By Jason Fittler
Halcyon is a fully owned subsidiary of Westpac Bank.
Halcyon Securities is a debt issuer and has invested in 120 domestic and international equities ranging from companies such as Accor Hotels (Listed in France) to John Deere (Listed in USA).
As these notes are fully capital guaranteed by Westpac Bank, there is little risk in not receiving your $100.00 per share at expiry in August 2010. Westpac would have to go under for this to happen. Whilst I consider it a possibility, I do not consider it very likely to occur.
The securities are currently trading at $94.00 and pay a 4.85% yield. As such you should have a return of 6% capital growth along with 4.85% income total return 10.85% for 13 months.
Please bear in mind that for each "credit event" that occurs within the portfolio of equities, the interest payment on these notes is stepped down by 25%. After four credit events the interest payment becomes zero. In this case you will only receive the 6% capital growth.
With the recent bankruptcy of General Motors the interest payment has been decreased by 25%. This is the first credit event for these notes.
If you are chasing a better return then current term deposit rates, take a closer look at this one.
If you would like more information on Halcyon Securities Limited (HLCHA) please give us a call on (07) 4771 4577.