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Polvek Tybor
Imperial Chemical Industries
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Posted - 2008.02.18 23:58:00 -
[1]
Hi all
For those of you who've never heard of Imperial Chemical Industries [ICHEM] here is a quick background. ICHEM is a small moon mineral reaction company which currently runs two medium reactors supplying the industrialists of EVE with intermediate moon minerals. The business has been running for around 2 months and I issued the first tranche of public debt 5 weeks ago. Since then I have been preparing regular sets of public accounts every two weeks.
Since the last report our business and profitability has picked up significantly but it remains a struggle to keep the reactors operating at full capacity. Therefore I'd like to come to the market again with a further issuance of our medium term notes to raise 1.5 billion ISK. The cash will be invested in a freighter (1bn), insurance (300m) and working capital for the business (200m). The major limiting factor of ICHEM so far has been limited haulage ability. With the freighter I am confident that the business can maximise profits and gain the logistics capacity to expand into further reaction activity in the future.
Proposed Offering
The debt would be issued on the same terms as the existing bonds - in effect they will be identical notes.
Par value (Capital): 1,500 notes of 1m ISK each.
Coupon (Interest): 10% per month (paid at 5% every 2 weeks).
Maturity: Redeemable at par plus unpaid interest at ICHEMs discretion but no later than 4 months from the date of issue.
Registration: The notes will be bearer instruments. Interest and capital are repayable to the legal holder (per corp screen) on the coupon / redemption date.
ICHEM already has 500m of identical securities in issuance which have so far paid out 75m in interest (10% x 1.5 months).
Market Pricing
Here is the new bit that I hope some of you might appreciate. In the spirit of introducing some some content in our meta-game I'd like to gauge interest in a new way of using the market to price these bonds in a similar way to real life markets. That is I would like to issue them at a premium/discount based on the market demand. The goal is to allow the free market to price the cost of the bonds for ICHEM (and maybe similar issuances in the future).
Here is how it works in a nutshell. Any bond is known as a 'fixed income' investment. The obvious reason is because, barring default, the amount an investor receives is fixed. For the ICHEM bonds the company promises to pay you a sum total of 1.4m for every bond you hold (ie 1m principal and 0.4m of interest at 10%pm) per the terms above. However, the new bit is that I'd like to auction these bonds in the open market (MD) to find out what the 'real' interest rate I pay will be.
For instance. You think that 10%pm is a great return and ICHEM is a solid investment. You offer to buy the notes at a 0.1m premium (ie. you'll pay 1.1m for a bond with principal value of only 1m). The reason you'll do this is because you're getting 1.4m back through its life. If you offered the 1.1m for the notes you would get a 'real' interest rate (or yield to maturity) of 1.4/1.1 = 27% which is 7% per month. In this way you guys can determine what interest rate ICHEM pays and you receive.
Clearly this is a premium over par value. It works just the same way if you want to pay less than 1m per note (ie a discount) then the yield to maturity will be >10%. So the market can determine how much any bond returns based on the perceived risks and supply/demand.
Auction Process
If there is sufficient demand (and the interest rate is acceptable for ICHEM) I'd like to issue the notes this Sunday. To set the price I'd like to use this thread to conduct a special type of auction.
Cont. below
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Polvek Tybor
Imperial Chemical Industries
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Posted - 2008.02.18 23:58:00 -
[2]
Reserved
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Kazuo Ishiguro
House of Marbles
Zzz
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Posted - 2008.02.19 00:09:00 -
[3]
Edited by: Kazuo Ishiguro on 19/02/2008 00:11:01
Put me down for 500m please (for 500 shares).
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Polvek Tybor
Imperial Chemical Industries
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Posted - 2008.02.19 00:14:00 -
[4]
Edited by: Polvek Tybor on 19/02/2008 00:14:59
 Originally by: Kazuo Ishiguro
Put me down for 500m please.
Wow - that was quick! Thanks for the offer, it's much appreciated. But what price? 
One of the things it would be good to achieve with the proposed auction format is that it makes it less first-come first-served and more of a free market.
Or do you think it's a pain in the ass and I should just take your money and be grateful? 
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Lo Lightshard
LEG1ON
Coalition Of Empires
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Posted - 2008.02.19 00:19:00 -
[5]
I will commit to a 450M investment at 0.9M/bond.
