Equity, Deposits, Hybrids: Good, Good, Ugly

In July 2006, the now bankrupt RiverCity Motorway issued a prospectus promising an initial yield of 6% per annum. They paid it for the first few years but the strange thing was the tunnel wasn’t even built at the time of the float. Not one cent of revenue was going to be generated until 2010 when the road was expected to be opened. As we pointed out at the time, the yield was nothing but a Clayton’s yield. They raised extra money from investors upfront, just so they could give some of it back while the road was under...

In July 2006, the now bankrupt RiverCity Motorway issued a prospectus promising an initial yield of 6% per annum. They paid it for the first few years but the strange thing was the tunnel wasn’t even built at the time of the float. Not one cent of revenue was going to be generated until 2010 when the road was expected to be opened.

As we pointed out at the time, the yield was nothing but a Clayton’s yield. They raised extra money from investors upfront, just so they could give some of it back while the road was under construction.

RCY Yield Spiel.JPG

Source: RiverCity Prospectus

{{content.question}}

Mastercard

{{ twilioFailed ? 'SMS Code Failed to Send…' : 'An SMS verification code has been sent ...' }}

Hi {{ user.FirstName }}

Looks like you have already taken a free trial

Please enter your payment details

We have sent you a code via SMS to {{user.DayPhone}}

please enter this code below to complete your SMS verification

We cannot send you a code via SMS to {{user.DayPhone}}

If you didn't receive SMS code please

SMS code cannot be sent due to: {{ twilioStatus }}

Please select one of the options below:

Looks you are already a member. Please enter your password to proceed

Please untick this box when using a public or shared device


Verify your mobile number to proceed…

Please check your mobile number below and press the Send Verification Code button. This will be used to complete your verification in the next step.

Please sign up for full access

Mastercard

Updating information

Please wait ...

Trial

Mastercard
{{ productPrice }} / day
( GST included )
Price $0
GST $0
Discount -{{productDiscount}}
TOTAL {{productPrice}}
  • Mastercard
  • Visa

Please click on the ACTIVATE button to finalise your membership

Mastercard

The email address you entered is registered with InvestSMART.

Please login or select "Don't know password"

Please untick this box when using a public or shared device


Register as a new member

(using a different email)

Related Articles