Retail Bond Review No. 10

Transcription

28th October 2015
FTSE ORB Index
Feature Article: Bond Structuring
145
140
135
130
125
►
Jun 15
Sep 15
Mar 15
Dec 14
Jun 14
Sep 14
Mar 14
Sep 13
115
Dec 13
120
Source: FTSE
►
►
Slight recovery in the ORB
Index in Q3
One new issue during the
quarter
►
►
►
►
Analyst
Brian Moretta
020 7929 3399
bm@hardmanandco.com
For many investors the coupon, term and rating is all they look at when they buy
a bond. But each bond has a structure that affects the credit risk, and investors
need to know what that is.
The recent Wasps Finance plc issue is one of the more complicated of the recent
ORB issues. We use it as an example, highlighting some of the terms used and
what investors need to look for when assessing bond structures.
We also look at the different forms of security that investors may see, explaining
the alternative charges that may be used.
Bondholders should be aware that in the event of a windup the repayment of
proceeds from assets is not automatic.
Reflecting the growing importance of this market to both retail investors and
issuers, Hardman & Co has produced the following detailed report. This work
has been undertaken by our Financials Analyst Brian Moretta.
A range of source data for retail bonds
traded on London Stock Exchange, in
addition to further information on the
ORB market, is available at
www.londonstockexchange.com/retail-bonds
Disclaimer: Attention of readers is drawn to important disclaimers printed at the end of this document
Table of Contents
Introduction .......................................................................................................... 3
Feature Article: Bond Structuring .......................................................................... 4
Market Performance ............................................................................................. 8
Index Data Tables .................................................................................................. 8
Yield Curve ............................................................................................................ 9
New Issues .......................................................................................................... 10
Significant Economic and Market News ............................................................... 10
Glossary............................................................................................................... 12
Fixed Rate ORB Corporate Bonds........................................................................ 13
Non-Standard Corporate Bonds on ORB .............................................................. 16
Disclaimer ........................................................................................................... 17
Hardman Team .................................................................................................... 18
28th October 2015
2
Introduction
This is the tenth issue of our regular publication on the retail bond market. Its aim is
to offer a comprehensive periodic review of this growing market, as well as providing
information on the performance of this security class and a reference on individual
bonds within it. Each issue will also carry a feature article covering a topical issue.
This edition explores liquidity.
About Hardman & Co
Hardman & Co is a research company based in London which has been established
for nearly 20 years. We have a team of experienced investment analysts who provide
research that is distributed globally. Research is undertaken on quoted and private
companies as well as individual projects. We cover both equity and bond markets.
Sector expertise includes: Agriculture, Building & Construction, Business Services,
Education, Financial Services, Life Sciences, Media, Mining, Oil & Gas, Property,
Technology and Retail Bonds. Research is only one part of the suite of services which
we offer to enable investors and companies to engage with each other.
Brian Moretta, Financials Analyst
Brian has had a 20 year career in financial services, including over a decade as a fund
manager. He started as a trainee actuary, but followed that with a spell in academia,
where he completed his actuarial qualification and gained a PhD in Applied
Probability. He then joined SVM Asset Management, where he specialised in
analysing financial services companies. While there, Brian managed two traded
endowment funds and an equity fund, worked on hedge funds and the quantitative
risk management function. Since leaving SVM he has followed a pluralist lifestyle,
mixing financial/investment consulting with spells lecturing on actuarial science and
financial economics.
28th October 2015
3
Feature Article: Bond Structuring
Executive Summary
For many investors the coupon, term and rating is all they look at when they buy a
bond. But each bond has a structure that affects the credit risk, and investors need
to know what that is.
The recent Wasps Finance plc issue is one of the more complicated of the recent ORB
issues. We use it as an example, highlighting some of the terms used and what
investors need to look for when assessing bond structures. We also look at the
different forms of security that investors may see.
Introduction
The basic details of bond issues are generally well known to investors. The coupon,
term and credit rating, if available, are all some investors want to know before
making an investment decision. But there are many other factors that are important
and a diligent investor should look at as part of their decision process. The way the
bond is structured and the terms and conditions are often ignored, even though they
affect where the bond ranks in the event of a wind-up and hence the credit risk the
investor is taking.
In this article we focus on the recent ORB issue by Wasps Finance plc. Although many
of its terms were standard for ORB, it did have a slightly more complicated structure
than most other issues, though there are good reasons for that.
Its needs to be said that, as with most bonds, this is only one element of the
investment decision. In particular overall risk should always be judged against price
– for most risks there is an appropriate yield. We also note that for a business such
as Wasps there will be investors whose motivation is not entirely financial.
Bond Overview
On 14th May this year Wasps Finance plc issued a secured bond with a 6.5% coupon
maturing on 13/5/2022, giving a term of seven years. The issue was oversubscribed
and raised £35m. The bonds immediately moved to a premium and for most of its
life have traded between £102 and £103 per £100 of nominal. The bond was secured
on the Ricoh Arena in Coventry, which is now the home ground of Wasps Rugby Club,
as well shares in the rugby Premier League, known as P-Shares.
