Yorkshire Building Society 13.5%

I own some Yorkshire Building Society 13.5% 2025 which are currently priced at 152. I have tried to find out if the value of this Bonds is at risk with the new future rules on TIER 1 capital without success. Any information will be gratefully received

Comments

  • You describe them as bonds but I think you are referring to the Pibs. This website says, "Converts to PPDS if core tier 1 falls below 5%".

    They were mentioned in MoneyWeek (20 Dec 2013, page 16) as one of "Four Pibs to consider buying now". The article noted that Tier 1 Capital ratio is 13.7%. The article also mentioned that Pibs issued before 1 Jan this year will be excluded from regulatory capital by 2021. If the building society decides it needs to issue CCDSs in order to improve its capital position then these would suffer any losses before Pibs do, making Pibs safer.

    I'm fairly new to Pibs, having bought my first holding this week (SBSB, ie: Skipton 6.875%, since you ask) so others may have more knowledge to share than I do.
  • I would personally hold on until the YBS provides a better tender than below:-
    I think the risk has been much reduced (as per JGH comment)
    See Note Below
    16 December 2013. Yorkshire Building Society (the Society) announces today the results of its invitation to holders of its outstanding £100,000,000 13.5 per cent. Convertible Tier 2 Capital Notes due 2025 (ISIN: XS0498549194) (the Notes) to tender their Notes for purchase by the Society for cash (such invitation, the Offer).
    The Expiration Deadline for the Offer was 4.00 p.m. (London time) on 13 December 2013.
    As at the Expiration Deadline, the Society had received valid tenders for purchase of £74,308,000 in aggregate principal amount of Notes. The Purchase Price in respect of the Notes is 150 per cent. of the principal amount of such Notes. The Society has decided to accept all valid tenders of the Notes.
    The Settlement Date in respect of the Notes accepted for purchase pursuant to the Offer is expected to be 18 December 2013. Following settlement of the Offer, £25,692,000 in aggregate principal amount of the Notes will remain outstanding under the terms and conditions of the Notes.
  • JGH Thanks for the feed back. Your points about what happens to this Pib if Tier 1 capital falls below 5%, combined with the exclusion from Tier 1 of Pibs issued before Jan 2014 are my worry points (I assumed Pibs are currently counted in Tier 1). If I am correct in assuming Pibs are part of Tier1 capital is there any way to find out how much of YBS 13.7% Tier 1 capital is Pibs and therefore gaining some understanding as to the risk of fall to less than 5%.
  • shaunm Thanks for your comments. Could I ask where you saw the information about the offer in December? I was totally unaware of the invitation from YBS to buy back this Pib. In fact I must admit I have been struggling to find any info good or bad on YBS other than the semi annual and annual report. I bought my YBS Pibs through a well known broker earlier in 2013 would they have received notification of the proposed buy back?
  • shaunm and JGH, Just to round off the conversations. I talked to YBS and they told me that the 13.5% is more a COCO than a PIB as it has an end date, and is not part of the Tier 1 but would become part of Tier 1 if converted. Apparently not everyone accepted the offer and there are approx £20M still in circulation. Thanks for your help
  • The prospectus is probably the key document to read
    It is a convertible PIBS as they indicate (on conditions)
    http://www.fixedincomeinvestor.co.uk/sdoc/3560.pdf

    The Yorkshire BS is a well run organisation.
    Their Internet platform is very good for savers, much of the family's (6 accounts) surplus cash is held with them. Never been in a branch, atleast not recently
  • i am aholder of the yorkshire 13.5' having been unaware of the december tender.untill it was too late. i am quite happy to hold this pib with very little else paying 13.5 per cent. Iagree with shaunm above they seem a well run organisation and reading their recent annual reports seem to be going in the right direction. They have recently opened up new branches in yorkshire including my home town of wetherby and i am confident holding, or is that local bias as i also hold pibs in skipton and the leeds building societies.my fixed income investments are certainly outpacing my equity stocks and shares isa, plus it doesn't give me sleepless nights. quite happy to stay with pibs while the property market is moving forward again
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