Co-op.gp. 25 Discussion Threads

[ukneonboy] 15/2/2017 12:55

In your previous post, you asked "would I buy or recommend buying Coop Debt" - simple answer is I wouldn't touch it with a barge pole, and anybody considering this must be mad.

Secondly, it appears that you already have a copy of the 2013 Coop restructuring document and you refer specifically to page 164, of this document.

As I can not find or access the document, kindly post the contents of said document for all to see.

However, in the meantime, I do vaguely remember reading in the dim and distant past that when Cooperative Group was forced to sell-off it's high street Chemists businesses, back in 2012/13 the sureties, indemnities, loan guarantees, collateral, etc (specifically for Coop Bank) ceased to apply to the high street Chemists operations.

As I understand things, the same sureties, indemnities, loan guarantees, collateral obligations still apply to the Coop's Funeral Parlours, Grocery Shops, etc.

[pogue] 15/2/2017 10:53

I meet too many people try vainly mpstly to effect the market on ADVFN I am very careful apologies if I am taking u the wrong way but I still fail to see why u r wasting time posting here. The prospectus is online Google '42te prospectus'.
I got out of the bank months ago as I said at a loss on the purchase price but about even after interest payments. I have no intention of going back in until things become clearer an I see an advantage in doing so. I am 99% certain the bank will survive and probably get a new owner at a give away price as the PRA will not want a banking collapse on thier handa. The coop group will lose its 20% stake which they have already written down heavily. The funeral group group etc that are backing the 42te will not be sucked in as even in an LME I don't see how they have to pay. The only worry is the pension fund which no reliable data on the connection can be found.
I have since we started this discussion reduced my group position with intention of buying back later at a lower price as I see this as a opportunity to increase my holding.
Do u have a view or just more vague ideas?

[pogue] 15/2/2017 08:39

I am always wary of posters on ADVFN who have no skin in the game I can't understand why they would want to waste their time posting on such a poor discussion based website full of rampers and derampers.
You alude to connections to businesses connected but don't give details always a worry on ADVFN. Perhaps I know more than you? Here's a clue page 146.

[ukneonboy] 15/2/2017 06:48

I've stated previously that I've neither a LONG or a SHORT position in any Coop Notes, and that means I do NOT currently hold any Coop Debt and I haven't sold any Coop Debt either. Why ask the question again POGUE ??

Quite why I should have to answer this question is rather mystifying.

Not with standing this, it is abundantly obvious that Coop Bank is in a mess and still losing money.

I don't "like" my own bank but I certainly wouldn't bank with Coop. I would urge all Coop Bank customers to look elsewhere, use the SWITCHING SERVICE and move to a more financially robust bank.

Moving onto the indemnities and guarantees that Cooperative Group were required to provide as surety over Coop Bank, I think you will find that there are "charges" over many of the Cooperative Group's other business assets.

If you don't like this posting or previous posts...... too bad......DON'T SHOOT THE MESSENGER.

[pogue] 14/2/2017 20:11

I have a coop bank account no plans to move are you trying to scare people into a bank rum?
Can u detail the various banking guarantees between bank and group? I would be better interested to know.
20% stake in bank has been written down heavily in the group accounts.
You short on these?

[ukneonboy] 14/2/2017 18:55

It now transpires that the "For Sale" sign has been put up on the Coop Bank, due to the fact that the bank itself is still losing money and haemorraging both personal customers and business customers, at an alarming rate.

This is especially bad news for Cooperative Group which STILL owns 20% of the Coop Bank and still has various underwriting indemnities and guarantees secured on the Cooperative Group's other business property assets.

Probably now time to change your bank, if you currently bank with Coop Bank, but more worryingly if you still hold the Coop Instalment Notes 2025 (42TE), you might want to get rid off them quickly, before the stampede starts.

[pogue] 02/2/2017 11:53

lol I have a small holding of the COOP Group and am still massively in profit not including dividends. I had the bank ones but sold long ago at about 20% capital loss but about even after dividends. There are many underwriting guarantees but you will notice many were for a short time period to allow separation to proceed they are now expiring or have expired.

[ukneonboy] 01/2/2017 11:35

pogue, I suggest you go and check out EXACTLY what underwriting Guarantees and Indemnities the Coop Group had to give, during the last restructuring,(with regard to Coop Bank) it works out at considerably more than 5% exposure.

we clearly disagree - you are Bullish, whereas I'm Neutral to Bearish.

EVENTUALLY TIME WILL TELL WHO WAS RIGHT, BUT I'M NEITHER LONG OR SHORT ON ANY COOP DEBTS, BUT I SUSPECT YOU ARE LONG, AND ARE TRYING TO TALK-UP THE PRICE - Good Luck

[pogue] 01/2/2017 08:13

Yes it amounts to about 5% of CO OP group assets I don't see that as a reason to believe the CO OP Group will stop paying interest on their debts. Debt holders are the last to suffer and only if a company is in dire straits and has to do an LME you will notice the CO OP bank is still paying on 42RQs and will continue to do so unless the bank starts going under. For me the risk of the COOP group going under is negligible.
On deeper thought I think you are trying to look as these as shares which go up and down based on small changes in a company's profits and losses this is fixed interest debt all a holder should be worried about is if the company can pay its debts ie stay solvent all else is noise.

