Taylor Wimpey Share Discussion Threads

[scars] 24/11/2010 15:41

24.6 close?

[scars] 24/11/2010 15:16

4M buy at 24!

[hiq] 24/11/2010 15:01

bad number but DJIA shrugging it off

[scars] 24/11/2010 14:54

Do you get the feeling the shorts balls are being slowly squeezed again.

You can just feel the pain.

[scars] 24/11/2010 14:41

What time are the new home sales figures out?

[scars] 24/11/2010 14:12

U.S. Unemployment claims numbers far better than expected and dow futures well up, should be good news, but then this is TW.

[scars] 24/11/2010 12:59

DOW looking like having a bit of a recovery today.

[hiq] 24/11/2010 12:59

The update and the refinancing were good news, not bad.

Credit ratings can be upped as the risks decrease.

Just be happy that we can finally call it a bottom with al the bad news (over-) priced in.

[scars] 24/11/2010 12:53

I don't think it will double bottom, to much positive news and there seems to be strong buying between 23.5 and 24.5.

[barf2] 24/11/2010 12:52

Abu

The shorters and hedgies main weapon is exploiting fear and uncertainty.By TW not responding to rumours about selling off the US arm and clarifying the position until recently[with the caveat that they might sell at some point in the future anyway]they left the question hanging of would they be able to refinance on favourable or severe terms.

This is a weak spot for shorters to target.As it is they have 'agreed' a refinance on terms whereby they have to raise £250m.Not the preferred route I'd imagine.

Until the refinancing is fully concluded many funds and institutions will hold off buying any TW stock in significant volumes.

Then it can be reassessed but until then it is subject to daily bullying.

[dealer1972] 24/11/2010 12:37

might as well wait for the double bottom at 22.5p! obvious entry point looking at the rsi as well

[abu azaan] 24/11/2010 12:28

At the very,very least they have handed the shorters and hedge funds all the ammunition they need to batter the share price

--------------------------

how?

[scars] 24/11/2010 12:25

I notice some larger quantities are going through today.

[scars] 24/11/2010 11:36

They have til now, opinion could change at any point, it is a long term play but could be rewarding.

[barf2] 24/11/2010 10:36

TW left the door open for them.

[scars] 24/11/2010 10:29

Games being played again, there is so much fear about at the moment, the big boys can do what they want and make a good profit.

[barf2] 24/11/2010 10:04

Newkid
I think they should have bitten the bullet with selling the US arm at the outset when it was first mooted.

I think that would have put a bit more stability under the share price and would have given them a stronger hand in the refinancing negotiations.Yes they would have to have accepted a price less than they wanted but the whole company has been massively devalued while they have tried to spin plates.

We now have the problem of having created a £250m debt again via the notes and have to try and sell them with a B2 rating all of which is a distraction to the business they ought to be concentrating on,and all of these financial instruments come with costs.

At the very,very least they have handed the shorters and hedge funds all the ammunition they need to batter the share price

[shaws37] 24/11/2010 09:30

SP will be deflated for......well, not looking good. :-(

[imastu pidgitaswell] 24/11/2010 09:27

I'd hate to have seen what they would have done to the share price without a refinancing...

Wonder if they will issue a Notice to Shareholders? "Dear Shareholder, sorry about the share price, sh*t happens you know. Snogs, The Board"

[barf2] 24/11/2010 08:57

Oh dear
TW back to going in the opposite direction to the rest of the sector and general market.

I don't believe they've handled all this refinancing very well at all.In order to try and hang on to North America they have jeopardised the share price and painted themselves into a corner and been bullied by the banks.They wanted to keep the cake and eat it whereas they would have been better to sell off North America in the 1st place.

I think the shorters/sellers/hedgies will continue to bully TW until it eventually does sell off North America.

[cerrito] 24/11/2010 08:26

as a holder of the 2012 notes feel a bit happier that I will get 107 rather than 105 indicated yesterday..have no real desire to get prepaid quite happy with my c 8.3% coupon..have a horrible feeling that the new notes will have a min 50,000..if not may well buy some

[barf2] 24/11/2010 07:44

Hmmm....B2

I think they might have been hoping for higher.

[spennysimmo] 24/11/2010 07:38

First-time rating

London, 24 November 2010 -- Moody's Investors Service has today assigned to Taylor Wimpey plc ("Taylor Wimpey", "the company") a first-time Corporate Family Rating (CFR) and Probability of Default Rating (PDR) of B2 with a stable outlook. Moody's has also assigned a provisional (P)B2 senior unsecured rating to the proposed GBP250 million senior unsecured notes due 2015, with a loss given default assessment of LGD4. Taylor Wimpey is a leading, publicly quoted UK homebuilder with operations in the US, Canada and Spain.

Moody's issues provisional ratings in advance of the final sale of securities and these ratings reflect Moody's preliminary credit opinion regarding the transaction only. Upon a conclusive review of the final documentation, Moody's will endeavour to assign a definitive rating to the notes. A definitive rating may differ from a provisional rating.

