Investing

Buying individual bonds

  • Last Updated:
  • Jul 22nd, 2017 1:59 pm
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Deal Addict
Apr 27, 2015
3051 posts
1745 upvotes
Mississauga

Buying individual bonds

So far I was buying only bonds ETFs, and was thinking maybe it worth to consider buying individual bond for FI part of portfolio. Was wondering if anybody buying individual bonds and what criteria uses to do so?

I went to bond section of my CIBC IE account and searched by bonds that have investment grade rating (at least BBB) and highest yield.
2 first I found:
1. Ussuer: CAMECO CORP
Coupon: 4.19%
Maturity: Jun 24, 2024
Type: Bond Class: Mid Term Note
Credit Rating: BBB(high)
Payment Frequency: Semi-Annual
Instrument Currency: CAD
Yield: 3.87% Semi-Annual,
3.907% Annual
Face Value: $5,000.00
Price (Per 100): $101.9244
Accrued Interest: $18.37
Estimated Cost: $5,114.59
Settlement Date: Jul 26, 2017
and
2. Issuer: HUSKY ENERGY INC
Coupon: 3.6%
At Maturity: Mar 10, 2027
Type: Bond
Class: Corporate
CUSIP #: 448055AN3
Credit Rating: A(low)
Payment Frequency: Semi-Annual
Instrument Currency: CAD
Yield: 3.673% Semi-Annual,
3.707% Annual
Face Value: $5,000.00
Price (Per 100): $99.4092
Accrued Interest: $68.05
Exchange Rate: 1.0
Estimated Cost: $5,038.51
Settlement Date: Jul 26, 2017

I don't understand some numbers, for example , what is Accrued Interest or Coupon?
Generally which one of those 2 is better valued right now?
I understand that for Cameco bond , I gonna get semi-annual dividends = 5000 x 3.87% = $193.5 regardless of the bond price? Correct?
and because my Estimated Cost: $5,114.59 , the actual current yield is 193.5/5114.59 = 3.78%?

Now, what gonna be at Maturity: Jun 24, 2024? Bond will be automatically sold? At what price?

Can you recommend any articles/books/blogs to understand how to buy "correct" bond?

P.S. I was thinking about Prefs, but Mr. Hymas replied on my email that for registered accounts , better to invest into bonds than prefs.
Also, are there any "bonds letter" similar to Hymas's "prefletter" with recomendations?
"All animals are equal but some animals are more equal than others" George Orwell
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