Nationwide7.25% Discussion Threads

[kiwi2007] 29/12/2021 22:16

Noticed over Xmas that these were redeemed last month. Wondered why my UK portfolio was cash rich. Sorry to see them go but they had a nice run.

[holts] 05/4/2020 09:08

Thanks , belatedly !

[kiwi2007] 23/3/2020 09:39

3.884% + benchmark gilt. (I think).

[holts] 20/3/2020 17:07

At redemption date if they do not repay does anyone know the reset rate , TIA

[kiwi2007] 07/9/2016 22:57

On August 1, Vodafone PLC sold a 33-year £800 million bond paying an interest rate of 3.375%—its first sterling corporate bond since 2009. Four days later, the world’s second-largest mobile carrier issued a bigger, longer-dated bond at a lower interest rate, paying 3% on a 40-year £1 billion bond.


Investors, meanwhile, poured a record amount of cash into sterling investment-grade bond funds in the week ended Aug. 10, according to strategists at Bank of America Merrill Lynch.

“It’s a game-changer,” said Marco Baldini, head of European debt syndicate at Barclays. “The first half of the year saw the lowest volume of issuance in modern times. The Bank of England has effectively breathed life into the market.”

U.K. bond markets have been on fire over the past several weeks. The country’s surprise vote to leave the European Union sent government bond yields sharply lower as investors rushed for safety and bet on central-bank action. The BOE announcing it would buy £60 billion of government bonds as part of its easing measures in early August added further impetus to the downward lurch in yields.


The yield on the 10-year U.K. government note is hovering near a record low at 0.54%, down from roughly 1.37% before the vote. As corporate bonds are priced in relation to government debt, this fall in financing costs was a boon for companies even before the BOE’s announcement on corporate purchases.

A handful of firms came to market following the Brexit vote as borrowing costs fell, including U.S. whiskey-maker Brown-Forman Corp., which sold £300 million of 12-year bonds on June 30 at an interest rate of 2.6%.

The BOE’s corporate-bond plans provided another fillip for the market. Strategists at J.P. Morgan Chase & Co. calculated that last week was the busiest week since the financial crisis for sterling investment-grade corporate and financial bond sales with £5 billion of new issuance.

Oil giant BP PLC issued a sterling corporate bond for the first time since 2011 on Tuesday, selling a £650 million bond at an interest rate of 1.177%. Other recent borrowers include auto maker BMW AG and Barclays PLC.

On Monday, Swedish lender Nordea Bank AB became the latest borrower in sterling markets when it tapped an outstanding £300 million bond due in 2022 for an extra £150 million.

“The Bank of England has definitely helped reopen the sterling bond market,” said Vassilis Paschopoulos, a portfolio manager at London-based investment manager Numen Capital, who said he has been placing orders in all the new issues.

Sterling investment-grade corporate-bond issuance has declined every year since a recent peak of £37 billion in 2012 to £18 billion last year, according to Dealogic. Despite the recent flurry of activity, the market is still on course for its lowest amount of annual debt sales since 2010.

Part of the problem has been pricing. Earlier in the year, it was significantly cheaper for U.K. companies to issue money in euros or dollars, bankers say, and then use derivatives to swap that money back into sterling, than just borrow straight in British pounds. The rally in U.K. bond markets has narrowed that gap, making it more attractive to issue sterling bonds.

The sterling market was traditionally the preserve of a small club of investors, Mr. Paschopoulos said, but the promise of central bank buying has encouraged a wider range of buyers. “This buying from the BOE makes hedge funds and other investors want to get involved.”

Still, some are wary of markets where central banks are large buyers.

Mark Kiesel, chief investment officer for global credit at Pacific Investment Management Co., said he is holding on to some U.K. bank bonds, where he still sees room for further price rises. But generally he prefers U.S. corporate credit markets, where yields are higher and central banks aren’t buying, unlike in the euro area and the U.K.

“Not only are you not getting compensated in those markets as much as in the U.S., but those markets are also more vulnerable to tipping into recession,” he said.

Write to Christopher Whittall at [e-mail]

[kiwi2007] 19/8/2014 01:25

Good results today. Beat the hell out of shareholder banks.

Three yes, 3, page report unlike the 4 or 500 page disingenuous waffle from the big banks.

Both NABA and POB have been great performers (for me anyway) with excellent total returns on initial investments.

[kiwi2007] 19/8/2014 01:23

Double post...

[bamboo2] 23/11/2013 14:36

Nationwide seeks to raise up to £500m with core capital deferred shares

The Guardian, Friday 22 November 2013 17.58 GMT

Nationwide's CEO said he expects investors to receive an annual payout of between 9.5% and 11.5%, with a cap of 15%.

Nationwide building society will raise up to £500m by issuing a type of debt that meets new rules on capital but does not compromise the group's mutual model – becoming the first customer-owned lender to do so.

Chief executive Graham Beale said the group spent four years designing the securities and will raise £300-500m through the core capital deferred shares, from institutional and professional investors.

The new instrument is an alternative to permanent interest rate-bearing shares (Pibs), which were issued by mutually owned financial services firms in the past. However, they no longer count toward core capital under new regulatory rules, and may address concerns over the mutual model. Mutuals were seen as vulnerable compared with publicly listed banks because they cannot tap existing shareholders for funds in times of crisis.

