Clydesdale Bank Perpetual (Expected Dec 2022)

The group has problems with PPI claims - www.bbc.com/news/uk-scotland-scotland-business-44123054

But they are also looking to expand - www.bbc.com/news/business-44037086

Overall, not likely to default on their bonds?

Rick, where do you get all the details from?

From the prospectus, apart from the figure for Tier-1 capital of 11.3%, which is given in the WiseAlpha marketing email

with talk of a merger today with Virgin Money that could have consequences for both notes on WiseAlpha are there any bond experts out there?

Thanks for the info - there is a Virgin money/bank perpetual bond on WiseAlpha but as it has sold out its not being shown on their market now.Its a fair point about the risk of the notes not the actual bonds carrying another level of risk but would guess without mega money most people would pay fee's of some sort on bond funds in general same as they do with S&S funds rather then individual shares but i still see it as a small punt at the moment compared to a bond fund.But fees seem a way of life unless looking at trackers/ETF  i.e one of my picks Sequoia Economic Infrastructure Income which is a loan product has a high fee but there's no way in for me otherwise.

p.s thanks for the Hovnanian link in a another thread it was a good read with my corn flakes 

If the notes serve the useful purpose of contributing to Tier-1 capital and providing a shock absorber in a crisis, then wouldn't Clydesdale want to take over the obligations (unless they can find a cheaper alternative)?

As a correction to what I surmised above: If I understand it correctly, the prospectus says that the notes would be converted into shares of the new entity, although a cash payment could be taken in lieu. cf. section 8.

8(x) says that a takeover is a qualifying relevant event which would trigger conversion. 

On the other hand, it also says:

15. SUBSTITUTION OF THE ISSUER

The Trustee may, without the consent of the Securityholders but subject to Regulatory Approval, agree with the

Issuer to the substitution in place of the Issuer (or of any previous substitute under this Condition 15) as the

principal debtor under the Securities, the Trust Deed and the Agency Agreement of any of its other whollyowned

Subsidiaries, subject to:

(a) the Trustee being satisfied that such substitution is not materially prejudicial to the interests of the

Securityholders; and

(b) certain other conditions set out in the Trust Deed being complied with.


so I am now a bit unsure.....