Follow up question about Ester’s question on August 29. Can these bonds be redeemed prior to maturity and, excluding the credit risks , are there other material risks to be aware about these bonds or similar corporate bonds. Also, can you please confirm capital loss or gain don’t apply for registered accounts or TFSA. Thank you,
As a reminder, below are the bonds referenced in the question. Generally, bonds are not redeemable before maturity unless the company makes concessions with bond holders and these are approved. It is not common but does happen, but holders do get a say and can vote against a proposal. The main risks other than credit is liquidity. None of these are redeemable early. Canadian corporate bonds tend to be very thinly traded. No capital gains/losses would apply in any registered account.
) Laurentian: 5.75% due in 2032, priced at 98.30, with a BB (high) rating.
2) Allied REIT: 45.45% due in 2027, priced at 84.34, with a BBB rating.
3) Brookfield Property: 5.29% due in 2028, priced at 106.125, with a BBB (Low) rating.
4) Enbridge: 5.055% due in 2039, priced at 107.246, with an A (low) rating.
5) Sobey: 4.95% due in 2035, priced at 109.203, with a BBB rating.
6) Canadian Tire 4.947% due in 2035, priced at 107.574.