Provident Financial

What are reader's views on the prices for Provident Financial Bonds 8 % , 7% and 6% all around or under par at present.

Is PF in terminal decline or recovery material?


  • the company is worth 1.2 billion pound, this does not indicate terminal decline to me.
  • I suspect the answer is somewhere in between. They certainly have some short terms problems with the new sales model at the moment. So you are right this could be a blip and the management can sort it out in which case it is recovery material. Terminal decline sounds a little extreme but from past experience often other things crawl out of the woodwork before things start to improve . . .
  • I think they’re due to make an interim update this Friday. Suggest you wait to see if there’s further downside momentum before dipping in. As always DYOR.
  • They have taken a hammering today, don't know why.
  • Paddy

    Probably comments like this below, while not directly related to the 04/20 bond it will not help.

    "We perceive further tail risks of Provident Financial not being able to meet its October 2019 debt obligation,’ she said."
  • Morgleman2, Some good observations on the 22/8/17 link to Provident on this forum
  • just got repaid my October 2017 bond, phew! The 2019 bond is £250m, borrowing at around the current 8%+ to repay that bond will certainly make a dent in the P&L, so unless the companies performance between now and 2019 improves to the point where their cost of borrowing drops substantially, the lady at Barclays may be right. And then the 2020 bond holders (although only £75m) will be hung out to dry.
  • Anyone have any views on today's announcement and specifically how it relates to the fact the shares are up and bonds are down? Scratching my head on this one....
  • Another leg down, I think they need a rights issue to get cash, fingers crossed it should be ok in the end.
  • I suspect a good buying opportunity on "bad news" from yesterday.
    Managed to purchase a few at 87.25 giving a yield to maturity of 11.5%
    Sold my remaining holding in Ladbrokes LAD2
    Paddy, should they go for a rights issue, then bond holders will be better placed.
  • Yes, I agree a rights issue would be good news for bond holders, but if the rights issue doesn't come off then PFG is bust, that's the extra risk the bond holders are facing along with the regulatory risks.
  • Ps, the few were PF21 6% maturing Sept 2021
    sold a few on 8th Nov 2017 @ 98.45 on the basis the price was good for the risk, and that further bad news was likely to occur (they usually come in 3 lots?)
  • I suspect Neil Woodford will ensure that the PF group stays a "going concern"
  • I agree, but they will be concerned about possible regulatory losses, however I doubt if the FCA will want to sink PFG, but I think it will be on it's knees for a while.
  • Thx Paddy, brought a few myself but paid more, fortunehas favoured the brave. May I ask how you got order book access to trade ?
  • With the good news "for bond holders" perhaps this is "the time" to offload a proportion of one holdings?
    Will be reviewing the price over the next few days and perhaps buy further when the next set of "bad news" comes in.
  • I traded on YouInvest, fill or kill orders. I tried to buy some PFG7 but didn't get filled. My trades didn't show up on the LSE website, so I reckon a lot of trades don't get reported somehow.
  • Yep well done Paddy on PF and also Hind too. My comment is also about reporting of trades and where to find specific and accurate info. I traded recently largeish volumes in Intermediate Capital bonds and also late last year Helical Bar bonds with all purportedly going through the LSE. Interesting that none of these were reported on LSE official site nor on HL site with whom i transacted.! They were 'fill or kill' trades done on phone direct with the dealers and my bids/offers were filled at my target prices after a few minutes on the phone.
    Question is where can one find accurate transaction info as my gut feel is we are all a bit in the dark on this. Any help highly appreciated.( P.S. can't find much on Morning Star )
  • You are not the only ones not seeing trades being shown on LSE web-site!
  • Anyone following the mudslinging that’s been going on between Provvy and NSF? Wondering if there is a change of control put clause or make-whole clause in the retail bonds?

  • VSI, not closely, but concerned that I exited from a holding in the PF21, worried that smaller outfit could takeover a bigger operation, Newspapers suggested a few major institutional shareholders are for it. Delayed results also doesn't help. Other views would be appreciated
  • The Provi half years results of yesterday look pretty good with the resumption of paying a divi of 9p per share ( Ords ). Reasonable profits even allowing for a one off £23m defence cost for the aborted NSF takeover bid. The Ords have reacted well with a price jump of about 20p ( 4.75 % ) but the retail bonds hardly changed.
    Wondering whether to top up on a few retail bonds or am i missing the point somewhere and there are more concerns that we should be contemplating. ? Any views welcome.
  • sussexmade: Got loads of these, especially the 23s which for some reason tend to trade below par. Added more last time prices dropped. Nice yield. Happy to hold. Would buy more now if I didn't have enough already. Good luck. d
  • Thanks dandigirl, yes i noticed that-the 23's trade below par but the 20's and 21's trade above par. Not sure that's unusual for longer dated stock to behave like that as an example Burford bonds traded similarly until recently with the longer dated playing catch up only in the last couple of weeks.
    I see the fizz has run out of steam on Provi ords today with price trending lower.
    Anyway think i will take some more bonds on board least of all because there is not much else out there.!
  • They are different yields but similar yield to maturity, about 0.25% more on the 23s and would expect something like that. Personally dont like over par as turn capital into income
  • I can tolerate a small loss on capital as long as the overall YTM compensates accordingly especially on longer dated bonds.
    Anyway thanks all for your thoughts.
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