Wednesday 06 February 2019 by Elizabeth Moran Trade opportunities

Take advantage of a Virgin anomaly

Flight delays are one of the bug bears of travelling but switching out of the shorter dated Virgin 2019s and into the longer dated 2021s and the move could be one delay you’ll be happy about 

Virgin Wirehero resize 2

Around half of FIIG clients invest with a ‘hold to maturity’ strategy. But there are times in the market where prices move – which can be for a number of reasons – and it’s good to pause and assess the possibilities.

In just ten months the USD Virgin 2019 bond is due to mature and we expect will be repaid by the company.

The bond had been heading towards par, as you would expect with less than 12 months until maturity, but the price recently spiked again delivering the an opportunity to investors prepared to trade.

Investors can exit at a good price and reinvest in the longer dated Virgin USD bond maturing in October 2021.

Virgin article chart 2

Note: Prices are accurate as at 6 February but subject to change.

You get to keep exposure to the same issuer and the US Dollar, but extend maturity for approximately two years as well as pick up 1.12% in yield to 7.5%pa.

 This close to maturity, the Virgin 2019 bond price should be lower.

These anomalies don’t tend to last, so if you are interested please call your Relationship Manager