[IMA6E REMOVED] |
Scipio Divinitus
Minmatar
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Posted - 2008.02.19 00:57:00 -
[6]
Ill take 200 shares at 1 million each.
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jna
Caldari
Black Ash Enterprises
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Posted - 2008.02.19 04:25:00 -
[7]
Originally by: Polvek Tybor
Or do you think it's a pain in the ass and I should just take your money and be grateful?
Pain in the ass
Especially as some weird bidders appear to be going up rather than down 
Put me down for 500m at 0.85m per (assuming we're going down from Lightshard's offer).
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Raskor
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Posted - 2008.02.19 04:29:00 -
[8]
I'll take 50 shares at 1.05m isk each. Eve mail me if I win, thanks.
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EBANK Ricdic
Eve-Tech Savings n Loans
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Posted - 2008.02.19 04:38:00 -
[9]
So is this a dutch auction?
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Ambo
2nd Outcasters
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Posted - 2008.02.19 09:01:00 -
[10]
Edited by: Ambo on 19/02/2008 09:03:44
Edited by: Ambo on 19/02/2008 09:03:10
I'm one of Polvek's current investors.
I've been very pleased with both the performance of my investment so far and communication.
Polvek, I can't tell you how glad I am that you've decided to run this as an auction, if you just released more bonds and asked for cash I'd be very worried about the parrallels with Reithe. (i.e. offering good returns, paying out for one month then going for more cash) By doing it like this, you are making pretty sure that you won't recieve more that 1.5 bil isk which inspires confidence.
Consequently, I'd like to offer 0.95 mil each for 550 bonds.
--------------------------------------
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Kazuo Ishiguro
House of Marbles
Zzz
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Posted - 2008.02.19 09:27:00 -
[11]
Ok, the whole supply of shares is now accounted for. Do we continue bidding until Sunday, or are you going to sell the whole lot (Ambo gets 300 and everyone else gets what they asked for) at 0.9m, the least bid that is currently going to be supplied?
I'd be happier if you just wrote down a set price and stuck with that. Also, there's no risk to you of being saddled with a 22% dividend...
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FastLearner
Fury Holdings
Brutally Clever Empire
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Posted - 2008.02.19 09:36:00 -
[12]
I think some people have missed the whole point of what the OP is doing - i.e. those bidding less than 1m per share. He's not trying to give away bonds as cheaply as possible, he's trying to raise as much ISK as he can.
There's one HUGE point which needs to be clarified for this to work. The OP says that the bonds will be repaid "no later than 4 months from the date of issue". That's NOT the same as the bonds having a fixed life of 4 months. As it stands someone who offered 1.1m per bond could find themself being bought out for 1.05m per bond after 2 weeks. Unless the life of the bonds has a cast-iron minimum (rather than maximum) set there's no way anyone should be bidding over the bare minimum.
I agree with the principal of auctioning off bonds - it reduces the cost of capital and it gives everyone a chance to obtain bonds, rather than just whoever posts first. But please define the life of the bond properly so that people actually know what they're bidding for.
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jna
Caldari
Black Ash Enterprises
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Posted - 2008.02.19 12:48:00 -
[13]
Originally by: FastLearner
I think some people have missed the whole point of what the OP is doing - i.e. those bidding less than 1m per share. He's not trying to give away bonds as cheaply as possible, he's trying to raise as much ISK as he can.
But if that's the case, then I've totally misunderstood this sentence, which seemed very clear to me:
That is, every investor who reserves bonds will all pay the price of the lowest successful applicant. As follows:
Investor 1 commits to take 500m @ 1.20m
Investor 2 commits to take 500m @ 1.15m
Investor 3 commits to take 500m @ 1.10m
Investor 4 commits to take 500m @ 1.05m
In this example Investor 3 is the lowest successful bid (since Investors 1-3 have filled the supply). Therefore despite bidding at a higher rate all of Investors 1-3 actually only have to pay 1.10m per bond.
-------------------------------------------------
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Ahn Riane
Blue Star Surveying and Mapping
Zzz
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Posted - 2008.02.19 12:52:00 -
[14]
Edited by: Ahn Riane on 19/02/2008 12:53:04
Originally by: FastLearner
I think some people have missed the whole point of what the OP is doing - i.e. those bidding less than 1m per share.
He's not trying to give away bonds as cheaply as possible, he's trying to raise as much ISK as he can.