Although the company finances are not the subject of this article, there were two
financial aims of the bonds issue. One was to pay off some of the existing debt. The
other was to invest in growing the commercial opportunities of the club and getting
great utilisation of the Ricoh Arena.
28th October 2015
4
Legal Structure
The legal structure surrounding the issuing company is given in Figure 1 below. We
will use Group to denote the full collection of companies involved.
Figure 1: Legal structure of the Group
Source: Hardman & Co
The bond issuing company, Wasps Finance plc, is a specifically created Special
Purpose Vehicle (SPV). This is not an unusual structure and several other ORB issuers
have used it – for example, A2Dominion has issued two bonds using that structure.
The main alternative used on ORB is for the parent company to be the issuer, though
it can also be done through an operating subsidiary.
As is indicated above, this structure is legally somewhat more complicated that when
the parent company does the issuing. For an SPV when the bond is issued its only
significant assets are the proceeds that it receives. These have to be passed to the
company to use, but at the same time give bond holders recourse to assets in the
(hopefully unlikely) event of difficulties. As can be seen above, in this case the
resources will be passed to the operating companies in the form of a loan.
Within the Group the operations of the rugby club are in Wasps Holdings Limited
(WHL) and the Ricoh Arena business takes place in Arena Coventry Limited (ACL.)
The Arena consists of a stadium and a multi-use facility which can be used for
exhibitions, events and concerts. A subsidiary, Arena Coventry (2006) Limited
(ACL2006) deals with a casino operation. There is also a hotel and restaurant. IEC
Experience is a joint venture with Compass Group for catering.
Although not shown above, there is an additional structural layer for the bond. As is
normal, there is a Trustee for the bond. This is an independent company, in this case
U.S. Bank Trustees Limited, who handles the finances of the bond - including coupon
payments and controlling any escrow funds – as well as generally looking after
bondholders rights.
28th October 2015
5
How does the security work?
Although the three operating companies, WHL, ACL and ACL2006, act as guarantors
of the loan, though this is a secured obligation and in the event of a windup the
bondholders would have rights over designated assets. These are primarily the Ricoh
Arena for ACL and ACL2006 and P-Shares for WHL.
Looking at the detail in the prospectus shows the specific ways that these obligations
are set up:
►
Legal mortgage from the companies over their title to the Arena
►
Fixed charges over insurance held by the companies in respect of the Arena
►
►
►
►
Mortgage over the whole share capital of both companies
Fixed charge over an interest service reserve account (see below)
Floating charge over all other undertakings and assets of the three companies
plus Wasps Finance plc
Fixed charge over any proceeds from the sale of P-Shares (though not the shares
themselves)
Clearly the Arena, with a value of £48.5m1, is the most significant of these assets.
The P-Shares are valued at £5m in the WHL accounts, though the open market value
may be significantly different. Other assets are not trivial, with fixtures and fittings
for the Arena in the accounts at £5.1m. Although in aggregate these exceed the
£35m raised by the bond issue, the Group has other debts too (though some of these
were to be paid back from the funds). This is where the different charges start to
matter.
In broad terms a mortgage is more demanding than a fixed charge, which in turn is
more demanding than a floating one.
►
►
►
Mortgage: legal title is transferred to the Trustee, who has the right to sell the
assets in the event of a default.
Fixed Charge: legal title remains with the operating company, but usage is
subject to conditions which are usually designed to preserve the value of the
asset e.g. a minimum maintenance requirement. In the event of a default the
Trustee, if directed, can instruct the company to sell the asset and the
bondholders would be priority creditors for the proceeds.
Floating Charge: Similar to a fixed charge, but usually without the conditions. It
is more suitable for a changing pool of assets. On a default event the charge may
crystallise into a fixed charge, with similar priority on any sale proceeds.
It should be noted that these charges do not override other legal obligations to
creditors. So in particular, in the event of a windup expenses of the liquidation and
remuneration due to employees would rank ahead of any floating charge, but behind
the fixed charge.
So in summary the bondholders, via the trustee, have some control over the Arena
and the shares of the companies and first rights on any proceeds from the sale of
most of the assets listed above.
All figures are as given in the prospectus. Obviously they may vary over time and, in
particular, are contingent on the success of the operating companies.
1
28th October 2015
6
Bondholders should also note that in the event of a windup the Trustee will only take
action on its rights if directed, and possibly indemnified, by bondholders. If a windup
takes place then the process is not automatic, but history would suggest that support
groups usually spring up in such circumstances to help the bondholders coordinate
their actions.
Other Safety Measures
As well as the security outlined above, there are various other provisions to protect
bondholders. Many of these are common for ORB bonds, such as pledging to not
issue securities with higher ranking or maintain insurance cover. There are a couple
of specific provisions.
