Morgan’s fixed income analyst, James Lawrence, has joined the number of analysts who are keen on Origin Notes as a short term investment. In a recent research note he wrote, “Based on a price of $97.70 we forecast a yield to call for investors of 9.45% which we view as compelling.” He expects the notes to be called in December 2016 because of the company’s previous statements regarding its intention to redeem at that time and the loss of the notes’ “equity credit” in the same month.
S & P and Moody’s viewed the notes as part equity for balance sheet purposes when the notes were first issued in 2011 due to the existence of a 2071 maturity date. The loss of this equity credit will mean the ratings agencies will view the notes as pure debt, which would increase the company’s gearing ratios if the notes are not been redeemed.
Related Articles
Origin clarifies its debt position
Origin Notes at 7.91% a “buying opportunity”
Origin Notes energised after capital raising
Origin Energy to redeem hybrids at ‘first call’