Q: Please provide your current views concerning EIF, what items might cause pause concerning the monthly dist? -thks
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Investment Q&A
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Q: I would like to know if the new debenture issue being offered is safe for capital preservation and if there is anything about this offer such as the conversion of the debentures to equity and its other terms such as early redemption rights after the first 3 years, that would have a major impact on the debentures value and liquidity for a 5 year hold. What would these debenture rate as? Is there a fair possibility of future capital gains based on the conversion price of $44.75 per Share. I presently own 100 shares of EIF and am thinking of buying these debentures for an RRSP and or TFSA for a minimum 5 years or longer. Are there better and safer fixed income opportunities at the present time, that pay a 5.25% dividend that one could invest in?
Thank you for your answer.
Joseph
Thank you for your answer.
Joseph
Q: Hi 5i,
I have some Exchange Income series G debentures, which were purchased at a discount to par and are now trading above par. Also, the EIF share price has just nudged up through the debentures’ conversion price. The issue does not mature until 2021 and the 6% coupon is still yielding over 5.5% at the debentures’ recent trading price, a better yield than any fixed income alternatives I have in mind right now. I purchased the debentures primarily to increase my overall fixed income yield and secondarily because I thought they also had some capital appreciation upside. They are held within my RSP so, whatever I do with them, there would be no immediate tax consequence. What I am looking for is a little help with the thought process on whether the unrealized capital gain and the move up through the conversion price suggests that I ought to be taking any action, or whether I should just continue to hold them for their bond qualities. Are there any rules of thumb in these circumstances with this kind of investment vehicle? The increase in value of the debentures is not enough to have substantially altered the balance between fixed income and equities within the RSP. So I wouldn’t need to trim them based on rebalancing the fixed income/equities mix alone. My overall investment time horizon extends well beyond their maturity date. Thanks for any thoughts.
I have some Exchange Income series G debentures, which were purchased at a discount to par and are now trading above par. Also, the EIF share price has just nudged up through the debentures’ conversion price. The issue does not mature until 2021 and the 6% coupon is still yielding over 5.5% at the debentures’ recent trading price, a better yield than any fixed income alternatives I have in mind right now. I purchased the debentures primarily to increase my overall fixed income yield and secondarily because I thought they also had some capital appreciation upside. They are held within my RSP so, whatever I do with them, there would be no immediate tax consequence. What I am looking for is a little help with the thought process on whether the unrealized capital gain and the move up through the conversion price suggests that I ought to be taking any action, or whether I should just continue to hold them for their bond qualities. Are there any rules of thumb in these circumstances with this kind of investment vehicle? The increase in value of the debentures is not enough to have substantially altered the balance between fixed income and equities within the RSP. So I wouldn’t need to trim them based on rebalancing the fixed income/equities mix alone. My overall investment time horizon extends well beyond their maturity date. Thanks for any thoughts.
Q: I have been holding, and hoping, for Air Transat (trz) for over 2 years now. My loss on paper is 30%.
Does it make sense to hold further for a recovery or is it better to bite the bullet and redeploy in the same sector ? But where ?
Many thanks,
Jacques
Does it make sense to hold further for a recovery or is it better to bite the bullet and redeploy in the same sector ? But where ?
Many thanks,
Jacques
Q: Your response to nicholas on EIF gives me comfort to continue to hold it for yield. The article in today's Globe ROB says the exact opposite about the coverage ratio. Can you comment on what the coverage ratio is? Both of you base it on cash flows but article concludes there is absolutely no cash available to cover dividends once you factor in capex spending and therefore our dividends are surviving only on debt and equity issues. Thanks again. John C.
Q: I am suffering from (FOMO) "fear of missing out" in regards to EIF. It's been on my watch list for months but has not given a pull back for entry. Is the valuation getting ahead of itself here or should I just buy it. I like it for its yield.
Nicholas
Nicholas
Q: What are your thoughts on EIF for growth and stability within an RSP for a 5+ year hold period? Thanks in advance.