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Provident Financial debt has become interesting

Gilts, bonds, and interest-bearing shares
UncleEbenezer
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Re: Provident Financial debt has become interesting

#128930

Postby UncleEbenezer » March 29th, 2018, 11:51 pm

hiriskpaul wrote:Some unwelcome news - "Lawyers acting for Aberdeen Standard Investments, a top ten shareholder in Provident, are seeking compensation for losses due to the subprime lender's failure to disclose details of the UK Financial Conduct Authority investigation into its Vanquis Bank subsidiary, according to the newspaper."
.

So if Aberdeen were successful, who would pay compensation? Would it be anyone other than Provident Financial shareholders compensating Provident Financial shareholders?

hiriskpaul
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Re: Provident Financial debt has become interesting

#128998

Postby hiriskpaul » March 30th, 2018, 1:21 pm

UncleEbenezer wrote:
hiriskpaul wrote:Some unwelcome news - "Lawyers acting for Aberdeen Standard Investments, a top ten shareholder in Provident, are seeking compensation for losses due to the subprime lender's failure to disclose details of the UK Financial Conduct Authority investigation into its Vanquis Bank subsidiary, according to the newspaper."
.

So if Aberdeen were successful, who would pay compensation? Would it be anyone other than Provident Financial shareholders compensating Provident Financial shareholders?

If successful, Woodford, Invesco and other institutional holders will also want compensation. Private shareholders may end up footing the bill as they cannot afford to take PFG to court.

Maybe PFG will need another rights issue in order to compensate shareholders ;).

The only winners will be the lawyers.

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Re: Provident Financial debt has become interesting

#137907

Postby hiriskpaul » May 9th, 2018, 8:32 pm

Good statement today: https://www.investegate.co.uk/provident ... 00084272N/

Bonds and shares all up.

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Re: Provident Financial debt has become interesting

#141008

Postby hiriskpaul » May 24th, 2018, 4:03 pm

New senior unsecured issue £250m, 7%, 5 year term:

http://www.londonstockexchange.com/exch ... 52818.html

Allocation preference is being given to holders of the 8% 2019s as part of the tender offer. If I still held the 2019s I would take up the tender offer and subscribe for the new 7% issue. Sold mine unfortunately, but I see this as positive for the existing retail bonds as it removes a potential funding headache next year.

hiriskpaul
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Re: Provident Financial debt has become interesting

#220219

Postby hiriskpaul » May 8th, 2019, 5:12 pm

I have paid very little attention to the Provident takeover as it does nothing for bondholders, but I thought this was an interesting read:

Schroders backs Provident Financial in hostile takeover battle

https://www.ft.com/content/4c9aa0e6-70e ... 68069fbd15

I was hoping that a larger company with a bit more capital would launch a counter bid, but does not look as though that is going to happen. If the takeover fails, I just hope the Provident don't waste more management time on a bid for NSF!

Here is the letter: https://www.londonstockexchange.com/exc ... 65663.html

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Re: Provident Financial debt has become interesting

#262816

Postby hiriskpaul » November 7th, 2019, 3:48 pm


hiriskpaul
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Re: Provident Financial debt has become interesting

#292705

Postby hiriskpaul » March 20th, 2020, 3:44 pm

Very interesting yet again!

Sold 5.125% 2023 at 68 (YTM 17.5%), bought the 6% 2021 at 72.5 (YTM 29.8%).

Bought back twice as much as I sold and there is no shortage of them at 72.5.

PFG7 was available for a while at 98.5, maturing on 14 April, but price has moved to 99.65, so no longer worth it.

Good set of results were published on 16th, but largely irrelevant now. Significant uncertainty here as Provident is predominantly a sub-prime lender. I am taking a punt here that the Government will do their best to keep the customers afloat and trust Provident to prudently manage their risk. I would feel much happier if they would cancel the proposed dividend.

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Re: Provident Financial debt has become interesting

#293371

Postby 88V8 » March 23rd, 2020, 10:35 am

hiriskpaul wrote:....bought the 6% 2021 at 72.5 (YTM 29.8%).


Price varying a good deal today, but just bought a few at 73p.

V8

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Re: Provident Financial debt has become interesting

#294707

Postby 88V8 » March 27th, 2020, 10:09 am

hiriskpaul wrote: I would feel much happier if they would cancel the proposed dividend.

And now they have :)
https://www.londonstockexchange.com/exc ... 80052.html

V8

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Re: Provident Financial debt has become interesting

#294755

Postby kempiejon » March 27th, 2020, 11:40 am

88V8 wrote:
hiriskpaul wrote:....bought the 6% 2021 at 72.5 (YTM 29.8%).


Price varying a good deal today, but just bought a few at 73p.

V8


I hold some of the pfg7 maturing in a couple of weeks or so, I bought some at issuance and picked up some in the market below par and I'm tempted to switch into the pf21 but the spread is steep with HL. Perhaps I should find some new money 29% is not to be sniffed at is it. Fortune and the brave.

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Re: Provident Financial debt has become interesting

#294905

Postby 88V8 » March 27th, 2020, 6:58 pm

Yes, might buy some more, depending.

The spread is a problem with much FI. Buy & hold, on the whole.

V8

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Re: Provident Financial debt has become interesting

#299224

Postby Wizard » April 9th, 2020, 10:16 am

What is happening with the PFG7s? They are due to redeem in 5 days, but are trading at about £91.5. Had a very quick look but could not see any announcement on them.

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Re: Provident Financial debt has become interesting

#299227

Postby Wizard » April 9th, 2020, 10:23 am

Wizard wrote:What is happening with the PFG7s? They are due to redeem in 5 days, but are trading at about £91.5. Had a very quick look but could not see any announcement on them.

Looks like it may just be a glitch on HL website, it won't let me buy any :lol:

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Re: Provident Financial debt has become interesting

#313109

Postby hiriskpaul » May 28th, 2020, 5:49 pm


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Re: Provident Financial debt has become interesting

#337633

Postby roland500 » September 2nd, 2020, 12:46 pm

Agreed. Bought some more PF21s.

hiriskpaul
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Re: Provident Financial debt has become interesting

#337731

Postby hiriskpaul » September 2nd, 2020, 6:28 pm

Ouch! https://www.londonstockexchange.com/new ... 0/14665452

Bad, but not unexpected. CCD clearly the biggest headache. An interesting comment here (sub-prime safer than prime!), which I hope is not just wishful thinking:

Our customers are also typically less sensitive to changes in economic conditions as they are more used to managing on tight budgets and they have lower levels of debt than prime customers. They are, therefore, often better placed to manage a recession than prime customers which is why our businesses have proven to be resilient during a downturn in economic conditions. However, we have tightened underwriting over the last six months to manage credit risk during this period of uncertainty.


Plus points are that Provident have masses of capital (CET1 of 35%) in excess of regulatory requirements, have access to plenty of liquidity through Vanquis Bank deposits and are being prudent with lending and capital, with no proposed interim dividend. Things could get a lot worse of course, but at present it looks as though there should be little problem redeeming PF21 next year. It would make financial sense to redeem early as much cheaper funding is available via Vanquis, but PF21 is a retail bond and I suspect they will leave it until maturity.

There is a mention of the possibility of issuing some tier 2 debt, which might be an interesting investment if retail were allowed in. Would be good for the existing bonds in any case.


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