So, apart from having temporarily come over all bucolic, why would anyone sell a corporate bond that is yielding over 10% and which matures in a couple of years? Certainly not fear: Halifax was acquired by the Lloyds Banking Group and this security has become less and less risky as Lloyds has stabilised.
Those at the back of the class paying attention may recall a previous post 'Yield? What Yield' - if so, full marks. Sometimes the current or income yield looks great but delve a little further and you might be tying up your money for a disappointing yield-to-maturity (or redemption yield).
This was one of the first corporate bonds I bought - and quite a stretch it was, as it is one of those that has a minimum trade of 10,000 units. But it has been great over the years, providing a regular income. I did pay a premium over par, so I was partially getting my own money back but the income yield has been consistently around 10%.
Although the coupon is a whopping 11%, the current price and the fact that the security matures in 2014 means that the yield-to-maturity is now only 5.75%. I can do better than that - for example, with the longer-dated Halifax 9.375 2021 corporate bond - yielding over 9% for both income and yield-to-maturity.
So, it was time to wield the blade and try something new.
I am not a financial advisor and the information provided does not constitute financial advice. You should always do your own research on top of what you learn here to ensure that it's right for your specific circumstances.