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標題: worthwhile to buy isf debenture? [打印本頁]

作者: musicien 時間: 12-4-3 20:26 標題: worthwhile to buy isf debenture?

Heard that it's gone to 5 m! Is it worthwhile?

作者: cecilau 時間: 12-4-3 21:44

It's too expensive now.

作者: FattyDaddy 時間: 12-4-4 14:31

You can get your money back when your child finishes school and you sell the debenture, often at a higher price. The only question is whether you can raise the money and can afford to have the money tied up for a few years.

作者: Hedgies 時間: 12-4-5 15:11

Whether it is worthwhile to buy one at 5mm is a subject call... but looking at the increasing number of HK parents wanting to put their kids into IS / private IB school (plus the large number of new-borns in the year of dragon), I would think the price of debentures in general would rise.. Unfortunately, ISF is the only school debentures which have liquidity in the secondary market, hence parents may not have a lot of choices..

作者: ethanjoyce 時間: 12-5-3 10:35

Can anyone comment on the choice of General Capital Levy and Capital Note? General Capatial Levy is only HK$200,000 and is one-off re-fundable after leaving school, so what's the benefits of choosing Capital Note instead which is so expensive?

作者: Hedgies 時間: 12-5-3 10:42

The benefits of a Capital Note is: (i) you will have 3 interview opportunties (including an early assessment opportunity) vs. 1 interview opportunity for kids not covered by a Capital Note and (ii) if your kid passes the interview, kids covered by Cap Notes have the highest priority of getting in among all the applicants.

作者: ethanjoyce 時間: 12-5-3 14:16

Thanks. Is it very competitive to get in ISF FY? Any idea on the acceptance ratio?

作者: mugtaitai 時間: 12-5-3 14:36

Plus you can sell the Capital Note in secondary market and make a profit when the child leaves school (you will have to split the profit with the school though). General Capital Levy is essentially a non interest bearing lending to the school. You get the full amount back when the child leaves school and that's is it.

作者: ethanjoyce 時間: 12-5-3 15:15

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Thank you!

作者: pigpigfamily 時間: 13-2-26 23:17

Does anyone know where I can buy the Capital Note?

作者: Shrimpiggy 時間: 13-2-26 23:59 標題: 回覆：pigpigfamily 的帖子

Hk has many wealthy people!

作者: saikungmom 時間: 13-2-27 08:05 標題: 回覆：pigpigfamily 的帖子

call the club membership companies, like those who sell Aberdeen Marina Club or American Club memberships.

作者: saikungmom 時間: 13-2-27 08:07 標題: 引用：Hk+has+many+wealthy+people! +

原帖由 Shrimpiggy 於 13-02-26 發表
Hk has many wealthy people!

Cannot agree more

作者: judymama 時間: 13-3-5 17:21 標題: 回覆：worthwhile to buy isf debenture

作者: jeff76916 時間: 13-3-5 21:09

Far too expensive beyond the reach of ordinary families.

作者: Shrimpiggy 時間: 13-3-5 22:45 標題: 回覆：Hedgies 的帖子

Do you know how many debentures ISF sold? It is a very good to have 500mio funding from 100 holders...though the original values were only 1-3mio. If there is 200 debentures, there are 1billion capital for investment, the school is the biggest winner regardless the value of debenture when u cash out 13yrs later.
I think the government need to regulate the debenture otherwise there might be another Leman mini bond.......

作者: HKTHK 時間: 13-3-6 00:49

回復 Shrimpiggy 的帖子

It is of course nice to have 500 mil in funding but the debenture started at like 250k, not 1 mil to 3mil

作者: Shrimpiggy 時間: 13-3-6 08:55 標題: 回覆：HKTHK 的帖子

Yes, but who knows who trade it in the secondary market? Potential parents, the school, the board members of the school and might welcome money laundry ? For HKIS, CDNIS etc, at least I know I buy it directly from the school and all these transaction must be booked as non profit making Organizations required.

作者: pppwong 時間: 13-3-6 09:05 標題: 引用：call+the+club+membership+companies,+like

原帖由 saikungmom 於 13-02-27 發表
call the club membership companies, like those who sell Aberdeen Marina Club or American Club member ...

Sorry I'm new to this game. Do you mind explaining just a bit more? Did you mean that the capital notes cannot be bought from the school directly, and that we have to somehow find it from the secondary market? Thankyou!

