Guy, Good questions, but I will fumble some of the answers. 1. The NC in HNC is non-callable. I don't know what the H means. I don't know what they mean by provisional, either. I would have to see the prospectus for that one. I know what provisional means, but I don't know what their provisions mean.
2. It is the latter one. Also, remember, the 3.5% is based upon $100. If you pay more or less, the yield is different, though the rate is the same. You get 1.75 every six months, but that is more than 3.5% if the bond is at $90 and less if it is at $110. You probably know all this stuff, but I just mention it for other readers.
3. The yield to maturity is basically the 3.5 divided by the price, added to the appreciation or depreciation to the $120 redemption price. 20 points over 5 years would be more than 3.5% a year, so the yield to maturity would be greater than 7% if the bond is selling at par, so my guess is that it is not being issued at par.
I probably need to see the offering document and the pricing to really make sense of this. I would certainly need more information about the initial price. |
