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                     C O N V E R T I B L E   B O N D S 

                                        W  E E K L Y   U P D A T E 

 

          Bi-Weekly, I compile a list of Convertible bonds that trades
         below $1000 (par
)
and below 25% conversion premium.

 

          Those two criteria were chosen to give us a "bi-weekly indication" of the average price,
           yield and yield to maturity of " safer " convertible bonds.

 

          Engineering of a convertible bond portfolio.

 

          A convertible bond portfolio can be engineered as a, 
          Debt portfolio
,   an Equity portfolio    or a Balanced portfolio.

 

------------------------------------------------------------------------------------------------------------

DEBT PORTFOLIO
                                 EQUITY PORTFOLIO

> 15% Conversion premium                             < 25% Investment premium

< 25% Investment premium                              > 25% Conversion premium

                                          BALANCED PORTFOLIO


< 15% Conversion premium                           < 25% Investment premium 

------------------------------------------------------------------------------------------------------------------

 

Below is a compilation of the " weekly average "  Convertible bond selections.

                    

LEGEND:

Columns:     

#1=      Bond   price     ($),  
#2=      Bond   yield     (%),  
#3=      Bond   yield   to   maturity     (%),
#4=      Bond   conversion   premium     (%),   
#5=      Bond   investment   premium     (%).
#6=      Number of Convertible bonds composing the weekly average.

-------------------------------------------------------------------------------------------------------

 

 

                                                 # 1           # 2          # 3         # 4         # 5 

                                                  ------          ------         ------       ------      ------

October 11, 2004

aQuantive,      2.25s24              984             2.3         2.4         23         23
Amer Fint'l,     4.38s24              988             4.4         4.5         21         12                            Barrick Gold,   3.00s21             741              4.1        5.5           9         14
Disney (Walt)  2.13s23             972              2.2        2.3          22          8 
Dominion Res.2.13s23             990              2.1        2.2          11        10
Fluor Corp.,     1.50s24             995              1.5        1.5          25        17
HCC Ins.,          1.30s23             980              1.3        1.4          10        14

Lennox Int'l       6.25s09            907               6.9        9.0          9          -5

Medtronic Inc.,  1.25s21            985               1.3        1.3         14          6 

PRG Schultz,      4.75s06           933                5.1        8.4         22         -2

Sunterra Corp.,   3.75s24           924               4.1         4.3        10         13

 

AVERAGE:                                945                3.21      3.89        16         10  

=================================================

 

                          

W E E K L Y    A V E R A G E S:

 

                                  # 1           # 2          # 3         # 4         # 5      #6

                                  ------          ------         ------       ------      ------   ------

Oct.11, 2004           $945          3.21%       3.89%     16%      10%    11