Recommending to read a few lines @ The Street about HGSH and others like them.
Again can't understand when most of you posted about “LEVERAGE” talking about the last XIN bond paying 12/13%.
Yesterday went to our nearest real free market in front of the river (Uruguay) for two bank meetings.
When started the discuss about different kind of investments one accounts officer clearly said about XIN: to have taken a loan of 230 million at that rate was a very good decision.
In fact, XIN Bloomberg trading page has both quotes: their bond and the ADS at the same level.
If you want above a 12% you may buy their bond. If you prefer the risk keeping the stock by the divi... It's our choice and nothing to do about it.
Took my opportunity to comment Hominid’s post talking about his WFC rates and their spread between being a one year creditor receiving below 1% and taking some debt paying above 20%.
That's absurdly illegal.
(In a reasonable country like Uruguay the relationship is 1% for creditor’s vs 18% for loans in dollars: similar spreads).
Finally we all agree that an annual lend below 15% IS NOT LEVERAGE.
If you accept repeating my experience with FOREX.
Everybody there may bet decimals, hundredths and even thousandths and each currency is multiplied x 100 on the cheapest options. THAT"s A REAL LEVERAGE.
Like Bear Stearns or Mr LEHFuld few years ago when 10/12 houses has a real value around 200 lendings properties and nobody can pay one sqm