Co-operative Bank 5.125

The Co-Op 5.125 is currently yielding just over 7% and matures in 17 months time.
Why would such a short term bond with this yield be under par at 97.4p ?

Comments

  • Minimum lot size of £50,000 nominal probably puts lots of private investors off.
    Then there are obviously many of others who feel there is a risk of bank going bust in next year and a half.

    Hopefully not as I'm a holder.

    Recent results, to me, looked OK but lots of others obviously disagree.

    http://www.fixedincomeinvestor.co.uk/x/forum.html#/discussion/320/co-op-5-125-sept-2017

  • i owned this bond prior to the fiasco. When I bought them it was in part because I believed they were an ethical organisation run with a slightly less aggressive 'banker' mentality. How wrong was I. It turned out the senior management all the way up to the Chairman were incompetent crooks. Once bitten twice shy...The price would indicate I'm not alone.
  • It's a reflection of the Credit Risk.
  • But these are senior so risk is quite well protected , seems very odd , the recent results were not encouraging in a number of respects but these have not budged .
  • I hold the Coop 2025 11% final repayment notes trading at around 118. That gives an 8.2% yield to maturity and over 9% running yield. My opinion is that the high yield on Coop generally is down to the restructuring that happened a couple of years ago and the hit that some bondholders took at the time. There are some good articles by Oliver in the archive on the subject. The restructuring plan seems to be going according to plan and I topped up my holding recently.
  • For those who maybe don't check regularly, big drop in price of longer dated Co-Op Bank sub notes (2023) so I have decided to run for the hills on these.

    Holding on to senior 2017 for time being although these also appear to be suffering pricewise at the moment.

    The above only provided for information - I often make the wrong decision so DYOR.
  • It would be good to have a bond of the week review of all the Coop bonds. The information provided a couple of years ago was very useful. Interesting to have Oliver's opinion on where they stand now, especially in light of the current yields.
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