Paragon Banking Share Discussion Threads

[the drewster] 05/8/2009 10:47

Despite the lack of direct comparability, the fact PAG shares have stood up to the latest figures from Northern Rock show amazingly positive resilience.

PAG would often in the past have looked on enviously at Northern Rock's cost income ratio and no doubt used it as a target for its middle management to close the gap each year.

I suspect there is something afoot. The share price has risen strongly from this notoriously leaky ship, so when oh when will we find out the reasons behind it?

[the drewster] 29/7/2009 14:30

Indeed. If you have the foresight to sell 89834 at 678.73p, then a further 200,000 at 670p I'm sure you're sitting very very pretty.

When they dish out all these nil paids with absolutely no transparency of the rules under which they have "earned" them, it just grates a little.

I maintain a watching brief, though did think I could see this rise coming, so probably exacerbating my thoughts towards the management right now.

[alanrex] 29/7/2009 14:12

drewster - not disagreeing with you, but am suggesting there is upside for the management from the share price above 100p..

[the drewster] 29/7/2009 14:03

Very easy to put in when you've taken the same many times over "out" in the not too distant past, no?

[alanrex] 29/7/2009 13:49

drewster - from memory the management out in a 7 figure sum in the rights issue which i find reassuring. all imo dyor

[the drewster] 29/7/2009 13:47

I still find the management here a little too concentrated on self benefit.
Their remuneration compared to shareholder return has been wildly out of line, and now they will re-base on the lowest point possible no doubt to make further massive personal gains while the price is barely above the emergency rights issue.

[zastas] 29/7/2009 13:07

FF,

It is essentially a double discount. As long as it is not about to go bust/break covenants/unable to renew debt (EET!),much better to invest in a company with another share discount to an already depressed internal asset value.

Originally, two years ago, the NAV of QWIL was 10 pounds. We will not get back there for sure but gradually the current NAV of about 4 should rise again. The only proviso is ofcourse that not only do we have to pay something for the management- which seems very good in many eyes- but more importantly the NAV is based to some extent on some modelling, largely because many of the RMBS became ofcourse untradable.

On the other hand investing in the assets directly gives you more control and sense of ownership. The same choice all applies to property now: why buy it outright, illiquid with much transaction cost and hassle, when you can/could buy listed shares at considerable discount. Or invest at a NAV discount in lending to those property buyers through PAG! Only if you believe in an imminent property boom and you want/can again leverage up to your eyeballs with too cheap credit, direct investment could be preferable.

[future financier] 29/7/2009 09:50

zastas - is the discount you quote a "double discount" - i.e. is it a discount to the mv of the underlying rmbs - which in turn is a discount to the "face value" of the securities of say 50%. Or is it just a discount to the face value of the underlying securities?

[zastas] 28/7/2009 16:36

Interest arrears ( more than 3 months) on 1.7% of the book. In contrast BB. had about 4.5% on December 31st. It shows that Paragon has been writing much more sensibly, as well as crucially matching length of funding with mortgages, a lesson learned the hard way in the early nineties. Shame so many other 'bankers' suffered from memory loss and a lack of interest in financial history.

Investing in RMBS can be done through listed companies. EET has been taken private at 10% of NAV after a DFE by our Swedish friend , Gyllenhammer. Left are PRD and QWIL. PRD, quoted in dollars, invests in 'ultra-safe' US ones. QWIL in lower-valued ones but still trades at less than 60% NAV.

DYOR.I am biased as I own PAG,EET as well as QWIL.

[alanrex] 28/7/2009 16:28

FF, I wish!
I Know my broker was struggling to get hold of enough shares. eventually removed my limit price and told him to just get at best price for the remainder. im quite hopeful for this one. Now we've passed 100p and hopefully will consolidate the movement tomorrow once the news is digested by the big guys in their meetings and so on and following the morning press. I dont want to set expectations, and certainly hope that 120p and 150p are reached at some point!

any chartists? (i brought on fundamentals dont worry!)

all imo dyor

[phillis] 28/7/2009 16:09

£27m free cash generated in Q3!

