Natwest NATW redeemed

[air04]

From my HL

National Westminster - Redemption
Your holding of 9,000 notes within your Stocks & Shares ISA

What is happening?

National Westminster have given notice that it will exercise its option to redeem the company’s notes and return cash to note holders early. As a holder of 9,000 notes in your Stocks & Shares ISA, you will be affected by the redemption.

The company will redeem all outstanding notes at an option amount yet to be determined with interest accrued up to but excluding the redemption date on 19 January 2023. The option amount will be determined on 12 January 2023.

Based on indicative prices for the Benchmark Gilt determined as at 10.00 a.m. London time on 12 December 2022, the option amount would have been 244.6 per cent of the nominal amount of the notes. Please note that the indicative price specified is for guidance only and the option amount will be announced on 12 January 2023 via the London Stock Exchange. (Source – Redemption Notice, December 2022)

[air04]

The prospectus ...
Thanks to Mark
https://drive.google.com/file/d/0B8hzbU ... oKv9gstQWw


6. Redemptio n an d Purchas e
The Notes shall be redeemable only as provided below:
(a) Early Redemption at the Bank's Option prio r to 17 December 2052
The Bank may, at any time after 17 December 2022, but before 17th December, 2052, having given
not less than 30 and not more than 45 days' notice to the Noteholders in accordance with Condition
14 (which notice shall be irrevocable) (subject to Condition 3) redeem all (but not some only) of the
Notes then outstanding by payment of all accrued interest up to but excluding the date of redemption,
all Arrears of Interest (if any) and the Option Amount. For the purpose of this Condition 6(a) the
Option Amount shall be the principal amount of the Notes, or, if higher, the price (rounded up (if
necessary) to four decimal places) at which the gross redemption yield of the Notes (as calculated on
the basis set out by the Joint Index and Classification Committee of the Institute and Faculty of
Actuaries as reported in the Journal of the Institute of Actuaries Vol. 105, Part 1, 1978, page 18, on a
semi-annual compounding basis (on the assumption that the Notes were to mature on 17 December
2052)) is equal to the gross redemption yield (as so calculated on a semi-annual compounding basis,
and rounded up (if necessary) to four decimal places) of the Benchmark Gilt on the basis of the
arithmetic average (rounded up (if necessary) to four decimal places) of the bid and offered prices
of three brokers operating in the gilt-edged market and/or gilt-edged market makers for the Benchmark
Gilt, quoted at 3.00 p.m. (London time) on the Determination Date on a dealing basis for settlement
on the following business day. For the purposes of this Condition 6(a), "Benchmark Gilt " means such
United Kingdom government security having a maturity date as near as possible to 17 December 2052
as the Trustee, with the advice of three brokers operating in the gilt-edged market and/or gilt-edged
market makers, may agree to be appropriate, and "Determination Date" means the date that is the
fifth London business day (each such day being a day, other than a Saturday or Sunday, on which banks
are open for business in London) prior to the date fixed for redemption of the Notes.

[air04]

I was wondering if anyone knows how they came up with 244.6. The RNS Link is https://www.londonstockexchange.com/new ... n/15754604.

My calculations come up with a higher number (292) for 12 Dec 2022. The closest gilt was T52 https://www.londonstockexchange.com/sto ... mpany-page

https://docs.google.com/spreadsheets/d/ ... 1286476909
Feel free to make a copy of the above

I am missing something here, I hope someone can point out the mistake in my calcs?

[88V8]

Damn.
Another contraction in the retail universe.
I suppose we were warned by that earlier tender.

244.6p... ? Seems a very fair indicative price...
Hell of a jump around that date.. leak?

V8

[hiriskpaul]

Damn.
Another contraction in the retail universe.
I suppose we were warned by that earlier tender.

244.6p... ? Seems a very fair indicative price...
Hell of a jump around that date.. leak?

V8

RNS was 12/12, same day as the price jump, so I don't think it was leaked. Not very widely anyway

[88V8]

244.6p... ? Seems a very fair indicative price...
Hell of a jump around that date.. leak?

RNS was 12/12, same day as the price jump, so I don't think it was leaked. Not very widely anyway

Looking again, maybe you're right... no RNS attached to NATW, seems a funny way to carry on.

What to do with the dosh... already have a lot of NWBD.

V8

[hiriskpaul]

244.6p... ? Seems a very fair indicative price...
Hell of a jump around that date.. leak?

