Hi Jaranet, it was me who made a guesstimate regards interest rates for the US bond refinancing. We will see in July next year. My argument for meaningfully lower interest rates is based on TFC's business model being in far better shape then it was when the company pitched the notes to investors and also the proximity to the GFC which made TFC offer a pretty high interest rate. Even BLY just managed to get a 11% rate and I think their long-term outlook is a lot weaker than TFC's is!
I think you are being too pessimistic comparing TFC to TIM/GTP as TFC has successfully cycled through a commercial plantation, and its primary revenue channel is institutions who have proven to be repeat investors rather than the MIS sector that was subject to the whims of ATO rulings.
But I do find it hard to disagree with a negative short-term perspective for the share price. TFC have repeatedly reconfirmed FY15 guidance (to a reasonable extent 'in the bag' given expected timing of wholesale settlements) and have also provided snippets of positive news such as the 50kg sale to a fragrance industry company at $US4,750/kg. The market doesn't seem to be taking any interest in these positives, and given the nature of plantation investment and establishment any material 'new' positive news appears unlikely to be forthcoming over the remainder of the financial year. As for me, I'm comfortable waiting for the harvests to ramp up in a few years time.
TFC Price at posting:
$1.38 Sentiment: Buy Disclosure: Held
