# NAV Canada bond - would u buy??



## jargey3000 (Jan 25, 2011)

just sniffing around the Bond offerings at RBC-DI (never know...might buy one...)
this NAV Canada bond caught my eye. Any comments from the bond experts in here?

NAV CANADA 5.304% 17APR19	Apr 17, 2019	5.304	1.909	103.3629	AAL/Aa2/AA-	

(sorry, col. headings are missing, but u can prob. figure it out...)


----------



## like_to_retire (Oct 9, 2016)

Don't really know your question? Nav Canada is basically a monopoly, a not-for-profit corporation that spun off Transport Canada's civil air navigation system when it was all the rage to privatize government departments back in the 90's. It would never happen today in my opinion. They have a rock solid rating for bonds and operate a business that doesn't allow competition. How could you go wrong other than the fact you're paying for that low risk with a paltry 1.9% on a one year bond. Could you not get that with a simple HISA that would probably increase in interest as rates rise over this year?

ltr


----------



## OnlyMyOpinion (Sep 1, 2013)

I find it difficult to say. Not because of the particular bond, but because it depends what your plan is and where you are holding it. 
Since it is at a premium (I think, 103.36), is this held in a registered acc and part of your FI allocation, does it (1.9%) compete with a 1yr GIC or the liquidity of a HISA? Is this part of a 5 yr bond ladder, etc.


----------



## RBull (Jan 20, 2013)

I agree with what LTR and OMO said. 

Why bother with a 1 yr bond @ that low semi annual yield, is it registered or unregistered and how does this fit with your overall FI strategy? If unregistered money a HISA @ EQ for example pays more- 2.3%, is guaranteed up to 100K, has complete liquidity, and possibility of a rate increase over time. If registered money best RBC 1 yr GIC now is home trust @2.25%. There are other investment grade (but lower than Nav Can) bonds available with slightly later maturity dates in mid june for example paying .4%+ better. 

However we would need to to understand your situation better to comment more.


----------



## jargey3000 (Jan 25, 2011)

sorry ..I should have put in the col. headings:
5.304% is the Coupon rate
1.919% is the Semi-annual yield
does that mean the annual yield would be something like 3.8%???


----------



## like_to_retire (Oct 9, 2016)

jargey3000 said:


> sorry ..I should have put in the col. headings:
> 5.304% is the Coupon rate
> 1.919% is the Semi-annual yield
> does that mean the annual yield would be something like 3.8%???


No. The yield is 1.919%

ltr


----------



## RBull (Jan 20, 2013)

like_to_retire said:


> No. The yield is 1.919%
> 
> ltr


RBC shows semi annual until you get into buy stage online. I am estimating annual yield to be a tiny bit more 1.93% .....not worth mentioning.


----------



## like_to_retire (Oct 9, 2016)

RBull said:


> RBC shows semi annual until you get into buy stage online. I am estimating annual yield to be a tiny bit more 1.93% .....not worth mentioning.


Yeah, I was just trying to make the point that you do not double the semi-annual to get annual. 

You plug it into a calculator and it will give the teeny difference.

ltr


----------



## jargey3000 (Jan 25, 2011)

thanks for the education guys! guess i'll stick with what i know.........tiddlywinks.....


----------

