‘There are better investments than the new Atenor bond’


A tracker that invests in high-yield bonds or Atenor stock are more attractive than the new bond of the real estate group. That’s what analysts say.

Real estate developer Atenor will launch a double bond issue on Friday, mainly aimed at private investors. He wants to raise 70 to 100 million euros.

What are the terms of the bonds?

Atenor issues two different bonds. The bonds with a term of four years are issued at 101.625 percent of the nominal value. That means that you pay EUR 1,016.25 for a bond of EUR 1,000. The gross return therefore falls to 2.81 percent and the net return after withholding tax is 1.85 percent.

The bonds offer 1.85 percent net over four years and 2.37 percent net over six years.

The six-year bonds are issued at 101.875 percent of the nominal value. Their gross return is 3.52 percent and the net return is 2.37 percent.

The yields of the Atenor bonds are higher than those of the Bekaert bond issued last week. The steel wire group offered 1.64 percent net for a seven-year bond. Compared to Bekaert, Atenor is a smaller company and less well known to the general public.

Why does Atenor issue bonds?

Atenor will use the proceeds from the bonds to purchase new projects. The core of the strategy is the development of large, mixed urban projects. The portfolio consists of 72 percent offices, 21 percent residential real estate and 7 percent retail (shops).

Atenor can temporarily also use the proceeds to finance construction work on projects that have been granted planning permission. The remainder is used to repay short- and medium-term debt.

What are the risks?

The corona crisis may mean that it takes longer to obtain permits or that companies take a longer decision about the rent of offices. “One point of attention is that almost 80 percent of the activity consists of office real estate,” says Alexandre Goldwasser of the Goldwasser Exchange exchange house. ‘That could be a problem if the demand for offices were to fall.’

The corona crisis has significantly increased teleworking and it looks as if teleworking will remain more popular after the crisis than before. This can result in companies renting or buying less office space.

KBC, one of the accompanying banks, gives Atenor’s bonds a product score of 4 on a seven-point scale. Score 1 applies to highly defensive products, score 7 for highly dynamic investments. KBC says that Atenor’s bonds are primarily aimed at investors with a dynamic risk profile.

Are the bonds worth buying?

Pieter De Ryck, bond specialist at the private bank Van Lanschot, does not think so. ‘These are very small issues, the liquidity on the secondary market will be nil. In addition, returns are clearly returns for high yield bonds.

High yield bonds are bonds of companies that receive a junk rating from credit rating agencies such as Standard & Poor’s and Moody’s. Atenor has no credit rating. But the real estate developer might get a junk rating if he requests a rating.

A possible alternative to the Atenor bonds is the tracker iShares euro high yield corp bond, says De Ryck. ‘This tracker invests in bonds of hundreds of companies, has a gross yield of 3.89 percent and a weighted average term of 3.8 years. The return is therefore higher and the risk lower than that of the Atenor bonds. ‘

The dividend yield of the Atenor stock is higher than the yield of the bonds.

Goldwasser calls Atenor financially very solid and says that the group is well managed. But he also sees an alternative to the new bonds. ‘It may be more interesting for an investor to buy the Atenor share than the bond. The fall in the share price has pushed the gross dividend yield up to 3.8 percent (2.6% net). The dividend yield is therefore higher than the yield of the new bonds. ‘

But some investors want to invest part of their portfolio in bonds. “If an investor has confidence in Atenor, I would recommend buying the six-year bond,” says Goldwasser.

Where and when can you register?

It is best to turn to Belfius or KBC, the banks that supervise the bond issue. The registration period starts on Friday, October 16 and runs until Tuesday, October 20. But it can be closed early if demand for bonds exceeds supply.

Experience shows that registrations usually close after one day. There is great interest in Belgian corporate bonds because many investors are looking for fixed-income alternatives with a somewhat higher return than savings accounts, savings certificates and term accounts.

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  • Atenor wants to raise up to 100 million from small investors

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