Interest Reserve Account
The issuer has agreed to pay an amount equal to the first three coupon payments
into a bank account and to maintain a minimum balance after each of these
payments. If it fulfils these and satisfies the covenants described below after two
years then the account may be closed.
Financial Covenants
The aim is for the value of the Arena plus the P-shares to exceed the aggregate debt
of WHL and its subsidiaries in the ratio of 1.4:1 by 30/6/2017 and for EBITDA to
exceed finance costs in the ratio of 1.5:1. In addition the consolidated senior debt of
the Group will not exceed the higher of £40m or four times a full year EBITDA.
Having financial covenants is common for many bond issues, though most recent
ORB issues do not have such restrictions. The Interest Reserve Account is slightly
unusual. The motivation seems to be that in the latest accounts both ACL and WHL
were operating at a loss. If they do not achieve the targeted profitability then
bondholders will continue to have increased security over coupon payments.
Summary
As the example shows, the structure of a bond may be quite complex. This is relevant
to investors, as it can affect their credit risk. Few investors buy a bond expecting it
to wind-up, but what would happen if it does is important to everyone involved.
28th October 2015
7
Market Performance
Figure 2: ORB Total Return Indices from inception (1/1/10=100)
160
150
140
130
120
110
FTSE ORB Index
Feb 15
Apr 15
Jun 15
Aug 15
Feb 14
Apr 14
Jun 14
Aug 14
Oct 14
Dec 14
Oct 12
Dec 12
Feb 12
Apr 12
Jun 12
Aug 12
Oct 10
Dec 10
Feb 11
Apr 11
Jun 11
Aug 11
Oct 11
Dec 11
90
Feb 13
Apr 13
Jun 13
Aug 13
Oct 13
Dec 13
100
FTSE ORB Financials Index
FTSE ORB Non-Financials Index
FTSE ORB over 5y until maturity Index
FTSE ORB under 5y until maturity Index
Source: FTSE, Hardman & Co
The 3rd quarter of 2015 saw a slight recovery in the FTSE ORB Index with a very slight
decrease in yields. Most of that recovery took place in July, with August and
September showing some daily volatility, but little net change in aggregate. Some of
the trends of the previous quarter were reversed, with longer dated bonds
outperforming shorter dated ones.
Index Data Tables
Performance & Volatility – Total Return (GBP)
Index
FTSE ORB Index
FTSE ORB under 5y until Maturity Index
FTSE ORB over 5y until Maturity Index
Index Characteristics
FTSE ORB Index
FTSE ORB under 5y until Maturity Index
FTSE ORB over 5y until Maturity Index
28th October 2015
No Issues
90
50
40
43
47
Nominal
£bn
21.90
9.93
11.97
8.27
13.63
3M
1.63
2.21
1.13
0.57
2.22
Gross redemption yield* (%)
3mths ago
now
change
3.69
3.66
-0.02
3.90
3.90
0.00
3.48
3.43
-0.05
2.65
2.82
0.17
3.88
3.80
-0.07
Performance %
1yr
2yr
5.36
12.08
6.60
14.78
4.35
10.02
3.10
6.74
6.34
14.48
Modified Duration*
3mths ago
now
6.68
6.70
7.11
7.31
6.31
6.19
2.78
2.73
8.98
8.91
4yr
34.09
47.26
25.86
18.01
40.71
change
0.02
0.20
-0.12
-0.06
-0.06
Source: FTSE, Hardman & Co
* See glossary
8
Yield Curve
Figure 3: Yield curves for bonds in the FTSE ORB Index
Gross Redemption Yield (%)
8
7
6
5
4
3
2
1
0
5
10
Term to maturity
30-Sep
15
20
30-Jun
Source: FTSE, Hardman & Co Research
The third quarter of 2015 appears to have had very little change in yields for most
durations, though this is the result of two opposing influences. To use the most
prevalent metaphor in the current market these can be characterised as “risk-off”
positioning.
With an increased demand for safe assets, gilt yields fell across most terms. There
were decreases of around 30-40bps for most terms above 3 years. Opposing that
there was a general expansion in credit spreads. For ORB these broadly balanced out
for most terms, meaning there was little change in the yield curve. The exceptions
were the two oil companies – Premier Oil and Enquest. Worries about weak oil
demand pushed yields on the bonds from both of these upwards. Enquest finished
the quarter at 14.6%, a higher level than it started the year at.
The shape of the curve is influenced by the variety of credit qualities available in the
market. Broadly in the 5-10 year range there is a much greater GRY spread,
suggesting a greater variety in credit quality. The main article in Retail Bond Review
No 2 looked at this in more detail.
28th October 2015
9
New Issues
The third quarter saw one new issue raising £112.5m. This brings the total amount
raised so far in 2015 to £394m.