[ukneonboy] 31/1/2017 18:59

Regardless of your misgivings (pogue), Coop Group STILL has a financial interest in Coop Bank.

[ukneonboy] 31/1/2017 08:00

(The following statement was released by the FITCH credit rating agency) LONDON, January 30 (Fitch)


The Co-operative Bank PLC's announcement that it is unlikely to achieve capital guidance set by the UK regulator until at least 2020 highlights the difficulty of turning around troubled UK banks, particularly while interest rates remain low and the economic outlook remains uncertain, Fitch Ratings says. Low rates combined with often high restructuring costs are a particular threat to banks that are trying to re-establish themselves. Co-op Bank, in particular, is struggling to return to profitability as it is focusing on residential and buy-to-let mortgage lending, where yields are generally tight. The base rate cut in August 2016 is likely to have hit the bank's revenue generation plans, as a large portion of its legacy loan book is sensitive to falling rates. At the same time, Co-op Bank is incurring high costs to enhance its systems and procedures to increase efficiency and improve risk controls. Co-op Bank announced last week that its common equity tier 1 ratio (end-1H16: 13.4%) will fall and remain below 10% over the medium term and that it is unlikely to meet its Individual Capital Guidance, set by the UK regulator, before 2020. Co-op Bank had previously expected that this would be met by 2019. Co-op Bank's relaunch is crucial for it to become a viable business, but losses and capital erosion continue to hamper its progress. We expect Co-op Bank to report losses until at least 2017, and significant investment in new systems could extend losses into the medium term. Profitability should begin to benefit in 2018 when fair value adjustments related to the 2009 acquisition of Britannia Building Society are fully unwound. These had a large negative impact on the bank's net interest margin and profitability in 2016 and will continue to affect profitability in 2017. But a return to structural profitability depends on Co-op Bank's ability to generate new, better-quality and higher-yielding mortgage loans and to reduce operating costs, particularly through improved automation and digitalisation. Co-op Bank's funding and liquidity profiles are relatively sound. Funds are obtained largely from customer deposits, mostly retail, but also from SMEs. Primary liquidity was 12.7% of total assets at end-1H16, which is in line with the sector. In addition, the bank has significant access to contingent sources. However, we believe that access to funding and liquidity is correlated with banks' capital positions. We affirmed Co-op Bank's Long-Term IDR at 'B' in November 2016, indicating our expectation of a continued erosion of its capital through losses.

[pogue] 30/1/2017 19:57

At close of play the 42TEs are down from 130 to 126 doesn't look like the market thinks there is a major problem with the COOP group catching a cold from the bank

[ukneonboy] 30/1/2017 17:30

To be really honest I don't think it's the "writing-down" of the residual value of it's shareholding in Coop Bank that is the major issue here, it's about how much of a financial liability might potentially still fall on Coop Group if or when Coop Bank fails or has to be bailed-out again.

Glad I can watch this unfold from a safe distance though.

[spittingbarrel] 30/1/2017 16:11

The Co-Op Group wrote down the value of its holding in the Co-Op Bank by £45m to to £140m in the last interims, against Group equity of £3049m. So a further writedown to zero would only erode Group equity by 5%.

[ukneonboy] 30/1/2017 15:01

Unfortunately I don't have access to the original prospectus / listing details,dating back to December 2013 (being the date of the last restructuring) so I can't be 100% certain, so I guess the moral to the story is EVERYBODY needs to do their own "due diligence".

:-) UKNEONBOY

[pogue] 30/1/2017 13:34

I disagree I believe the coop group only have shares in the bank and the different parts of the coop group you quote are guaranteeing the coop group bonds

[ukneonboy] 30/1/2017 13:08

I think you will find that Co-operative Group Ltd was previously required to guarantee and underwrite a substantial part of Coop Bank, and I believe it was required to put-up collateral in the form of Co-operative Group Ltd trading subsidiaries, including it's supermarkets, it's funeral parlours, etc.

Thankfully I'm not personally a holder of 42TE or 42TF and I've not sold short either, so whether it survives or whether it goes under, it won't affect me.

IMHO, I genuinely do think, small shareholders of both 42TE and 42TF should be extremely cautious !!!

[montyhedge] 30/1/2017 13:05

I thought they own 25% of the bank, if the bank goes will they honour these bonds.
For a 7% yield risk/reward is crazy at 130, at 95 worth a punt.

[rob the slob] 30/1/2017 13:02

... I'm talking about 42RQ and other coop bank debt here not these 42TE

[rob the slob] 30/1/2017 13:01

"The Coop Bank apparently has sufficient capital to repay the £400 million Bond"Could there be an opportunity for early redemption through insolvency and 100% gain here?

[pogue] 30/1/2017 12:55

42TE is CO OP group debt they are wholly independent from the bank apart from owning a minority stake in it. If the bank goes bust I don't think the COOP group will as there is no other crossover. Sell (or short) to your heart's content but you are wasting money IMHO.

[montyhedge] 30/1/2017 12:50

I think Carney will pull the plug.

[ukneonboy] 30/1/2017 12:48

It certainly wont be the last time that the Coop's ill fated and ill advised acquisition of the Britannia Building Society comes back and bites them on the backside for sure.

I still remain a seller of 42TE and 42TF as this looks to be a similar basket case to the Manchester Building Society