The repayment is neither here or there.
This fixed rate Shandong loan of 4.65%pa maturing in Dec 2026 was nearly beneficial to them in that they could have nearly stuck that amount in a AUD 4 year term deposit, entered into some FX swaps, and come out on top. Nearly. More likely, Shandong can get a better return than 4.65%pa given the current interest rate environment and just wanted the money back. The joys of a related party loan. It was cheap for YAL when it was needed (fair value apparently 12%pa) and provided Shandong with an ok return at the time. Now the loan is not needed and Shandong can get more $ elsewhere (or paying off their own debt which would cost more than 4.65%pa if floating rate)
The USD333m remaining on the syndicated loan would easily cost more than 4.65%pa (4.88%pa in H1) -- why didn't they pay that off first? (prohibitive break fees could be a reason, in which case it will just term out in 2H 2024 and 2H 2026)
(more detail on pages 50-51 of the half yearly for those who can be bothered to read it)
"the repayment of debt allows more franking credits to accumulate."
negligible relationship between debt levels and franking credit accumulation. Having this fixed rate debt reduces profits by only a tiny bit given that it is offset by interest received on floating rate cash holdings. And as discussed above, they can nearly make a profit on the loan if they put it out as a term deposit.
- Forums
- ASX - By Stock
- YAL
- Ann: Yancoal debt prepayment of US$459 million
Ann: Yancoal debt prepayment of US$459 million, page-13
-
- There are more pages in this discussion • 23 more messages in this thread...
You’re viewing a single post only. To view the entire thread just sign in or Join Now (FREE)
Featured News
Add YAL (ASX) to my watchlist
|
|||||
Last
$5.25 |
Change
-0.140(2.60%) |
Mkt cap ! $6.932B |
Open | High | Low | Value | Volume |
$5.39 | $5.42 | $5.17 | $22.95M | 4.374M |
Buyers (Bids)
No. | Vol. | Price($) |
---|---|---|
1 | 8790 | $5.25 |
Sellers (Offers)
Price($) | Vol. | No. |
---|---|---|
$5.26 | 6233 | 2 |
View Market Depth
No. | Vol. | Price($) |
---|---|---|
1 | 8790 | 5.250 |
1 | 15480 | 5.240 |
1 | 15031 | 5.230 |
5 | 65167 | 5.220 |
2 | 28969 | 5.210 |
Price($) | Vol. | No. |
---|---|---|
5.260 | 6233 | 2 |
5.270 | 10000 | 2 |
5.290 | 9281 | 3 |
5.300 | 20354 | 2 |
5.310 | 15031 | 1 |
Last trade - 16.10pm 11/09/2024 (20 minute delay) ? |
Featured News
YAL (ASX) Chart |