SAKHA is debt and has no related equity. But MAP has an interest...

SAKHA is debt and has no related equity. But MAP has an interest in Sydney Airport so this is best forum for SKIES.

Seems it has been oversold by funds after it went EX DIV on 14 April.

SAKHA notes are “Skies” being "Sydney Kingsford Smith Airport Interest Earning Securities”. Issue is rated S&P BBB-.



http://www.sydneyairport.com.au/SACL/SKIES-Publications.html

SKIES pay 1.8% over bank bills until Jan 2012 then step up and pay another 2% margin. Based on purchase at $60 (for $100 face value), assuming they redeem in 2012 to avoid the penalty interest, (and BBSW of 3.5%), I calculate rate of return is equivalent to around 31.6% PER ANNUM.

If however they are happy to pay the higher interest of 3.8% over bank bills, worst case they MUST redeem in 2016 (defined fixed maturity), and rate of return then becomes 18.3% PER ANNUM.

(Bulk of return is capital gain on redemption);

Any views?