The notes will be issued by Taylor Wimpey plc and will be guaranteed by Taylor Wimpey UK Ltd on a shortfall basis to the extent of any shortfall on the amounts due to the noteholders after taking into account all recoveries that the noteholders receive or are entitled to receive from the issuer and any other guarantor. The guarantor(s) must own at least 90% of the gross assets of the consolidated UK business at all times. Upon completion of the current refinancing transactions, the shortfall guarantee will protect the noteholders' senior unsecured pari passu ranking to all other senior unsecured debt which will have been issued by Taylor Wimpey plc with the same shortfall guarantee, including a GBP950 million credit facility and a GBP100 million private placement fund facility at Taylor Wimpey plc. According to the company, the rationale for this shortfall guarantee is to satisfy all parties, including the UK pension trustees, that no one creditor is able to gain priority over the others by trying to enforce their claim ahead of the others. Therefore, it is Moody's understanding that the notes will represent senior unsecured obligations and rank pari passu with all other unsecured and unsubordinated debts of the issuer and the guarantor(s) (subject, in the case of the guarantee from Taylor Wimpey UK Ltd, to the aforementioned shortfall nature of such guarantee). Future incurrence of any secured financial debt by the company or the guarantor(s) that could rank in priority to the noteholders is limited (subject to certain exceptions) to a maximum of GBP50 million under the indenture save that an additional GBP100 million of such debt may be incurred in the North American subsidiaries provided there is no recourse to the issuer or its subsidiaries other than the North American Subsidiaries. No secured financial debt will be outstanding at the time of completion of the refinancing and the company does not intend to incur any further financial debt with recourse to the issuer or its subsidiaries other than on a senior unsecured basis. The instrument rating has not been notched down from the CFR at this point because, although the nature of the guarantee introduces an element of potential delay in the recovery process, the rating agency understands that senior unsecured creditors are protected by the restrictions in the documentation and by their pari passu ranking to other senior unsecured debtholders and the UK pension funds, which limit the risk of effective subordination.

Rating Rationale

Moody's says the key strengths that support the B2 rating with stable outlook are Taylor Wimpey's solid competitive position, diversity and scale, as measured by number of houses sold, total revenues and tangible net worth. The company is the second largest homebuilder in the UK by sales volume and lies in the top 10 in United States. Its operations are broadly diversified and it benefits strongly from economies of scale.

The rating is constrained by the company's poor profit performance in the recent past - it has not returned a profit in any of the past three years - which is directly related to a collapse in demand from homebuyers as mortgage lending dried up in the UK and foreclosures soared in the US. The company may have turned the corner on profitability in H1 2010 with operating margins rising and positive net income of GBP7 million; however, Moody's believes a recovery in the homebuilding industry in the UK and the US is likely to be slow and uneven.

The company's financial strength is in line with the overall rating and underpinned by its having produced positive free cash flow in all but one of the years from 2006 through 2009 and H1 2010. This was achieved by reducing inventory levels, controlling expenditure and growing margins. However, the amount of debt carried is large relative to cash flows and the three-year average FCF/adjusted debt and FFO/adjusted debt metrics for 2007-2009 are relatively weak compared to its rated peers at 2.2% and 0.8% respectively. Note that Moody's adjusts debt to include the capitalisation of any operating leases and the company's substantial pension fund deficit, which was GBP421 million at H1 2010.

The company's capital structure provides some support to the rating. The three-year (2007-2009) average leverage ratio, defined as adjusted debt/total capitalisation was 45.6%. Taylor Wimpey raised new equity in May 2009, in conjunction with renegotiating its bank debt, to strengthen the balance sheet. The company has applied new equity raised in 2009 and free cash flow towards a reduction of debt levels to improve H1 2010 leverage and financial strength metrics compared to H1 2009.

Moody's assessment of Taylor Wimpey's liquidity risk indicates a reliance on its revolving credit facilities for seasonal shifts in working capital, but the company has adequate sources of funds to meet outgoings over the next twelve months. At H1-2010 the company was in compliance with its financial bank covenants and had sufficient headroom thereunder. The current ratings and outlook assume that Taylor Wimpey will maintain an adequate liquidity profile, including ample covenant headroom at all times; they also assume a successful refinancing of all of its existing debt by year-end 2010 and that the company will address any future upcoming maturities at least twelve months in advance.

The rating's stable outlook takes into account positive developments since H2 2009, such as the company's improved gross margins and overall profitability as well as the reduction of debt levels from equity issuance and free cash flow over the past two and a half years. However, the outlook for the homebuilding industry remains uncertain, particularly in light of consumer confidence returning to a downward path in light of the cuts announced in the government's recent spending review, which will make further improvements difficult to achieve.

The current ratings and outlook assume a steady corporate state and do not factor in the impact of transforming acquisitions or any material disposals. Positive pressure on the ratings could occur if Taylor Wimpey were to improve its credit metrics with, inter alia, adjusted debt/book capitalisation to remain sustainably below 50% and interest cover (EBIT/interest expense + capitalized interest) to rise sustainably above 2.5x. Conversely, downward pressure on the ratings could arise from: (i) a failure to maintain an adequate liquidity risk profile; (ii) adjusted debt/book capitalisation to trend above 60%; or (iii) the company were to experience negative free cash flow generation for an extended period of time.

The principal methodology used in rating Taylor Wimpey was Moody's Global Homebuilding Industry rating methodology, published in March 2009 and available on www.moodys.com in the Ratings Methodology subdirectory under the Research & Ratings tab. Other methodologies and factors that may have been considered in the process of rating this issuer can also be found in the Rating Methodologies sub-directory on Moody's website.

Taylor Wimpey plc, headquartered in London, England, reported consolidated revenues and net income of GBP2.68 billion and GBP49 million respectively for the trailing twelve-month period ending 4 July 2010.