Actualy, he is trying to get exactly 1.5b ISK, and he wants to minimise the interest he has to pay for it.
Originally by: FastLearner
There's one HUGE point which needs to be clarified for this to work. The OP says that the bonds will be repaid "no later than 4 months from the date of issue". That's NOT the same as the bonds having a fixed life of 4 months. As it stands someone who offered 1.1m per bond could find themself being bought out for 1.05m per bond after 2 weeks. Unless the life of the bonds has a cast-iron minimum (rather than maximum) set there's no way anyone should be bidding over the bare minimum.
I agree here.
I guess a fixed return of 1.4m on a bond worth nominal 1m is meant by the OP.
Should this be true, I offer 1.05m per bond for 100 bonds.
Total 105m Isk for 100 bonds.
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FastLearner
Fury Holdings
Brutally Clever Empire
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Posted - 2008.02.19 14:21:00 -
[15]
Originally by: Ahn Riane
Edited by: Ahn Riane on 19/02/2008 12:53:04
Originally by: FastLearner
I think some people have missed the whole point of what the OP is doing - i.e. those bidding less than 1m per share.
He's not trying to give away bonds as cheaply as possible, he's trying to raise as much ISK as he can.
Actualy, he is trying to get exactly 1.5b ISK, and he wants to minimise the interest he has to pay for it.
I'm not convinced that's the case. I read it as he's going to sell exactly 1500 bonds whatever price they sell for. Look at his (confusing) example in the second post - the first 3 bidders have committed 1.5 billion but the fourth one still gets to count. I say confusing - as in his example some people appear to be buying partial bonds (500m doesn't buy an exact number of bonds at the listed bids). Bids should be of the format "X bonds at Y each" - makes it easier to work out the status and prevents bids which would amount to fractional bonds.
It looks like it was done in a rush - as there's pretty silly errors like that in it. But the principle of auctioning off bonds/shares is a sound one - and is likely the route I'd follow if Fury Bank needed to raise ISK pretty quickly (e.g. to finance a loan).
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Polvek Tybor
Imperial Chemical Industries
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Posted - 2008.02.19 21:51:00 -
[16]
Hi all
Sorry if there was some confusion. Let me try to set the record straight.
The sum total of bonds for sale is 1.5bn. Those 1.5bn of bonds will go to the highest bidders. However, all of those successful bidders pay the same price - the lowest winning bid. That way every single investor who is above the cut-off point pays less than or equal to what they were willing to pay.
In my example:
Investor 1 commits to take 500m @ 1.20m
Investor 2 commits to take 500m @ 1.15m
Investor 3 commits to take 500m @ 1.10m
Investor 4 commits to take 500m @ 1.05m
I should be clear that investors 1-3 are winners. They each get 500m of bonds to come to the total of 1.5bn. Investor 4 is unsuccessful and does not get any bonds (and doesn't pay either of course). However, despite bidding above the highest winning bid (1.10m) investors 1 and 2 still only pay 1.10m.
Originally by: FastLearner
There's one HUGE point which needs to be clarified for this to work. The OP says that the bonds will be repaid "no later than 4 months from the date of issue". That's NOT the same as the bonds having a fixed life of 4 months. As it stands someone who offered 1.1m per bond could find themself being bought out for 1.05m per bond after 2 weeks. Unless the life of the bonds has a cast-iron minimum (rather than maximum) set there's no way anyone should be bidding over the bare minimum.
You're absolutely right Fastlearner. The bonds can be early redeemed, however, the redemption terms per above are:
Maturity: Redeemable at par plus unpaid interest at ICHEMs discretion but no later than 4 months from the date of issue.
Therefore, if ICHEM chooses to redeem early then you will still get the full 1.4m per bond. Clearly this is not so good for ICHEM so I'm pretty unlikely to redeem early.
Originally by: Kazuo Ishiguro
Ok, the whole supply of shares is now accounted for. Do we continue bidding until Sunday, or are you going to sell the whole lot (Ambo gets 300 and everyone else gets what they asked for) at 0.9m, the least bid that is currently going to be supplied?
I'd be happier if you just wrote down a set price and stuck with that. Also, there's no risk to you of being saddled with a 22% dividend...
