Co-op.gp. 25 Discussion Threads

[pimsim] 12/11/2019 10:42

Once they complete the roll over of the remaining short term debt then the business should be safe (if not necessarily very profitable) for at least the next three years, i.e. even if the business continues to look fragile there is little short-term risk of financial collapse.

The bond is paying 11% with 6 years to run through to maturity in Dec 2025 so assuming the business is stable and baring any dramatic change in interest rates then I would expect the price movement between now and maturity to follow the classic shape. Gut feel says something like:

Dec 20 120-122p
Dec 21 118-120p
Dec 22 115-118p
Dec 23 112-114p
Dec 24 106-108p
Dec 25 100p

There is quite a bit of debt due to roll in 2024 so I am looking at just the next 3 year horizon and I am hoping to pick up a cumulative 33p in interest by Dec 22 for a price decline of no more than 8p i.e. yield of 6.67% at current 125p.

Now the bond is down to 6 years the duration sensitivity is becoming less important. Focus for me is to keep an eye on 6 monthly financial reports + terms of remaining debt rollover.

[finkie] 07/11/2019 11:59

Pimsim good post from a while back any further more recent thoughts, held this since the start and been a good investment price to buy today 125p so youre right will probably go down further as slightly closer to maturity in 6 months time.

[pimsim] 12/9/2019 07:39

Looks like remaining debt to be repaid in 2020 is down to £170-180m. A Significant amount (£300m) was rolled in May 2019 although sadly only for 5 years so the maturity is still ahead of 42TE.

[pimsim] 05/4/2019 16:37

Summer 2020 will be key for Co-op group - they need to roll over £500-£600m of debt before July 2020 and the terms and re-finance rates will be critical.

That said, if they can roll the debt satisfactorily for at least a further 6 years then there is nothing else o/s before these £109m 42TE bonds expire in Dec 2025 which would make them a much safer bet. If market interest rates remain flat you might be able to pick them up for around 123p in summer next year and that will be a decent 6% YTM over the remaining 5.5 years.

Just remember to always keep an eye on the Co-op bank. Although the Co-op group is now separate from the bank and no longer has any liability to cover bank losses, there is some residual risk in relation to the joint PACE pension scheme which the Co-op group might need to fund if the bank ever went bust.

[ukneonboy] 05/4/2019 09:35

I wouldn't touch any debt securities (old or new) issued by The Coop.
Too much debt within the various Coop businesses and the current Lenders have 1st dibs on the Coop's asset.

Avoid like the plague

[holts] 05/4/2019 07:54

Feasonable food sales , poor funeral , not able to get a decent rate to issue finance.

[spittingbarrel] 14/9/2018 08:20

Co-op profits soar after supermarket sells 180 pizzas for every minute of football during the World Cup

[holts] 07/4/2018 07:35

The local strategy seems to be working well despite the high prices within the stores , clearly people are fed up with town centres and out of town sheds largely because of the time taken to get there . If the one that opened near us a couple of years ago is being repeated across the country the turnround really does have legs , I am staggered by its turnover , which at its prices and therefore presumably margins must be quite profitable , although the initial capital outlay and overheads were and are high .

[psmith1110] 29/6/2017 08:13

Many thanks Pogue

[pogue] 29/6/2017 06:58

these are issued by the group not the bank. The group will only own 1% of the bank going forward so these will not be effected. The main link between the two now is the pension fund but that is getting reviewed as well. So nothing will change here unless the group gets into trouble.

[psmith1110] 28/6/2017 18:56

Forgive my ignorance but the proposed bailout does not appear to mention these. I hold a small number of what were originally the 13% Perpetual Bonds - does this mean that holders will continue to receive their 11% every December until redemption at par in 2025 or are the CoOp likely to try and stiff us again ? Any thoughts / advice would be appreciated.

[ukneonboy] 06/4/2017 17:16

I suggest you contact the Finance Director at Cooperative Group's Head Office in central Manchester.

