Old Mutual 8%

Been watching this one for some time. Possible addition to my pension (aware its 100k lots) and the price has been consistently dropping of late and the yield is now over 6%.

Anyone have a view on this issue?

Comments

  • The problem with Old Mutual is that although headquartered in London and a FTSE 100 company, their South African heritage has always concerned me. Given as you point out the yield is 6%+ I appear not to be the only one who is concerned.

    I invest in corporate bonds so that I can sleep at night, given that South Africa seems always one step away from the rest of Africa, my need for a good nights sleep has always trumped my greed.
  • I was looking when it was yielding 5.5%. Agree on South Africa, however it's a massive company with a market cap of £10bn+. What's spooked me is the drift of the yield out to 6.2%
  • If you can accommodate a 100k purchase, and can live with OML( subordinated) credit risk, same as 8% one, and do not mind a longer maturity, then the new 7.875% 2025, at around 103 is worth considering.
  • Thanks Fang. I'll take a look at that one. Also the coupon/yield on the new issue may go some way to explaining the drift in yield on the existing issue.
  • Patience and caution pays off. Now yielding nearly 8%. Always also had my eye on the Investec 9 5/8% issue which has also fallen and now yields about 6.75%.

    Big lump needed, so further caution required, however, both issues look very appealing at the moment, although I'd only buy one out of the two.
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