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Gulf Keystone – the Bond Market tells you this is Junk

Tom Winnifrith
Friday 21 March 2014

The share price of Gulf Keystone (GKP) is driven by private investors. The bond price is driven by more informed individuals and it is now screaming out JUNK!

Two days ago the October 2017 6.25% bonds were trading at 88p. Today they are trading at 75p. That means that implied yield to maturity is c15%.. I.e. if you buy these bonds in the secondary market you will get an annual return (assuming that Gulf can repay) of 15% per annum. That is a junk bond type return.

Now ask yourself 

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About Tom Winnifrith
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Tom Winnifrith is the editor of TomWinnifrith.com. When he is not harvesting olives in Greece, he is (planning to) raise goats in Wales.
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