I would really like as many investors as possible to keep bidding for bonds. At the close of the auction on Sunday the top 1.5bn of bids will 'win' and will get the bonds at a price set by the lowest winning bid. Everybody else had the option of upping their bid prior to Sunday but obviously wasn't willing to accept as low an interest rate as the winners.
I hope that using this system ICHEM pays the lowest rate the market will bear, it's not a first come first served system and ICHEM allows a free market mechanism decide the price of the debt (hopefully lower ).
Originally by: EBANK Ricdic
So is this a dutch auction?
I think a true Dutch auction is done with private sealed bids. This is similar I think but more transparent.
Anyway, if something else is unclear then please let me know. Many thanks to those who are willing to invest so far. Although jna you're asking for a monthly return of 16% with your bid of 0.85m - you should put a yaaarrr on the end of that 
Cheers
Polvek
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Ahn Riane
Blue Star Surveying and Mapping
Zzz
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Posted - 2008.02.19 22:30:00 -
[17]
Edited by: Ahn Riane on 19/02/2008 22:36:25
Confirming offer: 105m for 100 bonds.
I would like to see the some more points clarified.
1- When will this auction end exactly, and are there any requirements to be met by then?
2- do you have any kind of reserve? eg, what if the bids at the end of auction dont met what you consider to be a fair deal?
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Shadarle
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Posted - 2008.02.19 22:40:00 -
[18]
I really like this method of doing a share offering, I may consider something similar, though I'd do it in blocks of votes. Allowing people to bid on odd amounts makes this over-complicated. Much better to force people to bid in increments of 100 or some such (if you do have this restriction then I must have missed it).
Anyhow, I hope this goes well... I would bid but I honestly want a place to put a lot more than this can accommodate. Good luck with it.
Stacking Penalty / Resists Explained |
Polvek Tybor
Imperial Chemical Industries
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Posted - 2008.02.20 00:04:00 -
[19]
Originally by: Ahn Riane
I would like to see the some more points clarified.
1- When will this auction end exactly, and are there any requirements to be met by then?
2- do you have any kind of reserve? eg, what if the bids at the end of auction dont met what you consider to be a fair deal?
1. How about we set the end of the auction at 1200 EVE time on Sunday. Bids not in this thread before then don't stand. I didn't think people would really want to snipe but you're right that there should be a formal end.
2. In my first post I did say that if there was simply insufficient demand that the interest rate would be too high then I wouldn't be able to go ahead. However, I clearly want the money for a good purpose so it would have to be pretty darn high for me not to accept. I'd be wary of setting a formal public reserve as it might distort the market if there is a known cap level.
In case anyone is wondering what the score is currently. By my reckoning if the auction ended now (and I emphasise it doesn't until 1200 Sunday) then this would be the result:
Winning Bids
1. Ahn Riane 100 bonds @ 1.05m each
1. Raskor 50 bonds @ 1.05m each
3. Scipio Divinitus 200 bonds @ 1.00m each
3. Kazuo Ishiguro 500 bonds @ 1.00m each
5. Ambo 550 bonds @ 0.95m each
6. Lo Lightshard 100 (out of 450 requested) @ 0.90m each
This would result in all the above receiving their requested amount (apart from Lo who gets the final 100m bonds) and all paying 0.9m for each bond. That results in a yield to maturity for the bonds of 14% per month which would accrue to each investor above. If this were the end of the auction I would indeed accept this rate and issue the bonds gratefully (if slightly grudgingly).
To make it also clear this is paid as an interest payment of 10% per month (5% every two weeks) and a lump sum of 1m each bond at maturity.
Thanks guys/girls - it's much appreciated. Now if a few of you could just bid a bit more for the bonds so I'm not paying 14% per month that would be great!
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Kazuo Ishiguro
House of Marbles
Zzz
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Posted - 2008.02.20 01:15:00 -
[20]
I'll be watching closely, but this auction is rather sensitive to bid increases. Going up to 1.05m per bond reduces the return to less than 5% per month, and I won't be interested if I have to pay a price equivalent to less than 7% return per month, as that's matched by reasonably safe investments elsewhere.
