Chesnara Share Discussion Threads

[bluemango] 03/2/2022 09:14

Well the market seems comfortable with all this, highest level since end November and a nice little uptrend.

[my retirement fund] 03/2/2022 09:12

4.75% seems to cheap for subordinated debt when you look at other financial subordinated debt such as legacy building society pibs or perpetual preference shares.

[boystown] 03/2/2022 09:01

jonwig - thanks for your views - even though they're worrying. And sorry for not including you in my shortlist of people who know what they're talking about here. I remember you from TMF days I think?

[pvb] 03/2/2022 08:48

...Yes. I remember when they used to have a very boring, plain and simple annual report & accounts document. Very reassuring! That changed a few years ago now.

[jonwig] 03/2/2022 08:31

riverman - a senior bond would be subordinate to Solvency 2 capital falls. The latest S2 surplus was 142%. A run-off book tends to increase surplus, open business is more sensitive to downsides.

142% is OK, not brilliant. I seem to remember the recent presentation hinting at open book activity.

I've held CSN for several years, and have always been encouraged by the "most boring company ever" story. Recent events don't suggest selling, but I'm more wary.

[boystown] 03/2/2022 08:17

riverman77 / Williamcooper104 - do you both hold? It would make me feel a lot more comfortable if the answer is 'yes'! :-)

[riverman77] 03/2/2022 07:43

A typical corporate bond would give strong claim on a company's assets so very safe. Holders of a subordinated bond such as this could be wiped out if capital ratios fall below a certain level. So much riskier and hence the higher yield.

[williamcooper104] 03/2/2022 07:25

That's a crucial point - agreed

[williamcooper104] 03/2/2022 07:24

Credit spread as in the 10 year gilt is about 1.20 percent - so CSN are paying about 3.5 percentage points (or 350bps) over that A highly rated company with an A rating might may 60-120 over, a sold investment grade company but not as highly rated, say BBB might pay 150-200

[riverman77] 03/2/2022 07:19

It is a subordinated issue (tier 2 capital), so that is not expensive.

[jonwig] 03/2/2022 07:09

Boystown - the more risky (ie. low grade) the bond, the higher the interest rate coupon they have to offer. William says 4.75% is very high. I think I'd agree with that.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

CASSINI - no, "chsnr".

[cassini] 03/2/2022 00:03

Next they'll change their name to 'Chsnr'...

[al101uk] 02/2/2022 23:32

Recently:

1. Changed CEO to someone who is obviously more ambitious.
2. Hired a Head Of Strategy from Pheonix
3. Talked of making purchases based on "synergies"
4. Rasied funds via a bond placing

Chesnara are boring no more.

[boystown] 02/2/2022 22:53

but the coupon with a credit spread of c350bps looks more sub-investment grade

I have absolutely no idea what this means, but it sounds even more worrying! But yield, ptbv and p/e all look great. Even the chart looks suitably boring for those of us seeking yield.

[williamcooper104] 02/2/2022 22:36

Indeed BBB- is the lowest investment grade debt but the coupon with a credit spread of c350bps looks more sub-investment grade

[boystown] 02/2/2022 20:54

Thanks jonwig; that's worrying - I thought CSN were a solidly boring outfit with a reasonably safe yield? But valuing life insurers for the uninitiated isn't easy.

[jonwig] 02/2/2022 20:26

Boystown - I think an EU listing makes it easier for CSN to pass EU regulatory tests for its EU business (Solvency2, which the UK may simplify). It may see NL as the preferred place to acquire and consolidate businesses.

A bigger fact is that BBB- is, I believe, the lowest investment grade rating. That might not be so encouraging!

[dosser50] 02/2/2022 17:18

Chesnara PLC (LSE:CSN) has announced the pricing of its £200mln inaugural debt capital markets issue.

Proceeds from the funding are earmarked for general corporate purposes including investments and acquisitions, the company said in a statement.

The debt instruments are BBB- rated by Fitch, have a 10.5 year maturity and carry a coupon of 4.75%.

"We are delighted with the level of investor interest in Chesnara's first notes issuance,” said chief executive Steve Murray.

“The financing will be utilised primarily to provide financial flexibility and accelerate our growth strategy including the delivery of value from future acquisitions, while also underpinning, and diversifying our group's capital structure.

"The notes represent an important milestone for Chesnara in enhancing our group's financing capabilities which will leave Chesnara well positioned to pursue further growth opportunities."

[boystown] 02/2/2022 15:21

Bit of good news, but can anyone explain why "Notes are expected to be admitted to the Official List of Euronext Dublin and to trading on the Global Exchange Market of Euronext Dublin"?

[speedsgh] 27/1/2022 19:10

Mr Benn. Classic!



Reckon you're showing your age, LG, if you used to watch it with your kids, not as a kid! ;-)

[lord gnome] 27/1/2022 17:04

Showing your age with that one, Kev. I used to sit with my kids to watch Mr Benn :-)

[kev0856153] 27/1/2022 17:00

...the shopkeeper appeared.

[cassini] 27/1/2022 16:44

...and as if by magic...

[petewy] 26/1/2022 16:21

I have been using Microsoft value4 goes up

[cassini] 26/1/2022 13:02

Got to park your money somewhere when inflation is raging. This is the nearest thing to an old-style high-interest bank account!