[future financier] 28/7/2009 16:07

AR - Was that your purchase that has propelled PAG upwards?

[future financier] 28/7/2009 13:02

Thanks for explaining this AR - but I still reckon I am right about timing of PAG purchases!

[alanrex] 28/7/2009 12:46

ive brought another 5 figures of shares, hopefully tomorrow will be a good day. either way, i think that come september/october we will see these start to pull away assuming no negative surprises as people look to one year out when the worse of the econommy will hopefully be behind and the possible small opening in the secondary mortgage markets. if prices dip below 90p again i will consider another 5 figure sum investment.

all imo dyor

[alanrex] 28/7/2009 12:44

they're what the price (70p) equates to on a libor basis.

source is a broker (theyre OTC instruments as im sure you are aware). i asked a friend in credit to send them across for me. (todays)

all imo dyor

[future financier] 28/7/2009 12:36

AR - not sure what it is you have posted here - or how to interpret. The ref to Paragon 8 implies a yield of 3m LIBOR +700bps - but there are no securities in Paragon 8 that paid 700bps - even after step up. The A2b securities pay 36bps.

Can you explain how to read this ps. - and what was its source and date.

[alanrex] 28/7/2009 11:40

my guess it was probably sometime ago

[alanrex] 28/7/2009 11:38

€2.0 {MAGEL 3 A Mtge DES } Aaa/AAA 7.4yr 3mL+273-85.00 PORT RMBS
€5.4 {BCJAM 1 A Mtge DES } Aaa/AAA 2.8yr 3mL+400-90.08 SPAIN RMBS
€8.7 {TDAC 4 A Mtge DES } Aaa/AAA 4.2yr 3mL+400-85.64 SPAIN RMBS
€5.3 {ARRMF 2007-3X A3C Mtge DES } Aaa/AAA 2.9yr 3mL+550-85.71 UK RMBS
€5.0 {GRANM 2005-4 A5 Mtge DES } Aaa/AAA 3.6yr 1mL+863-75.50 UK RMBS
€5.865 {MFPLC 5X 3A1 Mtge DES } Aaa/AAA 2.5yr 3mL+650-85.24 UK RMBS
€2.0 {PARGN 8 A2B Mtge DES } Aaa/AAA 6.4yr 3mL+700-69.44 UK RMBS
$7.42 {PARGN 15A A2C Mtge DES } Aaa/AAA 6.1yr 3mL+750-68.41 UK RMBS
€3.0 {PENDE 2007-1X 4A Mtge DES } Aaa/AAA 2.4yr 3mL+650-85.86 UK RMBS
€3.0 {PERMA 4 4A Mtge DES } Aaa/AAA 0.2yr 3mL+400-99.07 UK RMBS
€6.0 {PERMA 9X 4A Mtge DES } Aaa/AAA 2.0yr 3mL+275-94.89 UK RMBS

[future financier] 28/7/2009 11:33

AR - I think not - 'cos most of the profit is going to be recognised in Q4 - so presumably done June/July.

[alanrex] 28/7/2009 11:09

i suspect they brought them back in march when bond prices were extremely depressed

[future financier] 28/7/2009 11:00

EXTRACT from statement - "the purchase of securitised bonds issued by Group companies available for prices significantly below their nominal value. To date, we have purchased GBP23.2 million nominal value of A-rated, AA-rated and AAA-rated securities at a total cost of GBP11.7 million, creating an exceptional profit of GBP11.5 million. "

Anybody know where mere mortals can buy these? - as if they can be bought for 50p in the £1 I reckon they represent about as safe a prospect for a 80% + capital gain as you will find anywhere.

[alanrex] 28/7/2009 10:55

doh, ive been hoping to double up before the rise (having sold out too early before and then buying back in !)..

oh well

[future financier] 28/7/2009 10:54

Trebles all round!

[the drewster] 28/7/2009 10:40

Yes - maybe that would trigger the board to issue themselves a humongous issue (nil paid) for getting the price back up to the emergency rights issue price?

What a jolly good job they've done.

[gconvery] 28/7/2009 09:49

Good update...let's see if it can get us through the 100p resistance....