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Co-op Group 11% 2025 - half way mark

Gilts, bonds, and interest-bearing shares
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Co-op Group 11% 2025 - half way mark


Postby hiriskpaul » December 23rd, 2019, 11:20 am

Seems like only yesterday that many of us piled into Co-op Bank securities before the Bank restructuring that resulted in these Co-op Group bonds. Mark Taber (aka OldBoyReturns) somehow achieving the remarkable feat of persuading LT2 holders and the Co-op Group to bail out the more subordinated retail paper. Yet here we are half way to maturity. I have kept all the bonds issued to me and picked up a few more along the way.

In January 2014, shortly after they became tradeable, I obtained a price to sell 10k nominal of 116.25, for a yield to maturity of about 8.8%. Current price to sell 10k nominal is 124 (as of this morning), YTM 6.1%, so much of that 8.8% has been front loaded - the internal rate of return has been 10.3%.

Co-op Group, having been given a kick up the backside, are now profitable and growing their retained businesses. On a risk/reward basis I cannot see a better deal right now, so will continue to hold, despite the drop in yield.

Well done again Mark!

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