Beale said the issue would establish a precedent for mutuals across Europe.

He added: "It's also then available to the rest of the UK mutual sector, the other building societies and, talking to our advisers, they think this may well play out with some of the European mutuals."

Investors who buy the shares will be entitled to just one vote at meetings, regardless of how much they have invested.

The coupon on the shares is discretionary and not fixed. It will be based on how the business is performing. Beale said that, based on current market conditions, he expected investors to receive an annual payout of between 9.5% and 11.5%, with a cap of 15%.

Beale said the issue would improve its leverage ratio by between 0.12 and 0.2 percentage points.

Nationwide's leverage ratio stands at 2.3% and it must get that up to 3%6 by 2015. Beale said it was well-positioned to achieve that goal, which was agreed with Britain's financial regulator in July.

Beale said he does not expect Nationwide to issue more core capital deferred shares before 2015, and is confident it can meet that target through retained earnings. "The important thing is we've got a stake in the ground if we need to call on this sort of issuance but we have no immediate or medium term plans to issue," he said.

A prospectus is being sent to investors and trading in the new instrument will start on 9 December.

Nationwide said last week that it had more than doubled its profit in the first half of its fiscal year and was picking up business from all major competitors.

[spectoacc] 25/9/2013 08:40

All out, 100p for POB, 91p for POBA, more than I paid years ago and very happy with the recent avg, as well as the coupons along the way. Will be hard to find as good a home for the money. Good luck those still in.

[spectoacc] 30/8/2013 13:05

Tendering all my POB and POBA - will miss them, but not prepared to hold onto a tiny rump.

[spectoacc] 27/8/2013 10:25

Tender offer, not sure how I feel about it, would rather the interest continued to roll in over the years.

[spectoacc] 16/7/2013 09:15

Very happy so far. Notwithstanding there's an element of luck, Nationwide aren't Co-op. Seems they've been given until 2018 to raise extra capital (which they'd argue they don't actually need) and there's no "black hole" like there is at Co-op (which has arisen due to the usual bankers hubris - buying Britannia's massive commercial loan book with its ongoing massive losses).

Can't rule out Nationwide "bailing in" the PIBS in future of course - is possible Co-op will set a trend. But a happy holder here.

[spectoacc] 25/6/2013 10:19

Woah, still in all my Nationwide PIBS. They're no Co-op, though I guess market is saying they may be in future. The "need" to raise c.£1bn is a regulatory thing, but no less real all the same. But they're (as yet) not talking about doing anything to the PIBS - it's a new class of debt they'll issue, unlike Co-op who plan to "bail in" the PIBS.

Bought more today, suspect I'm the only buyer!

[spectoacc] 24/5/2011 14:10

Yes rather amusing, Moodys reckons UK may not bail out banks in future. Only they will of course. (And shouldn't have done in the first place, fwiw).

[engineer66] 22/2/2010 16:14

Look good relative to Bonds, but one factor is the West Brom effect. You are more certain of payments with a bond.

[lbo] 20/11/2009 16:36

Profits more than halve at Nationwide

[ukneonboy] 16/11/2009 12:21

agreed, SPECTTOACC

Profit margins are still very healthy for the B/Socs
When our fixed rate mortgage deal ended with Britannia 3 weeks ago, we looked to renew for another "fixed" rate, for 4 years, the best they (Britannia)could offer was 5.75% and a massive £1000 arrangement fee.

PIBS are therefore a great buy right now for savers and depositors.

[spectoacc] 02/11/2009 16:23

A fair comment from them; all the state aid gone to the banks.

But I don't buy the "..Record low interest rates have squeezed margins". Margins are huge, and even with no net increase to mortgages, everyone's squeezing as people come off their previous deals.

(If you come off your 4% fix with a building society, you might hope to slip on to say a 1.5% variable with interest rates at 0.5%. No chance - more like 6%+, with no hope of moving to a better deal/different institution with deposit requirements so high).

[lbo] 02/11/2009 15:40

Huge bail-outs leave building societies miffed



Building societies, which have largely weathered the financial crisis without government assistance, are bemoaning an "unlevel playing field" in a market dominated by state-backed banks.

Although it is a year since a wave of mergers saw a number of supposedly safe building societies collapse into the arms of stronger rivals, the sector is still finding life tough.

"Markets are much more difficult now than a couple of years ago," says Adrian Coles, director-general of the Building Society Association. "This year has seen virtually no net mortgage lending and no net increase in savings. It has been a tough market in terms of the business building societies can attract."

The sector is under severe pressure. While record low interest rates have squeezed margins, building societies have been forced to push saving rates ever higher to attract retail deposits. At the same time, mortgage arrears have risen, funding costs have increased and demand for home loans has slumped

[spectoacc] 02/11/2009 10:45

I don't get why Fitch has downgraded Nationwide now, it's ridiculous. Not saying N/wide is a bastion of strength; just that if you're going to downgrade, do it properly a year ago (or even 6 months ago) when the house price forecasts were dire and LIBOR sky-high.

Doing it now just makes them look stupid, as shown by one of the Nationwide PIBS actually being marked up on the day it came out (Friday).

[lbo] 30/10/2009 23:32

Nationwide and mutuals take a battering

[ukneonboy] 27/10/2009 06:46

Half Yearly (Gross) interest payment dates :-

05 December and 05 June