are issued as though they cost £1 each and NOT the actual price of the bonds.
I shall now be paying attention to the bond price either side of Feb 12 to see if that does happen (I've never thought about it before). If not then you're missing out on the "discount".
As I've said, I already hold loads and increasing at each PIK issuance date so no real interest in buying more.
Noticed the bulletin of 29/01 referred to a record date of 12/02. Is that what you were referring to Laughton? Seems that we will receive the full 6 months PIK? Will post when it becomes clearer.
I can't see how figures would be different on settlement - if they are then I'd complain.
+ with Redistou confirming that it was like a share, I went for that small buy this afternoon.
Thank you, both. Helped stopped the dithering.
Got a Contract Note now - no changes.
Oil price at 60.61 this evening. Think I may regret not buying more.
Their px target is 30p (nearly 2x where it opened this AM) and they think at $60brent, FCF will cover all debt in ~4yrs.
https://www.telegraph.co.uk/business/2021/02/17/peak-oil-demand-coming-first-brace-almighty-supply-crunch/
If interested in ENQ/ENQ1, suggest a read of pages 14/15, the Going Concern and Viability Statement, and Access to Funding on p16.
Link below.
ENQ1 now up to 97.
It does seem to me that the oil price will average above 65 to allow payment in cash this time around if the price continues to hold at current levels.
https://www.enquest.com/media/press-releases/article/enquest-signs-new-senior-secured-borrowing-base-debt-facility
I think you are right about payment in cash. here is a link to the chart
https://tradingeconomics.com/commodity/brent-crude-oil
At february 15th it was just shy of $64 and apart for a short period in March and early April has traded comfortably ahead of $65 per bbl
Thanks for clarifying