作者: Shrimpiggy 時間: 13-3-6 10:03 標題: 回覆：pppwong 的帖子

I think u still can buy from school, but the queue is so long that no one can answer you....as it is selling at the listed price. But only ISF you can trade in secondary market that if you can offer a REASONABLE price, someone in the marketing might sell it to you.

作者: HKTHK 時間: 13-3-6 11:19

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I don't think I understand what you are trying to say.  Regulations are needed because there is money laundering? Or are you insinuating that there are some wrong-doings by the board?  And how would you distinguish this from a pure debt instrument issued by a company?

This is what I do know.  The school issues the debentures in batches though I don't think there is any batches being sold now.  The price of the various batches has been increasing with the latest at HK$4.5 mil.  There was a wait list to buy the debentures and you can get on the list by contacting the school.  I am not sure if there is another batch in the plan since many of the capital projects are funded already.
There are also secondary trading in the market.  For those, you have to find your own seller or ask the school to help.  All secondary trading have to go through the school since all transfer require their approval and there is also a gain sharing mechanism.  I have heard the price gone up to as much as HK$6mil but it is pure hearsay.

作者: Shrimpiggy 時間: 13-3-6 11:44 標題: 回覆：HKTHK 的帖子

Hi HKTHK,
So far, no one knows how many debenture in the market and how many more it is going to issue. As you mentioned the secondary market transfer must go through the school and any price difference need to split with the school. As a result, the school taking the profit on the secondary market and controlling the number and price of new issues.
I am not a debenture holder but I doubt even the holders know how many debenture are sold and will be sold.

作者: caa 時間: 13-3-6 11:51

Shrimpiggy 發表於 13-3-6 08:55
Yes, but who knows who trade it in the secondary market? Potential parents, the school, the board me .

ISF is registered as a tax-exempt organisation and so must be non-profit making to qualify as such. so why do you think ISF is different from HKIS, CDNIS etc.?

作者: Shrimpiggy 時間: 13-3-6 12:15 標題: 回覆：caa 的帖子

Yes, as it must be a non profit making school, it is better to make their book more transparent to parents, debenture holders and potential parents.
I am here not to indict the school any wrongdoing but they can do more to let debenture stakeholders understand more.
For CDNIS, HKIS, the debenture can only purchase directly from the school, and in fact, there is not new issues for the last decades and there is a fixed price when u subscribe it.

作者: caa 時間: 13-3-6 12:23

This is not a bank, and the debentures are not for investment as bond sold by banks.

作者: Shrimpiggy 時間: 13-3-6 12:34 標題: 回覆：caa 的帖子

Yes, but the school is a non profit making organization, it must be more transparent than the banks should be. Otherwise, it is so risky to buy it as school has not much asset to liquidate for your money back if anything goes wrong.

作者: caa 時間: 13-3-6 12:39

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Does any other non-profit making school open their entire accounts to parents, potential or existing, or public?

作者: Shrimpiggy 時間: 13-3-6 13:30 標題: 回覆：caa 的帖子

ESF provides a very comprehensive annual report and CDNIS has also published its annual report with financial data you can check it on this website.
GSiS got yearbooks open to parents and alumni only and their debenture is one of the lowest among all top tier IS in HK, $375k only, but you can buy it when the school offer you a place. It puts ability before commercial....
I think all other IS should follow.

作者: NoahArk 時間: 13-3-6 15:12

ISF's capital note is nothing. Kellet School's corporate notes are trading at $10,000,000 to $10,500,000 (yes, around 10 million). HKIS's are not as high but not too far behind. There is simply too much money in the market.

作者: NoahArk 時間: 13-3-6 15:18

Yes, schools' debentures can be good investment. The guy in the room next to me purchased CIS's corporate note at $600k and ISF's capital note at $150k. That means 1000% and 3000% increase in price respectively in less than 10 years. Citigroup (my former employer) is still holding over 40 HKIS's corporate nomination rights, which it purchased many years ago for less than $400k each. And now they are worth... Crazy!

作者: NoahArk 時間: 13-3-6 15:20

Don't know about other schools. But ISF needs over $240,000,000 to build the new block. Chances are that they need to issue a few more capital notes to raise the money.