New Corporate Bond Issues 01/06/15 to 30/09/15
Company
Paragon Group of
Companies
Date Listed
28 Aug 2015
Issue Size (£m)
£112.5m
Maturity Date
28 Aug 2024
Coupon
6.00%
Source: London Stock Exchange
Paragon is a specialist mortgage lender focussed on the buy-to-let market. This was
Paragon’s third bond issue on ORB, with the previous ones in January 2014 and
March 2013. In between it has increased its revolving credit facilities and sold
securitised notes, so this is clearly part of a diversified funding programme. The
company is rated BBB- by Fitch ratings.
As is normal now for ORB issues, the offer period closed early. It does seem strange
that there is clearly good demand for bonds on ORB, but supply has failed to keep
up with that.
Significant Economic and Market News
Once again, news for the last quarter has been dominated by global economic
concerns. This time it was China’s turn to worry the markets. The pace of GDP growth
has been slowing over the last few years from over 10% to the current (official) rate
of around 7%. A series of weak statistics led to concerns that this will drop lower in
the near future. With China now, depending on how it is measured, the largest or
second largest economy in the world this would have big impact on global growth.
Broadly this had two effects on markets – equity markets fell, especially emerging
markets, and high quality bond rose.
In the US there was much speculation that September would see the first rate rise
from the Federal Reserve. It didn’t happen, but Janet Yellen gave very strong hints in
a subsequent testimony that they expected to be making a move before the end of
the year, subject to economic data. Since then the latter has been somewhat mixed,
though on balance not hugely supportive of an increase and markets are now pricing
in a first move in 2016. However, there is a strand of thinking that the Federal
Reserve should be looking to normalise interest rate policy by moving away from the
zero bound, and raising that to 25bps will have no meaningful economic effect. In
short, like at most turning points, the timing of a move remains unclear.
The markets seemed ahead of the punditry in predicting no rate rise and US bond
yields fell pretty steady in July and August, with the 10 year yield going from 2.35%
to just over 2.0%. Though September was somewhat volatile, the ten year bond
finished the quarter at 2.04%.
Although Greece still managed to make headlines over the quarter, the agreement
made at the end of the second quarter meant the effect on most markets was much
reduced. Sadly for its people, although the agreement may give its creditors some
comfort, it makes it very unlikely that Greece will be able to resolve its issues. Yet
again the can has been kicked down the road.
28th October 2015
10
Meanwhile the rest of the European economies have generally continued in a slow
recovery with weak GDP growth and no inflation. Germany, benefitting from the
weak Euro that the Greek crisis has generated, has done best of the large economies
and unemployment is at 4.5%, though the Volkswagen scandal may have
repercussions.
The UK continues to outperform most of Europe economically, though inflation
remains very weak. There are few expectations of an immediate rate raise, though
there are some signs that members of the MPC would like to be able to normalise
policy. There is clearly some political pushback on elements of the new government’s
austerity plans. It may be that with a small majority it may struggle to run as tight a
policy as planned, which paradoxically may make it easier for interest rates to rise.
Gilt yields fell over the quarter, with the 10 year rate falling from 2.02% to 1.76%.
Overall 2015 is on track like for another record year for global corporate bond
issuance. As of the end of September US issuance was $1.21tn compared to $1.4tn
for the whole of 2014. A significant proportion of this has been driven by mergers
and acquisition activity. Some US companies seem to have also been trying to get
issues out ahead of any rate rise, so this may represent a short term peak. UK figures
are not quite as strong, but Bank of England statistics suggest slightly higher issuance
than 2015.
The London Stock Exchange has added a new liquidity provider status to ORB.
Market-makers can now be bid-only liquidity providers.
28th October 2015
11
Glossary
Flat (running) yield
Gross Redemption Yield
Modified Duration
28th October 2015
The interest earned expressed as a % of the price paid for the asset. Note that this
ignores the capital gain or loss inherent by buying the asset at a price greater than
or lower than the eventual redemption price (see Gross Redemption Yield).
The annual interest rate at which the present value of all future payments on a bond
equals its current price. It takes into account any capital gain/loss incurred as well as
the coupon payments.
The average time of future payments, weighted by their present value. It is a
measure of interest rate sensitivity, with higher values denoting greater sensitivity.
