West.brom 6.15% Discussion Threads

[my retirement fund] 01/12/2023 22:54

More insane profits were reported. The clock is ticking very loudly.

[my retirement fund] 29/8/2023 18:46

When will these get redeemed?

[my retirement fund] 05/7/2023 20:47

Looking perky

[my retirement fund] 03/6/2023 22:54

Insane profits reported ! Staggering !! Pigs in the trough !!!

[my retirement fund] 10/4/2023 00:22

I see whilst Jonathan Westhoff has stolen millions of pounds of the small number of PIBS holders income over recent years, he pocketed a whopping £650,000 in salary and £175,000 in bonuses last year. That's more than enough money to pay the correct coupon the PIBS holders should have received in full last year with plenty left over!

[cc2014] 20/12/2022 12:20

Good point CousinIT on the perception of rewarding PIBS holders in preference to others.

The half year account to 30th September show the Society has not bought any PIBS back in the last year.


I note the offer has dropped again this morning suggesting whatever volume the MM took on, or are working on a commission basis isn't shifting at sufficient speed.

[cousinit] 20/12/2022 12:02

I also wondered if the Society was the buyer, but would have expected a similar announcement to the earlier buyback.

The issue might be that due to the liability management exercise they said they had no plans to redeem the PIBS. Don't forget the LT2 holders took a similar bath to PIBS in the original collapse so they are mindful of 'rewarding' holdouts in the PIBS so they end up in a better position than higher ranking debt.

The pandemic and current (likely) recession give them a get out of using real cash to redeem cheap but non capitally efficient debt.

[my retirement fund] 20/12/2022 11:48

Would love to know who owns them, I had wondered if WBS had been buying them themselves, but they surely would not only need permission but would need to declare this. They are really looking a right shady outfit.

[cc2014] 20/12/2022 10:34

If WestBrom are paying 1.48% a year on this for T2 capital compared with the 2.4% they are paying to Joe Bloggs saver on instant access or 4.25% for a 5 year bond they aren't ever going to redeem it at any sensible price.

One wonders who actually owns the £8m or so PIBS out there and how much attention they are paying to their investment. The liquidity is terrible suggesting most owners have forgotten they own it?

[my retirement fund] 20/12/2022 10:15

From West Broms point of view, who have effectively robbed the debt holders here, its the equivalent of pounds for pence, literally ! The £1 notional value of this PIB probably has a fair value market price of 10 pence and that may be overgenerous!

Its a wonder the holders of the PIBs have not taken West Brom to court really.

[my retirement fund] 17/12/2022 13:58

*pibs paying 1.48% a year

[my retirement fund] 17/12/2022 13:57

With the pics paying 1.48% a months, this is cheap money that now looks like it will never be redeemed. I say cheap, it's for all intense and purposes cheap to the point the pibs holders are paying them! Between 15p and 20p seems a sensible valuation. My guess to the lack of price correction so far is simply no one has tried to sell any recently and presumably someone has just woken the market maker up from a long slumber.

[cc2014] 17/12/2022 12:16

The share price has been completely mispriced for months imho.


This instrument is currently paying 1.48% per annum.

If West Brom makes sufficient profits the maximum payable until 2026 is approximately 3.21% per annum if my maths is right.


A broad comparsion might be the Aviva prefs which are paying around 7.5%. But Aviva is well a funded company with no history of not paying it's coupons. West Brom is not well capitalised and has only just recovered enough that it's starting paying coupons in the last year for the first time in 10 years.

If you take the view that that will be a short shallow recession and house and commercial prices aren't going to fall much and won't cause impairments or losses for WBS, then what coupon would be appropriate for WBS? Well, imho something north of 10%. But lets call it 10%. That would imply a share price of 30p if the coupon immediately rises to 3.21% (which I doubt)

If you take the view that it's going to be long recession causing house and commercial prices to be significantly under pressure with mortgage holders defaulting, within 2 years you could see large losses at WBS again and the coupon going back to zero, in which case the share price might be around say 15p as some people are always willing to take a punt.

[cousinit] 17/12/2022 11:14

There clearly seemed to be a buyer in the background earlier the year when I sold mine. That all seemed predicated on the society redeeming the stock in October. As long as there is no move to redeem, the yield is held back by the PPDS reserve calculation. If it was the original PIBS terms it would now be paying c6% instead of 1.5%. Higher general interest rates now create a drag for holding out. Can only assume the buyer has gone and someone needed to sell or the MM saw the risk of not moving the quote down.

[ammons] 17/12/2022 07:52

What happened here? Anyone know? I cant find anything. They seem to have fallen by exactly one third. Any ideas?

[cc2014] 08/9/2022 13:58

I guess they've had 2 opportunities since they started paying the coupon to redeem these and they haven't so the chances seem to be diminishing to me.

5 year gilt at April 21 plus 2.8%, given an annual interst rate somewhere around 3.2%.
For whatever reason we are at 1.48% which I'm guessing will rise next time but who knows what the directors will think is appropriate.

Regardless if they aren't going to get redeemed these are now worth less today than they were yesterday.

Given I can now get 3.5% on a 1 year FSCS bank bond these are now worth... not so much...

[my retirement fund] 08/9/2022 13:36

That would be a normal explanation,

In line with the distribution policy above the Board passed a resolution to make an interest payment in respect of the Society's PIBS of 0.74% on 5 October 2022.

not really clear and destroys confidence. Thanks for you PM heads up just seen that, appreciated.

[cc2014] 08/9/2022 10:33

I have to assume that as at the year end the surplus on the notional PPDS was not enough to cover off a 100% PIBS distribution.

I would have thought it would be though.

Whatever, I sold around 6 months ago and won't be buying them back at the current price.

[my retirement fund] 08/9/2022 10:08

It doesn't look correct to me, very strange. You have to wonder if they actually know what they are doing ? I'm pretty sure they have been buying them back too without seeking permission to do so.

(I no longer hold).

[cc2014] 08/9/2022 09:53

Well, nearly two hours into the trading day, the offer has just moved but not the bid.

Seems a litle surprising to me since I think the directors at WBS have once again comfirmed to me they cannot be trusted.

Or maybe I misunderstand the instrument?

[cc2014] 08/9/2022 08:22

Intersting RNS.

I get the number to be either 1.6, possibly 1.74 but not 0.74

[my retirement fund] 08/6/2022 13:12

If you click on the news tab above you will see the last coupon payment that was paid, the first in many moons !

[ammons] 31/5/2022 17:21

Nothing about redemption, yes indeed. Sorry for the silly question but is the coupon still being paid?

[my retirement fund] 26/5/2022 16:59

Good results as expected. Nothing mentioned about redemption but moved up strange.

[my retirement fund] 04/5/2022 14:55

Not long to go for company RNS. With 5 year guilts on a fairly aggressive upwards trajectory now, they have surely got to address the remaining PIBS in the results.