I was thinking about diversifying my portfolio with some bonds for some time already. At the very end of March, I decided to purchase my first investment of this type.
There are not that many bonds being issued and available for retail investors in Lithuania. When I saw that a Lithuanian company “Viada LT” was offering a bond issue, it got me interested. Even though I don’t like the company too much personally, I think it’s a stable one. The yield of 5% is more than the average dividend yield of companies in my portfolio as well. So I decided to jump to the train on the very last day of the public offering.
Shortly about the company:
Viada LT, controlling the biggest chain of gas stations in Lithuania, started its activities in 1996 and is one of the oldest Lithuanian-capital gas station chains in Lithuania. Currently, the company holds 124 gas stations in the country and through its subsidiary also 75 gas stations in Latvia as well as carries out both retail and wholesale trade in motor fuels. The company is on the list of 500 strongest companies in Central and Eastern Europe (position 328), which is compiled by business risk management company Coface.
Purchase Summary
I bought one bond, worth €1000, on the 30th of March. These are the main characteristics of the offering:
- Face value: €1000
- Coupon rate: 5%
- Maturity: 3 years (1096 days)
- Interest intervals: semi-annually.
Based on this, I will get €50/year in interest for the next three years, and then will get the face value back.
This is the first time I was buying a bond, so it’s a new experience. Do you have any bonds in your portfolio? Do you prefer buying individual bonds or an ETF of bonds instead? I would love to read your thoughts!
Good buy. I bough AUGA bonds and guess would buy this one as well, but missed them somehow. Wery weak advertising, one of reasons why they managed to raise only 1 mEUR
Thanks P2035! I guess it’s quite hard to get media attention if it’s not related to Covid-19 these days 🙂
Interesting bond buy! I haven’t bought any corporate debt but I have bought sovereign debt. The bond market is roughly twice as large as the stock market. So there are a lot more opportunities.
Thanks Brian! I haven’t got some sovereign debt yet but it’s something to look for in the future. I didn’t know that the bond market is so large, thanks for the heads-up!
not so lithuanian company. It’s russian capital, sadly. A lot of people try to boicot Viada/Lukoil..
Hi David,
Yeah, it’s Russian capital, but technically it’s a Lithuanian company. Unfortunately, there are not that many choices for bonds in Lithuania, so I decided to go with this one, even though I don’t like the company myself 🙂 The main thing is the 5% interest rate and I think that the company is stable enough not to worry about its ability to pay back the debt.