12
Retail Bond Review No 10
Bond Statistics as of 30th September 2015
Fixed Rate ORB Corporate Bonds (alphabetically by issuer)
Name
A2D FUNDING II PLC A2D FUND.26
A2D FUNDING PLC A2D FUND. 22
ALPHA PLUS HOLDINGS PLC ALPHA PLUS 19
ANGLIAN WATER SERVICES FINANCING PLC ANG.W.S.F.5.25%
ANGLIAN WATER SERVICES FINANCING PLC ANGLIANWTR6.875
ANHEUSER-BUSCH INBEV NV AB INBEV 6.50%
AVIVA PLC AVIVA 6.125%36£
B.A.T. INTERNATIONAL FINANCE PLC B.A.T.IF6.375%
BARCLAYS BANK PLC BARCLAYS.5.75%
BEAZLEY PLC BEAZLEY 5.375%
BRITISH TELECOMMUNICATIONS PLC BR.TEL.5.75%BDS28
BRITISH TELECOMMUNICATIONS PLC BR.TEL.8.625%
BRITISH TELECOMMUNICATIONS PLC BRIT.TEL.NTS16
BRUNTWOOD INVESTMENTS PLC BRUNTWOOD 6%
BURFORD CAPITAL PLC BURFORD 22
CLS HOLDINGS PLC CLS HDGS 19
DAILY MAIL & GENERAL TRUST PLC DMGT.5.75%18
EASTERN GROUP EAST.GP.8.5%2025
EASTERN POWER NETWORKS PLC EAST.POWER5.75%
ENQUEST PLC ENQUEST 22
ENTERPRISE INNS PLC ENTER INNS 2018
EROS INTERNATIONAL PLC EROS INT 21
EUROPEAN INVESTMENT BANK EIB 3% 2015
EUROPEAN INVESTMENT BANK EURO.I.BK.16
EUROPEAN INVESTMENT BANK EURO.IV.8.75
FIRSTGROUP PLC FIRSTGROUP6.125
GE CAPITAL UK FUNDING GE CAP.UK 18
GE CAPITAL UK FUNDING GE CAP.UK 33
GLAXOSMITHKLINE CAPITAL PLC GLAXOSMSC 5.25%
HAMMERSON PLC HAMMERSON 6%26
HAMMERSON PLC HAMMERSON 7.25%28
HAMMERSON PLC HAMMERSON6.875%
HELICAL BAR PLC HELICAL B.20
HSBC BANK PLC HSBC BK.5.375%
28th October 2015
ISIN
XS1103286305
XS0975865949
XS0853358801
XS0211684831
XS0089553282
BE6000183549
XS0138717441
XS0182188366
XS0134886067
XS0827693663
XS0097283096
XS0052067583
XS0123682758
XS0947705215
XS1088905093
XS0820711215
XS0170485204
XS0058209106
XS0187202303
XS0880578728
XS0163019143
XS1112834608
XS0497463777
XS0602217159
XS0055498413
XS0181013607
XS0381559979
XS0340495216
XS0140516864
XS0184639895
XS0085732716
XS0109514538
XS0942129957
XS0174470764
Maturity
Date
30 Sep 26
18 Oct 22
18 Dec 19
30 Oct 15
21 Aug 23
23 Jun 17
14 Nov 36
12 Dec 19
14 Sep 26
25 Sep 19
07 Dec 28
26 Mar 20
07 Dec 16
24 Jul 20
19 Aug 22
31 Dec 19
07 Dec 18
31 Mar 25
08 Mar 24
15 Feb 22
06 Dec 18
15 Oct 21
07 Dec 15
07 Dec 16
25 Aug 17
18 Jan 19
06 Aug 18
18 Jan 33
19 Dec 33
23 Feb 26
21 Apr 28
31 Mar 20
24 Jun 20
22 Aug 33
Coupon
Value
4.5
4.75
5.75
5.25
6.625
6.5
6.125
6.375
5.75
5.375
5.75
8.625
7.5
6
6.5
5.5
5.75
8.5
5.75
5.5
6.5
6.5
3
3.25
8.75
6.125
6.75
5.875
5.25
6
7.25
6.875
6
5.375
Next Coupon
Date
30 Mar 16
18 Apr 15
18 Dec 15
30 Oct 15
19 Aug 16
23 Jun 16
14 Nov 15
12 Dec 15
14 Sep 16
25 Mar 16
07 Dec 15
26 Mar 16
07 Dec 15
24 Jan 16
19 Jan 16
30 Dec 15
07 Dec 15
31 Mar 16
08 Mar 16
15 Feb 16
06 Dec 15
15 Oct 15
07 Dec 15
07 Dec 15
25 Aug 16
18 Jan 16
06 Aug 15
18 Jan 16
18 Dec 15
23 Feb 16
21 Apr 16
31 Mar 16
24 Dec 15
22 Aug 16
Period of
Coupon
6 month
6 month
6 month
12 month
12 month
12 month
12 month
12 month
12 month
6 month
12 month
12 month
12 month
6 month
6 month
6 month
12 month
12 month
12 month
6 month
6 month
6 month
12 month
12 month
12 month
12 month
12 month
12 month
6 month
12 month
12 month
12 month
6 month
12 month