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Treelox
Amarr
Market Jihadist Revolutionary Party
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Posted - 2008.02.20 01:26:00 -
[21]
Edited by: Treelox on 20/02/2008 01:31:15
Edited by: Treelox on 20/02/2008 01:28:47
650 @ 0.97mil
p.s insuring a high sec freighter makes me cry for wasted isk
--edit
added insurance line
---edit #2
realised that my bid needed to be fixed to wishes of OP to only using the 10k place
--
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Ahn Riane
Blue Star Surveying and Mapping
Zzz
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Posted - 2008.02.20 01:36:00 -
[22]
Originally by: Kazuo Ishiguro
I'll be watching closely, but this auction is rather sensitive to bid increases. Going up to 1.05m per bond reduces the return to less than 5% per month, and I won't be interested if I have to pay a price equivalent to less than 7% return per month, as that's matched by reasonably safe investments elsewhere.
wrong math 
its more than 8%.
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Roguehalo
Caldari
RH Ship Brokers
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Posted - 2008.02.20 03:47:00 -
[23]
100 @ 1m please
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Roguehalo
Caldari
RH Ship Brokers
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Posted - 2008.02.20 08:09:00 -
[24]
Originally by: Ahn Riane
Originally by: Kazuo Ishiguro
I'll be watching closely, but this auction is rather sensitive to bid increases. Going up to 1.05m per bond reduces the return to less than 5% per month, and I won't be interested if I have to pay a price equivalent to less than 7% return per month, as that's matched by reasonably safe investments elsewhere.
wrong math
its more than 8%.
Actually you are both wrong
The correct figures are 1.05 = 9.52%
1.10 = 9.09%
1.20 = 8.33%
These figures really ought to stimulate bidding a bit!!
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Ambo
2nd Outcasters
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Posted - 2008.02.20 08:29:00 -
[25]
Just to clarify another point: From your example, I take it you are selling a fixed amount of 1500 bonds at whatever the final price is rather than however many bonds you need at the final price to raise exactly 1.5 bil.
Also, since I've been pushed off the bottom of the bidding, I'll go to 1.01 mil for 550 bonds.
--------------------------------------
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Treelox
Amarr
Market Jihadist Revolutionary Party
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Posted - 2008.02.20 08:37:00 -
[26]
Edited by: Treelox on 20/02/2008 08:37:41
650 @ 1.01mil
--
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Treelox
Amarr
Market Jihadist Revolutionary Party
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Posted - 2008.02.20 08:41:00 -
[27]
Polvek Tybor, you can thank me later, since my above bid took all shares over the 1.00mil mark. Your now into extra iskies :P
--
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Kazuo Ishiguro
House of Marbles
Zzz
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Posted - 2008.02.20 09:06:00 -
[28]
Well, since this auction seems to have got going, it'd be useful to know the exact finish time, and whether or not there's going to be a sniper rule.
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Roguehalo
Caldari
RH Ship Brokers
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Posted - 2008.02.20 09:16:00 -
[29]
Originally by: Kazuo Ishiguro
Well, since this auction seems to have got going, it'd be useful to know the exact finish time, and whether or not there's going to be a sniper rule.
This is a quote from an earlier post that the op made :-
"1. How about we set the end of the auction at 1200 EVE time on Sunday. Bids not in this thread before then don't stand. I didn't think people would really want to snipe but you're right that there should be a formal end."
Seems clear enough
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Kazuo Ishiguro
House of Marbles
Zzz
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Posted - 2008.02.20 09:20:00 -
[30]
Sorry, missed that.
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Zelseus
Minmatar
The Independant Jack
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Posted - 2008.02.20 10:29:00 -
[31]
100 @ 1.15m
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Xulton
Gallente
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Posted - 2008.02.20 13:17:00 -
[32]
200 @ 1.10M isk each
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jna
Caldari
Black Ash Enterprises
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Posted - 2008.02.20 14:08:00 -
[33]
Now that I think I've got the hang of it  , put me down for 500m at 1.1
-------------------------------------------------
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Ahn Riane
Blue Star Surveying and Mapping
Zzz
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Posted - 2008.02.20 14:54:00 -
[34]
Edited by: Ahn Riane on 20/02/2008 14:55:29
Originally by: Roguehalo
Edited by: Roguehalo on 20/02/2008 08:18:52
Originally by: Ahn Riane
Originally by: Kazuo Ishiguro
I'll be watching closely, but this auction is rather sensitive to bid increases. Going up to 1.05m per bond reduces the return to less than 5% per month, and I won't be interested if I have to pay a price equivalent to less than 7% return per month, as that's matched by reasonably safe investments elsewhere.
wrong math
its more than 8%.
