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Nationwide 10.25% CCDS

Gilts, bonds, and interest-bearing shares
Swanmore22
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Re: Nationwide 10.25% CCDS

#578535

Postby Swanmore22 » March 26th, 2023, 10:43 am

88v8
If you hold NBS, my understanding was you could tender via your broker.
To hold these you would need to be classified as professional investor status with your broker
I did not follow this up as i am holding for l/term

Swan

spencerlewis
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Re: Nationwide 10.25% CCDS

#629193

Postby spencerlewis » November 22nd, 2023, 4:49 pm

Nationwide CCDS 10.25%
Can anyone tell me if it´s possible to buy less than 250 shares?

spencerlewis
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Re: Nationwide 10.25% CCDS

#629194

Postby spencerlewis » November 22nd, 2023, 4:51 pm

Nationwide CCDS 10.25%
Can anyone tell me if it´s possible to buy less than 250 shares?

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Re: Nationwide 10.25% CCDS

#629245

Postby BondSquared » November 22nd, 2023, 7:06 pm

spencerlewis wrote:Nationwide CCDS 10.25%
Can anyone tell me if it´s possible to buy less than 250 shares?


No. Minimum denomination is 250 shares, +1 thereafter

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Re: Nationwide 10.25% CCDS

#629335

Postby BondSquared » November 23rd, 2023, 7:15 am

@Tara re the distribution cap: I see 2 reasons for its existence:

a) as rippleog already mentioned, it makes the CCDS look a bit less bond/pref like (which is important for them being recognised as capital in a Basel3 world) and more like fully discretionary equity; and
b) and somewhat contradictory to a), it leaves the door open for Nationwide to make up for missed pay-outs in cases where the PRA puts in place pay-out restrictions for banks, i.e. it allows the CCDS to be "discretionary cumulative" (=paying out >10.25% for some time after missing a 10.25% pay-out) ... very much wink wink rather than contractual, so nothing like a proper cumulative pref (which the CCDS are not allowed to mirror, formally, but are trying to, informally).

I actually don't have a problem that these CCDS trade inside the Nationwide AT1 (which on paper ranks senior). Creditor hierarchy is only relevant in a gone-concern bank failure scenario, i.e. a proper failure via bankruptcy/event of default/nationalisation/etc; but that scenario is becoming less and less relevant, and regulators around the world are doing anything to avert a hard landing/gone-concern outcome and instead opt for going-concern outcomes for bank failures, where the bank get recapitalised via bail-in (such as Credit Suisse), and AT1s have been created exactly for that purpose as bail-in capital and are first in line for going-concern bank rescues. Credit hierarchy doesn't come into play at all in going-concern bank rescues as there is nothing to distribute to creditors, there's only creditors to bail in.

These NWIDE CCDS have quickly become my largest fixed income holding at prices down to 114 (they're now ~117 offer). You will need professional investro qualification to buy them, and it doesn't hurt to tell your broker to try trading them via BMTF or Tradeweb, where they trade on 1 point bid/offer for 1mm x 1mm (rather than crossing the abysmal exchange bid/offer spread). So while they look highly illiquid at the exchange, they're far more liquid than the usual prefs/pibs/etc if your broker has good electronic off-exchange access.

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Re: Nationwide 10.25% CCDS

#629450

Postby spencerlewis » November 23rd, 2023, 3:06 pm

BondSquared wrote:
spencerlewis wrote:Nationwide CCDS 10.25%
Can anyone tell me if it´s possible to buy less than 250 shares?


No. Minimum denomination is 250 shares, +1 thereafter


Hi
It´s just that I downloaded figures on trades of NWBS CCDS from Barclays and there have been trades as low as 40 shares in the last 2 years.

Date Open Close High Low Volume
22-Dec-22 12500 12500 12550 12500 100
09-Feb-23 13100 13050 13181 13050 90
09-Mar-23 12950 12950 12950 12705 80
16.May.23 11800 11800 11800 11640 150
etc

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Re: Nationwide 10.25% CCDS

#629455

Postby BondSquared » November 23rd, 2023, 3:18 pm

spencerlewis wrote:
BondSquared wrote:
No. Minimum denomination is 250 shares, +1 thereafter


Hi
It´s just that I downloaded figures on trades of NWBS CCDS from Barclays and there have been trades as low as 40 shares in the last 2 years.

Date Open Close High Low Volume
22-Dec-22 12500 12500 12550 12500 100
09-Feb-23 13100 13050 13181 13050 90
09-Mar-23 12950 12950 12950 12705 80
16.May.23 11800 11800 11800 11640 150
etc


I spotchecked
09-Feb-23 13100 13050 13181 13050 90
and it has condition code "*X" (cancelled trade) / "PX" (Prior Day cancellation) ... I assume the others were also erroneously traded. Happens. Settlement systems will not always block trades below min denom, but someone is likely to eventually get into trouble.

In theory you can buy 251 shares and immediately sell 250, leaving you with a net of 1 share, but that's not necessarily a good idea.

spencerlewis
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Re: Nationwide 10.25% CCDS

#629460

Postby spencerlewis » November 23rd, 2023, 3:33 pm

BondSquared wrote:
spencerlewis wrote:
Hi
It´s just that I downloaded figures on trades of NWBS CCDS from Barclays and there have been trades as low as 40 shares in the last 2 years.

Date Open Close High Low Volume
22-Dec-22 12500 12500 12550 12500 100
09-Feb-23 13100 13050 13181 13050 90
09-Mar-23 12950 12950 12950 12705 80
16.May.23 11800 11800 11800 11640 150
etc


I spotchecked
09-Feb-23 13100 13050 13181 13050 90
and it has condition code "*X" (cancelled trade) / "PX" (Prior Day cancellation) ... I assume the others were also erroneously traded. Happens. Settlement systems will not always block trades below min denom, but someone is likely to eventually get into trouble.

In theory you can buy 251 shares and immediately sell 250, leaving you with a net of 1 share, but that's not necessarily a good idea.


Thanks.
that makes more sense.

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Re: Nationwide 10.25% CCDS

#635835

Postby NeilOne » December 22nd, 2023, 7:55 pm

Canaccord says these are now restricted to professionals so won't buy these for me - does anyone know of a broker who would ?

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Re: Nationwide 10.25% CCDS

#635853

Postby BondSquared » December 22nd, 2023, 9:15 pm

NeilOne wrote:Canaccord says these are now restricted to professionals so won't buy these for me - does anyone know of a broker who would ?


AJ Bell does but only if you're registered as a professional investor with them.

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Re: Nationwide 10.25% CCDS

#635880

Postby NeilOne » December 23rd, 2023, 7:52 am

Thanks, so looks like more than just a tick box form to say that one understands the risks.

AJ Bell does but only if you're registered as a professional investor with them.

spencerlewis
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Re: Nationwide 10.25% CCDS

#663958

Postby spencerlewis » May 12th, 2024, 10:46 am

So, nowhere left to buy these as a private investor?

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Re: Nationwide 10.25% CCDS

#664014

Postby Gordon51 » May 12th, 2024, 5:43 pm

spencerlewis wrote:So, nowhere left to buy these as a private investor?


Have you tried HL ? I was able to buy through them in December. Obviously that might have changed though.


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