Price
103.5
104.925
106.85
100.4
128.58
107.75
106.72
116.745
111.53
105.47
121.04
126.215
107.82
105
105.875
104.225
109.95
143.435
119.94
64.5
106.245
97.975
101
102.08
114.93
109.51
113.615
132.385
123.21
123.16
137.265
118.48
104.62
106.715
Flat
Yield
4.35
4.53
5.38
5.23
5.15
6.03
5.74
5.46
5.16
5.10
4.75
6.83
6.96
5.71
6.14
5.28
5.23
5.93
4.79
8.53
6.12
6.63
2.97
3.18
7.61
5.59
5.94
4.44
4.26
4.87
5.28
5.80
5.74
5.04
GRY
Duration
1.47
0.81
3.04
1.78
3.37
3.54
3.32
3.52
2.47
4.95
4.81
1.16
1.83
2.97
2.66
11.78
12.47
8.05
9.05
3.94
4.13
12.05
4.14
3.98
4.00
0.36
2.58
1.86
5.57
2.15
4.40
3.91
3.70
2.38
0.84
4.88
5.54
4.44
2.45
3.13
3.03
14.64
4.41
7.04
8.83
5.97
3.75
0.08
6.56
1.66
12.07
3.68
8.54
3.64
9.58
3.84
1.12
4.21
5.65
3.80
2.88
7.13
6.87
5.12
2.87
4.92
Liquidity
4661227
2778074
526814
2536227
99456
2938845
1214805
176301
5100815
1350744
5932898
3023423
3463445
1330022
1807308
1036223
97237
52508
89894
3401975
3833660
1477521
4935030
22731382
4257647
1453965
2058062
66946
2190560
1075170
0
25021
1465773
354486
13
Name
HSBC BANK PLC HSBC BK.6.5%NT2
ICAP PLC ICAP 5.50%
IMPERIAL TOBACCO FINANCE PLC IMP.TOB.FIN.6.25%
INTERMEDIATE CAPITAL GROUP PLC INT.CAP.GRP
INTERMEDIATE CAPITAL GROUP PLC INT.CAP.GRP20
INTERMEDIATE CAPITAL GROUP PLC INT.CAP.GRP23
INTERNATIONAL PERSONAL FINANCE PLC INTER.PERS.20
LADBROKES GROUP FINANCE PLC LADBROKES GP.22
LEGAL & GENERAL FINANCE PLC LEG&GEN.5.875%
LLOYDS BANK PLC LLOYDS BK 5.50%
LLOYDS BANK PLC LLOYDS BK. 25
LLOYDS BANK PLC LLOYDS BK.40
LLOYDS BANK PLC LLOYDS BK.9.625%
LONDON POWER NETWORKS PLC LONDON POW.27
LONDON STOCK EXCHANGE GROUP PLC LON.STK.EX21
NATIONAL GRID ELECTRICITY TRANSMISSION PLC NAT.GRID
5.875%
NATIONAL GRID ELECTRICITY TRANSMISSION PLC
NAT.GRID6.50%£
NATIONAL GRID GAS PLC NAT.GRD.G 6%
NESTLE FINANCE INTERNATIONAL LTD NESTLE FIN 23
NORTHUMBRIAN WATER FINANCE PLC NTHNBN.WTR.6%17
PARAGON GROUP OF COMPANIES PLC PARAGON GP20
PARAGON GROUP OF COMPANIES PLC PARAGON GP24
PARAGON GROUP OF COMPANIES PLC PARGN 6.125%
PLACES FOR PEOPLE CAPITAL MARKETS PLC PLACES PEO 5%
PREMIER OIL PLC PREMIER OIL20
PRIMARY HEALTH PROPERTIES PLC PRIMARY HLTH 19
PROVIDENT FINANCIAL PLC PROV.FIN 23
PROVIDENT FINANCIAL PLC PROV.FIN 7.5%
PROVIDENT FINANCIAL PLC PROV.FIN 7% 17
PROVIDENT FINANCIAL PLC PROV.FIN6%21
PROVIDENT FINANCIAL PLC PROVIDENT 7.00%
PRUDENTIAL PLC PRU.6 7/8%2023
28th October 2015
XS0088317853
XS0805454872
XS0180407602
XS0716336325
XS0818634668
XS1200576699
XS0919406800
XS1066478014
XS0121464779
XS0604804194
XS0503834821
XS0543369184
XS0043098127
XS0148889420
XS0846486040
Maturity
Date
07 Jul 23
31 Jul 18
04 Dec 18
21 Dec 18
19 Sep 20
24 Mar 23
08 May 20
16 Sep 22
11 Dec 31
25 Sep 16
22 Apr 25
17 Sep 40
06 Apr 23
07 Jun 27
02 Nov 21
Coupon
Value
6.5
5.5
6.25
7
6.25
5
6.125
5.125
5.875
5.5
7.625
6.5
9.625
6.125
4.75
Next Coupon
Date
07 Jul 16
31 Dec 15
04 Dec 15
21 Dec 15
19 Mar 16
24 Sep 15
08 Nov 15
16 Mar 16
11 Dec 15
25 Mar 16
22 Oct 15
17 Sep 16
06 Oct 15
07 Jun 16
02 Nov 15
Period of
Coupon
12 month
6 month
12 month