Actually you are both wrong
The correct figures are :-
1.05 = 9.52%
1.10 = 9.09%
1.20 = 8.33%
These figures really ought to stimulate bidding a bit!!
This is harder to understand than rocket sience!
If I pay 1.05m ISK for one bond and receive 1.4m ISK after 4 month, thats 0.35m Isk profit. 0.35/1.05 = 33.333%.
33% /4 = 8.3333%.
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Ambo
2nd Outcasters
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Posted - 2008.02.20 16:24:00 -
[35]
Edited by: Ambo on 20/02/2008 16:25:33
You actually recieve 50,000 ISK per share each 2 weeks.
If you buy for 1.05mil, that works out roughly as a return per month of 1,050,000 / 100,000 = 9.52%
Edited for lack of decimal places...
--------------------------------------
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FastLearner
Fury Holdings
Brutally Clever Empire
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Posted - 2008.02.20 19:29:00 -
[36]
Edited by: FastLearner on 20/02/2008 19:32:21
Not sure which of you is correct.
OP says "Coupon (Interest): 10% per month (paid at 5% every 2 weeks)."
Which is ambiguous - as it could be 5% per 2 weeks or it could be 10% per month.
What % you get as a return is obviously significantly different depending on which you believe is the case. 5% per 2 weeks is about 10.89% per month (assuming an average month length of 30.5 days).
EDIT: Ambo - your calculation is sort of wrong. Although you're technically correct about the return per month, you're not factoring in that you lose 50m after 4 months when the bond closes.
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Shadarle
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Posted - 2008.02.20 19:57:00 -
[37]
Well there are two issues now that I read through everything.
First, will this definitely run for 4 months? If it runs for less then it significantly reduces the monthly ROI if you pay over 1 mil per. So it seems this should have a set length of 4 months, not a variable length with a max of 4 months. Otherwise people could wind up paying 1.1 mil per and you pay back the bonds at 1.05 mil after half a month for example. Thus you've earned .05 mil per bond and the investor has lost that much.
Second, to all the people doing calculations. The question of 5% bi-weekly or 10% monthly is meaningless. In the end it will pay back at best 1.4 mil per bond in 4 months. So all calcs should be based off of this (assuming it is guaranteed to last 4 months). So if you pay 1.1 mil per you are getting 1.4-1.1 =.3 mil per in 4 months. If you pay 1 mil you get .4 mil per in 4 months.
Stacking Penalty / Resists Explained |
Roguehalo
Caldari
RH Ship Brokers
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Posted - 2008.02.20 20:55:00 -
[38]
Originally by: Roguehalo
Edited by: Roguehalo on 20/02/2008 08:18:52
Originally by: Ahn Riane
Originally by: Kazuo Ishiguro
I'll be watching closely, but this auction is rather sensitive to bid increases. Going up to 1.05m per bond reduces the return to less than 5% per month, and I won't be interested if I have to pay a price equivalent to less than 7% return per month, as that's matched by reasonably safe investments elsewhere.
wrong math
its more than 8%.
Actually you are both wrong
The correct figures are :-
1.05 = 9.52%
1.10 = 9.09%
1.20 = 8.33%
These figures really ought to stimulate bidding a bit!!
My figures are incorrect. Apologies to anybody who based their bidding decision on them
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Polvek Tybor
Imperial Chemical Industries
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Posted - 2008.02.20 22:24:00 -
[39]
Originally by: Shadarle
Well there are two issues now that I read through everything.
First, will this definitely run for 4 months? If it runs for less then it significantly reduces the monthly ROI if you pay over 1 mil per. So it seems this should have a set length of 4 months, not a variable length with a max of 4 months. Otherwise people could wind up paying 1.1 mil per and you pay back the bonds at 1.05 mil after half a month for example. Thus you've earned .05 mil per bond and the investor has lost that much.
If the bond redeems early it will pay 1m per bond (the par value) plus any unpaid interest. What I'm trying to get across (maybe not so well) is that anyone who buys a bond will get 1.4m each. If ICHEM pays it back early you still get 1.4m - just quicker. It's pretty unlikely I would early redeem of course but wanted to have the option.