RNS was 12/12, same day as the price jump, so I don't think it was leaked. Not very widely anyway

Looking again, maybe you're right... no RNS attached to NATW, seems a funny way to carry on.

What to do with the dosh... already have a lot of NWBD.

V8

Even if you wanted it, you would struggle to buy much NWBD right now. Same is true of lots of high yield prefs, PIBS and bonds.

[delburn]

I was wondering if anyone knows how they came up with 244.6. The RNS Link is ...

My calculations come up with a higher number (292) for 12 Dec 2022. The closest gilt was T52 ...

...
Feel free to make a copy of the above

I am missing something here, I hope someone can point out the mistake in my calcs?

The formula you need to use for the price is the present value of the coupons and maturity proceeds assuming a 2052 maturity date, using the yield you calculated for T52. I think Google has a "PRICE" function, or you can create a table of the cashflows.

I think the price formula you have is accumulating, rather than discounting the maturity proceeds and does not include the coupons.

[air04]

Thanks delburn. I was thinking it completely the wrong way.

After reading your post many times, and the prospectus many more times, finally understood what it meant. In my formula, I was missing out considering the 11.5% interest rate too.

It basically means, Natwest will give an amount, which (if I) put into the gilt which is maturing around 2052, I will get exactly the same yield. That is pretty good... getting the same yield moving from risk asset to zero risk asset!!! But, my cash flows will be different.

I am happy with it, but can not understand why Natwest find it useful for themselves.

[air04]

The final amount has been determined

https://www.londonstockexchange.com/new ... t/15794214

In connection with the redemption of the Notes, the Issuer announces in this notice that the final Option Amount for the purposes of Condition 6(a) (Early Redemption at the Bank's Option prior to 17 December 2052) of the trust deed dated 17 December 1992 between the Issuer and the Trustee constituting the Notes (the "Trust Deed") is 236.8605 per cent of the nominal amount of the Notes.

[88V8]

The final amount has been determined
In connection with the redemption of the Notes, the Issuer announces in this notice that the final Option Amount for the purposes of Condition 6(a) (Early Redemption at the Bank's Option prior to 17 December 2052) of the trust deed dated 17 December 1992 between the Issuer and the Trustee constituting the Notes (the "Trust Deed") is 236.8605 per cent of the nominal amount of the Notes.

Market value... good precedent...

But not a peep from ii.
Hmmm

V8

[air04]

But not a peep from ii.

I have not heard from HL too. I was inquisitive, and so checked the RNS on https://www.londonstockexchange.com/sto ... mpany-page The bonds will be redeemed on 19th as per the initial RNS. HL will then probably let me know.

[Zow1]

Hi.

Anyone heard anything about this redemption from their brokers?
Settlement was supposed to be yesterday, i believe?
Nothing yet from iDealing where i hold some.

[88V8]

Anyone heard anything about this redemption from their brokers?
Settlement was supposed to be yesterday, i believe?
Nothing yet from iDealing where i hold some.

I have the dosh from ii, who as usual are very quick in settlement. I did have a pop at them this morning for not giving a heads-up though. I imagine their customers who do not have the good fortune to read the Lemon will have been somewhat surprised.

V8

[Zow1]

Cash is now credited to my account at iDealing this afternoon (fri 21/1)

[BondSquared]

Anyone else out there who has been credited with the final accrued interest/coupon for NATW but not NATN? I've received the redemption amounts for both but accrued (as a separate payment) only for NATW. Likely due to NATN held in Euroclear, with NATW in Crest. Not a huge amount (0.99%) but annoying that UK brokers are still struggling with handling securities held outside the domestic retail settlement/custodial systems. Can anyone recommend a retail broker who can spell Euroclear? Payment was made for value 19 Jan, so is now almost 2 weeks overdue.

[BondSquared]

Anyone else out there who has been credited with the final accrued interest/coupon for NATW but not NATN? I've received the redemption amounts for both but accrued (as a separate payment) only for NATW. Likely due to NATN held in Euroclear, with NATW in Crest. Not a huge amount (0.99%) but annoying that UK brokers are still struggling with handling securities held outside the domestic retail settlement/custodial systems. Can anyone recommend a retail broker who can spell Euroclear? Payment was made for value 19 Jan, so is now almost 2 weeks overdue.

and even on the single payment for the final coupon they messed up the accrued calculation ... it's 1.022%