6 month
6 month
6 month
6 month
6 month
6 month
6 month
6 month
12 month
12 month
12 month
6 month
XS0132735373
27 Jul 28
6.5
27 Jan 16
12 month
ISIN
XS0094073672
XS0141704725
XS0860561942
XS0139335029
XS0891023086
XS1275325758
XS1018830270
XS0635014177
XS0997703250
XS0795445823
XS1209091856
XS0605672558
XS0762418993
XS0900863084
XS0496412064
XS0083544212
02 Feb 24
07 Jun 17
30 Nov 23
11 Oct 17
05 Dec 20
28 Aug 24
30 Jan 22
27 Dec 16
11 Dec 20
23 Jul 19
09 Oct 23
30 Sep 16
04 Oct 17
27 Sep 21
14 Apr 20
20 Jan 23
5.875
6
2.25
6
6
6
6.125
5
5
5.375
5.125
7.5
7
6
7
6.875
02 Feb 16
07 Jun 16
30 Nov 15
11 Oct 15
05 Mar 16
28 Feb 16
30 Dec 15
27 Dec 15
11 Dec 15
23 Jan 16
09 Oct 15
30 Mar 16
04 Oct 15
27 Mar 16
14 Apr 15
20 Jan 16
12 month
12 month
12 month
12 month
6 month
6 month
6 month
6 month
6 month
6 month
6 month
6 month
6 month
6 month
6 month
12 month
116.74
105.75
112.04
107.875
105.275
99.725
100.625
100.3
126.2
103.6
126.65
138.74
134.54
126.1
106.375
Flat
Yield
5.57
5.20
5.58
6.49
5.94
5.01
6.09
5.11
4.66
5.31
6.02
4.69
7.15
4.86
4.47
3.95
3.37
2.26
4.39
5.10
5.11
6.06
5.14
3.74
1.80
4.25
4.01
4.16
3.38
3.61
135.09
4.81
3.13
Price
123.435
107.59
100.725
108.5
102.1
101.825
102.7
103.025
80.995
103.4
101.375
103.5
105.125
105.55
108.9
126.98
4.76
5.58
2.23
5.53
5.88
5.89
5.96
4.85
6.17
5.20
5.06
7.25
6.66
5.69
6.43
5.41
GRY
Duration
Liquidity
2.69
6.78
830785
1.37
2.15
1.68
5.58
5.82
5.69
2.49
9.99
4.42
4.98
3.89
4.34
4.98
4.85
2.74
6.37
2.63
2.85
2.89
4.35
6.31
3.98
5.92
11.16
0.97
7.08
14.71
5.75
8.90
5.28
9.56
1.62
7.40
1.86
4.32
7.00
5.29
1.19
4.47
3.48
6.52
0.97
1.90
5.13
3.87
5.92
2250901
3760360
1818184
604012
1435847
4960961
3276100
2972215
71823
7256149
3501790
3388785
3276018
24301
4667806
4157675
2626378
209615
53269
1533784
NA
2606806
3368364
3745559
1485197
1599665
1306143
3160560
1005429
382748
1021800
14
Name
RETAIL CHARITY BONDS PLC RETAIL CB21
RETAIL CHARITY BONDS PLC RETAIL CB25
ROLLS-ROYCE PLC ROLLS-R 7.375%
ROYAL BANK OF SCOTLAND PLC ROY.BK.SC.20
SAFEWAY PLC SAFEWAY 6.00%
SAFEWAY PLC SAFEWAY 6.125%
SCOTTISH POWER UK PLC SCOT.PWR.UK8TE%
SEGRO PLC SEGRO 6%19
SEGRO PLC SEGRO.5.75
SEGRO PLC SEGRO.6.75
SEGRO PLC SEGRO5.50%
SEVERN TRENT UTILITIES FINANCE PLC SEVERN T.6.125%
SEVERN TRENT UTILITIES FINANCE PLC SEVERN T.6.25%BD
SMITHS GROUP PLC SMITH IND 7.25%
SSE PLC SSE.5.875%
ST.MODWEN PROPERTIES PLC ST.MODWEN 19
TESCO PERSONAL FINANCE PLC TESCO PF 5.2%
TESCO PERSONAL FINANCE PLC TESCO PF 5%
TESCO PLC TESCO 6%NT29
TESCO PLC TESCO5.50% NT19
TOYOTA MOTOR CREDIT CORPORATION TOY.MTR.17
TULLETT PREBON PLC TULLETT 5.25%
UBS AG UBS 16
UNILEVER PLC UNILEVER 4.750%
UNITE GROUP PLC UNITE GRP 20
UNITED UTILITIES WATER LIMITED UTD WTR. 5.375%
UNITED UTILITIES WATER LIMITED UTD WTR.5.625%
VODAFONE GROUP PLC VODAFONE 5.90%
28th October 2015
ISIN
XS1066485902
XS1200788369
XS0112487482
GB00B3N3WC23
XS0140144204
XS0093004736
XS0073359548
XS0179346274
XS0221324154
XS0107099466
XS0221323693
XS0094475802
XS0097777253
XS0111725049
XS0095371638
XS0841076465
XS0591029409
