Newcastle (NBSR) 12.625% PIBS

[pixieboots4]

Hello all,

I'm trying to sort out my elderly mother's financial affairs - sadly she has dementia. She has '6000 shares' in Newcastle (NBSR) 12.625% PIBS - I don't really understand what these are or what they are worth!

Hargreaves lists these as being sold @ £167 per share with a 'denomination size' of £1000, and an initial investment of £1000. I think the share price pertains to units of 100 or 1000 and not per single share obviously (as otherwise she'd be a millionaire!) - but which is it?!

I know she's had this for a long time _ I think the investment was made back in the 90s. If it's in units of a thousand, it would mean her whole investment is only worth £1,002 - which doesn't seem to quite add up?

Any ideas? Thanks so much.

[monabri]

https://en.wikipedia.org/wiki/Permanent ... ing_shares

"In finance, permanent interest bearing shares, or PIBS, are fixed-interest securities issued by building societies"

"Many PIBS were originally issued in an era of higher interest rates, and so appear attractive to investors looking for income in a world of lower interest rates."

12.625% is the fixed interest rate ("coupon" ) which should be paid to you every 6 months ( 12.625% / 2 or 6.315% every 6 months).....but...

"However, there are some disadvantages to PIBS; unlike bonds they have no fixed redemption date, so the buyer is at the mercy of the markets when they want to sell. Also, PIBS are not covered by UK government compensation schemes, interest does not 'roll up' - if a payment is missed, it is gone for good - and they rank behind depositors and other members in the event of financial distress."

I see there are some Lemons who hold these so they'll hopefully be along in a while to help!

[pixieboots4]

Thanks so much! This is beginning to make more sense now - although I still can't quite get my head around what the overall investment is worth.

Her finances are quite disorganised and she has various income coming in, so it's hard to ascertain if she is getting interest payments from it. Thanks again.

[MickR]

Hi,

It will be £167 per hundred shares. So each 1000 shares is worth £1670 and for each 1000 you would recieve an annual payment of £126.25, split over 2 payments every 6 months.

It's a bit wierd how they are shown on HL. Should really be 167p per share.

Mick

[88V8]

She has '6000 shares' in Newcastle (NBSR) 12.625% PIBS.

Unless you need to liquidate her assets, they are worth holding onto at the mo, current yield is over 7%.

V8

[GoSeigen]

It will be £167 per hundred shares.

This.

PIBS are a special class of security called deferred shares issued by UK building societies. They are NOT ordinary shares subject to the Companies Acts and they are NOT bonds. Their basic features are governed by UK building society law and associated regulations and the detailed terms are laid out in a contractual document (which people here will often refer to as a "prospectus"). Most PIBS do not entitle their holders to the same voting rights as the (other) building society members. They are required to be permanent capital for the society so you will find no redemption dates, though some are callable at the option of the issuer. Their interest payments are usually fixed and the interest is taxed as income. Directors usually have discretion as to non-payment of the interest for regulatory or capital preservation purposes. There is no CGT liability.

I don't know the detailed features of NBSR but I think they are fairly vanilla.


GS

[monabri]

So

6000 shares x £1.71 =£10.2k value approx.

https://www.londonstockexchange.com/sto ... mpany-page

Current yield for new buyer or someone looking for an alternative investment.

1/1.70 × 12.625% = 7.42%

So, you would need to find " something " with a yield of 7.42%


Where/how is the coupon being paid ?

[Rhinocol]

I hold several of these and have done so for a number of years. For your information they pay twice yearly on the 15/3 and 15/9 and you can deal in units of 1000 .