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PPF Financial Holdings
Why buy this bond?
An excellent alternative to anti-inflation bonds
Bonds can either have a fixed coupon that does not change over time, or a variable, so-called " FLOAT " coupon.
In the event of a further rise in rates, the bonds will reflect this rise in their interest.
Ask without obligation
PPF Financial Holdings
An international investment group that was founded in the Czech Republic and has its official headquarters in the Netherlands. Since 1991, it has been investing in a number of industries, from financial services to telecommunications, biotechnology, real estate, and engineering.
Complete information
Issuer
PPF Financial Holdings BV
The name of the issue
PPF Financial Holdings, FRN 18Dec2027
Currency
Czech crown
Emission volume
4,000,000,000 CZK
The face value of the bond
100,000 CZK
Indicative market price
98,000 CZK
Discount
Coupon from face value
2,000 CZK
2.5% p.a
Coupon payout frequency
semi-annual salary
Due date
18/12/2027
100% liquidity
Yes
Minimum volume
$100,000
Yield to Maturity
7.40% pa - before taking into account all costs
Hierarchy of debt
Subordinate
You can find the prospectus for the bonds here:
2.5% Subordinated Unsecured due 2033 - Prospectus
How to profit from inflation and rising interest rates
The current situation surrounding price growth gives the central bank room to raise interest rates above the level of the long-term target, which is around 2.5%.
This rate is not set randomly. The reason for the 2.5% is the long-term inflation target of 2%. In such a situation, even money deposited in completely risk-free deposits does not lose its value.
Lower rates are the cause of investors' need to take more risk to maintain the purchasing power of money. Conversely, higher rates dampen investment in riskier assets such as stocks or lower-quality corporate bonds.
Float bonds
Floating rate bonds
Bonds can have either a fixed coupon that does not change over time, or a variable, so-called "FLOAT". By default, this float is tied to some hard indicator, such as inflation or interest rates. Inflation bonds are actually FLOAT bonds, as their rate changes every year according to the rate of inflation achieved.
Some bonds can even be a combination, i.e. that they carry a fixed fixed rate and a variable rate is added to that. This is the case of the bond whose parameters I am sending below.
Summary
Bonds are an excellent alternative to anti-inflation bonds, as rates will stay higher when inflation persists. However, even if the inflation target is met and rates fall back to 2.5%, the bond will yield approx. 5%.
In the event of a further rise in rates, the bonds will reflect this rise in their interest.