作者: HKTHK 時間: 13-3-6 17:29

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I am still not sure what all the fuss is about.  It does seem to me that you don't understand how these debentures work, why they exist and what has happened in the past.
Let me first respond to your various comments:

- "As you mentioned the secondary market transfer must go through the school and any price difference need to split with the school. As a result, the school taking the profit on the secondary market and controlling the number and price of new issues."

This gain sharing is a new mechanism in recent debentures to make sure that schools benefit from part of the appreciation too as opposed to allowing all of it to be accrued to the debenture holder.  In the old days, debentures issued by HKIS and CIS do not carry gain sharing mechanisms and both of those were recalled at par.  I believe, though not 100% sure, HKIS recalled them at a low value and then issued new ones with gain sharing at higher values.  This gain sharing mechanism can protect the debenture holder to a certain extent as well since technically they are all callable at par at any time.  This also benefits the school by providing them with part of the appreciation.  For ISF debentures, prices have gone up substantially in recent years.  As a current parent, I think it is great that they can issue less debentures and receive more money to fund their capital plan (i.e. new buildings and facilities of the school).

- "it is better to make their book more transparent to parents, debenture holders and potential parents"

It would be nice to have but aside from CDNIS, whose annual report carries next to no financial info, and ESF, what other schools in HK disclose their books?  Even for those who issue debentures, CIS and HKIS do not disclose theirs either.

- "For CDNIS, HKIS, the debenture can only purchase directly from the school, and in fact, there is not new issues for the last decades and there is a fixed price when u subscribe it."

Issuance of debentures are tied to the capital need of a school.  CIS, CDNIS and HKIS have most of their campuses built so why would they need to issue debentures?  Their debentures also trade in the secondary market at what the buyer and seller agree upon.

- "it is so risky to buy it as school has not much asset to liquidate for your money back if anything goes wrong"

These are NOT investments.  These are debentures held by either current or prospective parents who want to send their children to the school.

- "GSiS got yearbooks open to parents and alumni only and their debenture is one of the lowest among all top tier IS in HK, $375k only, but you can buy it when the school offer you a place."

You should look at this page first (http://www.isf.edu.hk/en/admissions/fees-and-tuition/).  You are mixing up the "high value" debentures which carry certain rights with capital levy which all students have to pay.  ISF is actually cheaper at HK$200k.

作者: HKTHK 時間: 13-3-6 17:30

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Guess he still made money on the CIS debentures, but the recall must have been "painful"?

作者: Shrimpiggy 時間: 13-3-6 18:07 標題: 回覆：HKTHK 的帖子

I am talking about the capital note but not the capital levy everyone should buy.
I think it is more clear about how the capital levy works and it is clear enough to me.
I really don't know how the capital note can be traded in the market which is more than the 4.5mio offered directly by the school.

作者: HKTHK 時間: 13-3-6 18:26

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But you are comparing the ISF Capital Note with the GSIS Capital Levy which are two entirely different things
The debentures are traded in the secondary market ALL the time. I personally know people who have purchased secondary debentures of CDNIS, CIS and ISF. And why should they be at the offer price and not a "market" price?

作者: HKTHK 時間: 13-3-6 18:27

回復 HKTHK 的帖子

And BTW, all secondary trading are NOT done at par value or price offered by the school

作者: Shrimpiggy 時間: 13-3-6 18:39 標題: 回覆：HKTHK 的帖子

Yes, there is only two kinds of debentures for GSIS (375k/250k) both are one off and not related to any placement priority.
Once HKIS, CIS, and CDNIS could be traded in the secondary market before but it is not possible anymore as everyone has to buy it from the schools directly. It is kinda self-regulation....

作者: shadeslayer 時間: 13-3-6 19:01 標題: 引用：Yes,+there+is+only+two+kinds+of+debentur

原帖由 Shrimpiggy 於 13-03-06 發表
Yes, there is only two kinds of debentures for GSIS (375k/250k) both are one off and not related to ...

I think GSIS has only one debenture, $375k.

作者: Shrimpiggy 時間: 13-3-6 19:10 標題: 回覆：shadeslayer 的帖子

Hi Shadeslayer, The 265k is the option B which is non redeemable. The 375k is refundable.

