Ann: Dividend/Distribution - AYUPA, page-33

Nice post brenid, I checked and yes AYUPA was issued during a period of nearly zero interest rates.


So yes, maybe the prefs won't trade at $100 for a while, but at $75odd dollars they don't need to. Interest rates will come down, its just a manner of when!!! In the mean time I collect dividends based on that $100 par value. So I am happy to wait.

At today's closing price of $75, the yield is
5 x 100/75 = 6.6% fully franked. If AYUPA doesn't give me franking credits, then I get more dividends to make up the difference (they have no choice on this, its in the prospectus). This a 9.4% gross yield.

And unlike bank stocks, this yield is locked in.