Sunlife Bond should I sell or not?
I own a SUN LIFE FINL (Canada) 5.59% 30JAN23 yielding 8.753 it is rated Ah/A (recently downgraded). The bond is unsecured debt. I’d take a 2% loss if I sold it now.
After purchasing it, I am rethinking the choice due to the fact that its unsecured and that is so far out time wise. I don’t need the money right now, but am wondering if I have made a bad decision. Thoughts?
Please only reply if you actually have traded in bonds / have some experience.
Thanks Alot
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about 1 year ago
I don’t know much about Sun Life other than a news article so I cann’t swear it is a solid company but it appears that way. The down grades are occuring across the entire insurance industry. The corporate bond market had dropped as much as 7% as of Nov last year (from its 1 year high). Bonds have dropped about 1% since the beginning of the year.
The bond was a long term unsecured bond when you bought it and having dropped only 2% doesn’t seem to be a reason to sell now. You are getting a good return on your money – so the question is where would you put the money from selling these bonds? You could put it in a safer place but with a lower yield. You might want to put a stop on these bonds to be sold if their value drops by more 10-15%.
I think your major risk is if inflation goes wild like it did around 1980 – then your bond price could drop dramatically.