作者: HKTHK 時間: 13-3-6 20:14

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Unless this is a policy that they have recently implemented and that is contrary to what they state on their website, this is what I can find on their website:
[p=20, null, left]CAPITAL DEBENTURE

[p=20, null, left]Parents may purchase a Capital Debenture. No further annual capital levies are assessed for the duration of time that their child is enrolled at the school. Upon leaving the school, parents may sell their debenture. Historically, parents have sold Capital Debentures for more than the original purchase price. See Capital Debenture Conditions for more information.

http://www.cdnis.edu.hk/admissions/admission-procedures-policy/68.html

They also have a 50% gain sharing as stated in the details underneath.

Shrimpiggy, where are you getting your information?

作者: HKTHK 時間: 13-3-6 20:17

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BTW, that is for CDNIS

作者: Shrimpiggy 時間: 13-3-6 20:42 標題: 回覆：HKTHK 的帖子

You can ask to confirm that the school use Clause 11 to redeem the debenture as the disapproval of the transfer from the last few years. That's why there is no more debenture tradable in the market.

作者: HKTHK 時間: 13-3-6 20:49

回復 Shrimpiggy 的帖子

That's hardly surprising. CIS is recalling their debentures as well. I am still not sure what your criticisms are though. Or have we over-debated this already?

作者: 21Ckid 時間: 13-3-6 20:50

I can add/clarify some of the above info:
You can buy ISF debenture in 2nd hand market by contacting club membership agencies. There are several active in HK, e.g(http://www.evergolf.com.hk/) .The current quoted price is still around $5m. I wonder if there is any transaction given the IB results and u placement for 2012 are a bit disappointing. They will handle the paper work. You still need the school to approve and re-register.

You can also fax ISF a form to be put on the waiting list. I guess they may not issue new ones until the market "catches" up.

作者: 21Ckid 時間: 13-3-6 20:52

Does anyone know what happens to those who purchased CIS debentures for 6 or 7 million a few years ago? If they can only redeemed it to the school, what a big loss? Would the same happen to ISF one day? i.e. if it becomes equally successful.

作者: HKTHK 時間: 13-3-6 21:33

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They recalled it at par and then will issue a new type. Some people, think it went up to almost HK$8 mil, will face a loss. Heard some people are refusing to send it back though. My info was a couple months old though. Not sure if there are any updates.

作者: Shrimpiggy 時間: 13-3-6 21:36 標題: 回覆：21Ckid 的帖子

It's a bit distorted that pricy one must be the best one.

作者: HKTHK 時間: 13-3-6 21:38

回復 21Ckid 的帖子

Theoretically, it can be redeemed by the school at your purchase price. But the risk is reduced by the gain sharing mechanism so they have less incentive to call your debenture and issue new ones.

作者: HKTHK 時間: 13-3-6 21:39

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Hmm, I think the market doesn't share your opinion?

作者: Shrimpiggy 時間: 13-3-6 21:51 標題: 回覆：HKTHK 的帖子

Yes....so don't follow the flock of sheep...

作者: 21Ckid 時間: 13-3-6 21:57

回復 HKTHK 的帖子

Oh, what a shock to those holders, facing losses in millions. The worry is, if you purchase ISF notes now for 5 million and the par value of that batch was say the earlier ones at 3m, 1.6m or even those below 1 m, if ISF does so well in future like CIS, it may do the same thing and the millions are gone. No appeal as the terms do allow the school to do so. If ISF disappoints, its market value will drop or even disappear.

So, i guess this is not really an investment per se, it is game for the really rich, those who consider 5m a spare change. If 5m is something to you, just don't buy it.

作者: 21Ckid 時間: 13-3-6 22:02

回復 Shrimpiggy 的帖子

It is not easy to say whether something is worth it or not. Sometimes, precious commodities (ISF notes being the only one tradable, and with most still held by those with kids at school, supply is limited) command whatever price the buyer is willing to pay. That's why taxi licence can be sold for 7m!!!

I heard even in the heydays, not more than 2 or 3 CIS debentures were traded a year. I guess this is just not a game for people like us. With such thin trading, and i doubt if any isf notes had ever being traded at 5m, the so called market price is not very meaningful.

作者: Shrimpiggy 時間: 13-3-6 22:22 標題: 回覆：21Ckid 的帖子

It is true, the debenture liquidity is an issue thus it is not a transparent as stocks or any other investment products. For those real wealth people, they just need to donate tens of million that their kids can secure a place without fight for the debenture. For billionaires, their fame is more than enough to make many good school to pre-empt a place for their grand children without doing anything.

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