Originally by: Shadarle
Second, to all the people doing calculations. The question of 5% bi-weekly or 10% monthly is meaningless. In the end it will pay back at best 1.4 mil per bond in 4 months. So all calcs should be based off of this (assuming it is guaranteed to last 4 months). So if you pay 1.1 mil per you are getting 1.4-1.1 =.3 mil per in 4 months. If you pay 1 mil you get .4 mil per in 4 months.
The interest on the bond is 10% per month. This is paid in ISK in installments twice per month. But you're also right that the total return on the bond includes any discount/premium paid upfront.
The way I would work this out is simply how much you get back over how much you invested. So if you pay 1.10m per bond:
1.4m (total return paid) / 1.1m (invested) = 27% total return.
I divide that by the 4 month life and you get 7% per month.
Thanks to everyone for bidding so far. It's appreciate the support and I'm glad that this experiment in market pricing seems to be working out relatively well.
If anyone is unclear what's going on please ask!
Cheers
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Polvek Tybor
Imperial Chemical Industries
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Posted - 2008.02.20 23:11:00 -
[40]
Edited by: Polvek Tybor on 20/02/2008 23:13:07
Quick update then. Per my counting the following are the currently winning bids:
1. Zelseus 100 bonds @ 1.15m each
2. Xulton 200 bonds @ 1.10m each
4. Ahn Riane 100 bonds @ 1.05m each
4. Raskor 50 bonds @ 1.05m each
5. Roguehalo 100 bonds @ 1.02m each
7. Ambo 475 bonds (out of 550 bid) @ 1.01m each
7. Treelox 475 bonds (out of 650 bid) @ 1.01m each [Thanks BTW!]
The settlement price would be 1.01m each (the lowest winning bid) which all the winners will pay and equates to a return of:
1.4m / 1.01 = 38.6%
38.6 / 4 = 9.65% per month
As you can see, since Ambo and Treelox both bid the same price I've allocated the remaining bonds equally.
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Roguehalo
Caldari
RH Ship Brokers
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Posted - 2008.02.20 23:22:00 -
[41]
Edited by: Roguehalo on 20/02/2008 23:22:39
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Treelox
Amarr
Market Jihadist Revolutionary Party
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Posted - 2008.02.21 00:09:00 -
[42]
Edited by: Treelox on 21/02/2008 00:09:54
550 @ 1.03
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Raskor
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Posted - 2008.02.21 03:42:00 -
[43]
Originally by: Polvek Tybor
Quick update then. Per my counting the following are the currently winning bids:
5. Ahn Riane 100 bonds @ 1.05m each
5. Raskor 50 bonds @ 1.05m each
The settlement price would be 1.01m each (the lowest winning bid) which all the winners will pay and equates to a return of:
Not to quibble, but my bid was in well before Ahn's so why is her bid listed before mine?
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Polvek Tybor
Imperial Chemical Industries
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Posted - 2008.02.21 07:45:00 -
[44]
Originally by: Raskor
Not to quibble, but my bid was in well before Ahn's so why is her bid listed before mine?
You're listed joint fifth - the actual order is just random though.
In case of a tie I intend to allocate remaining bonds equally among those tieing (per Ambo and Treelox). This seemed fair and in the spirit of the auction. It doesn't matter how many bonds you want or when you bid (as long as it's before 1200 Sunday) - the only determinant is price. But if you guys think that's not fair then we can discuss.
Thanks for the bid by the way.
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Banni Vinda
The Ninja Coalition
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Posted - 2008.02.21 13:03:00 -
[45]
Might I suggest that if you wish to split orders that are equally matched in price, you do it weighted by each order volume. Otherwise I could match Treelox's latest bid (550 @ 1.03) with my own (1 @ 1.03), and we would both get a 50% split of shares in that price bracket. It would be better if it were split like:
Treelox: 550 / (550 + 1) * num_shares_to_split
Me: 1 / (550 + 1) * num_shares_to_split
Make sense?
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Polvek Tybor
Imperial Chemical Industries
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Posted - 2008.02.21 14:25:00 -
[46]
Originally by: Banni Vinda
Might I suggest that if you wish to split orders that are equally matched in price, you do it weighted by each order volume.
It does seem unfair to punish the higher volume bid disproportionately to a lower volume bid at the same price.
If the tie situation arises I would intend to weight by volume as you suggest. Would anyone have a problem with that?
Sorry to be setting the rules mid-auction. At least this debate might establish some accepted 'rules' for similar auctions in the future.