I've Googled it, and the document is no longer being displayed or is available on line. The original paper document was a substantial A4 document when it arrived in paper form, so I am sure the Cooperative Group MUST have a copy of it, filed away.

I was originally a holder of Britannia B/Society 13% PIBS which became Cooperative Bank 13% Perpetual Bonds, following the takeover and this changed again in 2013 when the previous financial restructuring (rescue) became effective.

Happy hunting

[stemis] 06/4/2017 16:53

I have and can't. Maybe you could just post me a link?

[ukneonboy] 06/4/2017 16:37

2013 Restructuring Document can be found online just Google it
:-)

[stemis] 06/4/2017 15:35

Are you sure you have this right? The prospectus for the issue of 11 per cent. Final Repayment Subordinated Notes due 2025, issued as part of the liability management exercise of the Coop Bank identifies guarantors, but they are guarantors of the notes not of the bank.

hxxp://www.co-operativebank.co.uk/assets/pdf/bank/investorrelations/co-operative-group-limited-prospectus.pdf

There is no mention of a guarantee from Coop Group to the bank in the 2015 Report & Accounts which there would have to be if it existed.

Reading the thread I'm not sure if you have a copy of the 2013 Restructuring Document or not? If you have, can you post a link as I can't find it? If you haven't, where did you get your information?

Cheers.

[ukneonboy] 06/4/2017 13:16

The restructuring document is a thick and lengthy PDF document and it specifically states what Coop Group operating subsidiaries were offered up as collateral,and with the exception of the Coop Pharmacies, (which were subsequently sold) everything else is collateral.

Suggest you speak to the Finance Director at Coop Group's head office in central Manchester if you cant find what you are looking for.

I really hope that the rumours about Richard Branson's Virgin Money wanting to buy Coop Bank are untrue, because if it happens I'm pulling all my savings out of Virgin.

[stemis] 06/4/2017 12:59

Unless I'm looking at the wrong document I can't find any mention

[ukneonboy] 06/4/2017 12:39

Yes it's the 2013 Coop Bank Financial Restructuring document, found via Google.

[stemis] 06/4/2017 10:48

Do you have a link to the document? There doesn't seem to be anything in the Coop Group's accounts for guarantees and indemnities.

[ukneonboy] 17/2/2017 16:20

In view of the fact that the other numpty (POGUE), couldn't be bothered to provide the information from the November 2013 Coop Bank Financial Restructuring document, the actual information regarding indemnities, guarantees, sureties, etc is as follows:-

As part of the financial restructuring back in November 2013, it transpires that when the Coop Bank required it's last financial bail-out, the Cooperative Group provided various indemnities, guarantees, sureties, etc all of which were "secured" against the assets of other Coop subsidiaries including Coop Funeral Services, Coop Foods Stores inc Somerfield,Coop Group Holdings, Rochpion Properties and prior to being sold-off, the Coop Pharmacies.

The financial guarantees, indemnities, sureties, etc are still in place, at the time of posting this, and will AUTOMATICALLY be triggered if the Coop Bank goes under !!!

[ukneonboy] 15/2/2017 21:01

Incidentally Page 164 of the 2013 Restructuring document is a blank page you bell-end

wanna try giving me the correct page number ??

[ukneonboy] 15/2/2017 16:15

Yes as I said, it's definitely time for you to shut up, POGUE.

If you genuinely had the information you could have posted it easily.

It's called the COPY function and the PASTE function.

Bye Bye POGUE

[ukneonboy] 15/2/2017 14:31

& to correct a further inaccuracy in your last post, if the Bank of England's Prudential Regulatory Authority does eventually initiate a "Bail-In" to rescue the Coop Bank, existing Bondholders will AUTOMATICALLY get wiped out.

Refer back to my previous post 30 Jan 2017 (Sunday Times)

[ukneonboy] 15/2/2017 14:28

pogue where is this document that you keep banging on about and particularly page 164.

it's time to put up or shut up !!!

I'm not interested in having a debate with you - GIVE ME THE FACTS - SHOW ME THE 2013 RESTRUCTURING DOCUMENT & PARTICULARLY PAGE 164