The Lemon Fool

I notice that HALP has recently shot up to over 180 to give a running yield of 5.18%.
NATW has also moved up but on the offer side gives a running yield of 6.57%.
By getting inside the usual fairly wide spreads it should be possible to pick up at least 1.5% in running yield by switching out of the Halifax into NatWest.
Is it worth it?
Y

yieldhog wrote:I notice that HALP has recently shot up to over 180 to give a running yield of 5.18%.
NATW has also moved up but on the offer side gives a running yield of 6.57%.
By getting inside the usual fairly wide spreads it should be possible to pick up at least 1.5% in running yield by switching out of the Halifax into NatWest.
Is it worth it?

That depends on a number of factors including whether the owner needs to pay corporation tax or CGT on any capital gain.

Fair point about the tax implications. I recently sold my HALP for an 80% long-term capital gain but since they were in my SIPP that wasn't a problem.
Y

Had lost sight of these, thanks.

I have some NATW in my ISA. Last time I looked, ii were no longer trading them online. Would sell them, but not allow buys.
Also, I was fat on Financials so not interested in adding anyway.
Last week I sold most of my bank Prefs so I have scope to buy some more. I could sell BOI to make room in my ISA, similar yield and don't entirely trust them not to try pulling a fast one again.

Perhaps ii will trade NATW by phone.
I'll see Monday.
Thankyou.

V8

Still no trade with ii, due to no KID. They say.....

I emailed Natwest Investor Relations.
Onwards.

V8

Natwest say ' ... please be aware that [these bonds] are legacy securities which do not fall within the definition of Packaged Retail and Insurance-based Investment Products (“PRIIPs”) suitable to be offered to retail investors. We have therefore deliberately not produced a Key Information Document (KID) for these bonds.'

I have replied pointing out that they will not now be converted, Prefs being non-qualifying as from 2026, so in practice they are just bonds and a KID could therefore be produced.
Too logical, I suspect.

Anyway, atm nanny gubmt will not allow us duffers to buy them.

V8

There appear to be two NatWest 11.5% issues:

NATW. Prospectus here:
https://drive.google.com/file/d/0B8hzbU ... view?hl=en

NATN. Prospectus here:
https://investors.natwestgroup.com/~/me ... 078535.pdf

Both appear to be redeemable in December 2052, or as ealy as December 2022 with the redemption price involving a 30-year Gilt Option.

Both are convertible into NatWest preference shares at the bank's option.

Prices on the Hargreaves Landsdown are 165-174 for the NATW, and 165-174 for the NATN.

Yield to 2052 at a mid market price would be 6.34% with a current yield of 6.76%
Yield to 2022 call date would only become relevant if price came down to around 110 (producing a YTC of 6.04%)

Disclosure: I don't own either of these issues.

Correction
The HL price indication for the NATW should have read 165 - 175