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Manalapan
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Posted - 2008.02.22 08:28:00 -
[47]
I would like to offer 100M @ 1.0M
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Killer2
Amarr
The Arrow Project
Morsus Mihi
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Posted - 2008.02.22 08:52:00 -
[48]
500 @ 1.10
Please advise via evemail if I'm successful. |
Polvek Tybor
Imperial Chemical Industries
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Posted - 2008.02.22 19:59:00 -
[49]
Current status:
1. Zelseus 100 @ 1.15m
4. Xulton 200 @ 1.10m
4. Jna 500 @ 1.10m
4. Killer2 500 @ 1.10m
6. Raskor 50 @ 1.05m
6. Ahn 100 @ 1.05m
7. Treelox 50 (out of 550 bid) @ 1.03m
This would result in a settlement price of 1.03m, payable by all the bidders above, and result in a yield to maturity of 9% per month.
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Kazuo Ishiguro
House of Marbles
Zzz
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Posted - 2008.02.23 13:00:00 -
[50]
1000 @ 1.11m.
My research services
Spreadsheets: Top speed calculation - Halo Implant stats |
Raskor
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Posted - 2008.02.24 06:41:00 -
[51]
Increasing my bid to 50 @ 1.11m per
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Xulton
Gallente
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Posted - 2008.02.24 07:23:00 -
[52]
increasing my bid to 250 @ 1.15mil
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Ahn Riane
Blue Star Surveying and Mapping
Zzz
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Posted - 2008.02.24 07:46:00 -
[53]
Edited by: Ahn Riane on 24/02/2008 07:46:59
Change my bid to 100 @ 1.11m Isk
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Polvek Tybor
Imperial Chemical Industries
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Posted - 2008.02.24 15:35:00 -
[54]
The deadline has now passed which means the auction is officially over. By my reckoning the following are the winning bids:
2. Zelseus 100 @ 1.15m
2. Xulton 250 @ 1.15m
4. Ahn 100 @ 1.11m
4. Raskor 50 @ 1.11m
7. Kazuo 286 (of 400 bid) @ 1.10m
7. jna 357 (of 500 bid) @ 1.10m
7. Killer2 357 (of 500 bid) @ 1.10m
The final settlement price is 1.10m per bond equating to a yield to maturity of 6.82% per month.
If the winning bidders could transfer the following amounts of ISK to Polvek at their first convenience then I will send you the bond note.
Zelseus 100 @ 1.10m = 110m ISK
Xulton 250 @ 1.10m = 275m ISK
Ahn 100 @ 1.10m = 110m ISK
Raskor 50 @ 1.10m = 55m ISK
Kazuo 286 (of 400 bid) @ 1.10m = 314.6m ISK
jna 357 (of 500 bid) @ 1.10m = 392.7m ISK
Killer2 357 (of 500 bid) @ 1.10m = 392.7m ISK
Many thanks for the support. I'll do my utmost to deliver on ICHEM's promises. Updated financial statements for the last 2 weeks are being prepared and will be posted later.
Regards
Polvek
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Treelox
Amarr
Market Jihadist Revolutionary Party
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Posted - 2008.02.24 15:46:00 -
[55]
If one of the above listed 7 does not pay in a timely fashion, and those that atm are only getting their partial bid upon quantity, get theirs filled to their full asking lot.
Would this mean that I get any leftovers, at 1.03m ea?
Would this then also mean that you would have to refund the difference of 0.07m, to everyone else who had paid 1.10m?
Just checking if I should keep checking the thread.
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Polvek Tybor
Imperial Chemical Industries
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Posted - 2008.02.24 19:48:00 -
[56]
If some of the winners renege on their bids then I propose that the following actions be be taken:
1. Offer the untaken bonds to existing winners at the settlement price.
2. Offer them to unsuccessful bidders at the settlement price - first come first served.
3. If it's not too many then just don't issue those bonds at all.
4. Offer them to unsuccessful bidders at a lower price (and refund everyone else the difference).
I hope this sounds reasonable. In this case the issue is over-subscribed by 400m bonds so it hopefully won't arise.
Thanks for the bids Treelox. I hate to turn your money down (temporarily) but it's important for me to build the business (and investor trust) gradually. Hopefully I'll have room to expand and issues further bonds in due course and I'd be glad to take your cash.
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