XS0780063235
XS0105244585
XS0159013068
XS0595707570
XS0859261520
XS0440316635
XS0434423926
XS0856594642
XS0168054673
XS0159728236
XS0158715713
Maturity
Date
29 Jul 21
30 Apr 25
14 Jun 16
01 Feb 20
10 Jan 17
17 Dec 18
20 Feb 17
30 Sep 19
20 Jun 35
23 Feb 24
20 Jun 18
26 Feb 24
07 Jun 29
30 Jun 16
22 Sep 22
07 Nov 19
24 Aug 18
21 Nov 20
14 Dec 29
13 Dec 19
07 Dec 17
11 Jun 19
20 Jul 16
16 Jun 17
12 Jun 20
14 May 18
20 Dec 27
26 Nov 32
Coupon
Value
4.375
4.4
7.375
5.1
6
6.125
8.375
6
5.75
6.75
5.5
6.125
6.25
7.25
5.875
6.25
5.2
5
6
5.5
4
5.25
6.375
4.75
6.125
5.375
5.625
5.9
Next Coupon
Date
29 Jan 16
30 Oct 15
14 Jun 16
01 Feb 16
10 Jan 16
17 Dec 15
20 Feb 16
30 Mar 16
20 Jun 16
23 Feb 16
20 Jun 16
26 Feb 16
07 Jun 16
30 Jun 16
22 Sep 16
07 Nov 15
24 Jan 16
21 Nov 15
14 Dec 15
13 Dec 15
07 Dec 15
11 Dec 15
20 Jul 16
16 Jun 16
12 Jun 15
15 May 16
20 Dec 15
26 Nov 15
Period of
Coupon
6 month
6 month
12 month
12 month
12 month
12 month
12 month
6 month
12 month
6 month
12 month
12 month
12 month
12 month
12 month
6 month
6 month
6 month
12 month
12 month
12 month
6 month
12 month
12 month
6 month
12 month
12 month
12 month
Price
101.775
100
104.16
109.895
104.665
109.695
108.91
113.525
128.12
126.45
109.605
122.75
130.655
104.15
118.875
106.15
105.395
104.775
103.93
106.85
105.75
102.95
103.93
106.01
106.475
109.37
123.215
119.13
Flat
Yield
4.30
4.40
7.08
4.64
5.73
5.58
7.69
5.29
4.49
5.34
5.02
4.99
4.78
6.96
4.94
5.89
4.93
4.77
5.77
5.15
3.78
5.10
6.13
4.48
5.75
4.92
4.57
4.95
GRY
4.07
4.45
1.39
2.65
2.21
2.90
1.75
2.44
3.71
3.16
1.83
3.01
3.41
1.62
2.85
4.64
3.25
4.00
5.59
3.70
1.30
4.42
1.41
1.15
4.63
1.67
3.29
4.30
Duration
5.16
7.77
0.71
3.89
1.21
2.89
1.30
3.63
13.03
6.73
2.56
6.78
9.99
0.75
6.00
3.60
2.71
4.52
9.59
3.72
2.06
3.35
0.80
1.65
4.09
2.46
9.16
11.29
Liquidity
117497
895122
2112694
408325
1423978
89386
155648
37957
21941
1591529
147348
57225
207869
131905
199858
1278600
2327378
5347311
1611643
2126931
20792
1961723
15014468
819905
2449198
149264
215133
7699562
15
Non-Standard Corporate Bonds on ORB (alphabetically by issuer)
Name
COVENTRY BUILDING SOCIETY
COVENTRY.6.092%
LEGAL & GENERAL GROUP PLC
LEGAL&GEN.5.875
NATIONAL GRID PLC NAT.GRID BD
21
PLACES FOR PEOPLE CAPITAL
MARKETS PLC PLACES PEO 1%
SEVERN TRENT PLC SEVERN T.22
STANDARD CHARTERED BANK
STAN.CH.BK5.375
TESCO PERSONAL FINANCE PLC
TESCO PF 1%
Next
Coupon
Date
Maturity Date
Coupon
Value
Coupon
Type
GB00B177CL57
Irredeemable
6.092
Fixed
29 Dec 15
1.25
Variable
06 Oct 15
6 month
110.98
1.13
1.3
Variable
11 Jan 16
6 month
106.73
1.22
103.13
0.97
XS0189013823
Irredeemable
5.875
XS0731910765
31 Jan 22
1
XS0678522490
XS0796078193
XS0222434200
XS0710391532
06 Oct 21
11 Jul 22
Irredeemable
16 Dec 19
5.375
1
Fixed
01 Oct 15
Variable
31 Dec 15
Fixed
14 Jul 16
Variable
16 Dec 15
Period of
Coupon
Price
6 month
101.75
Flat
Yield
(%)
ISIN
6 month
6 month
12 month
6 month
103.91
104.98
100.01
5.99
5.65
GRY
Duration
(years)
5.986
17
5.651
18
0.95
5.37
5.373
19
Liquidity
(£)
1,070,336
Note
Irredeemable
201,347
Irredeemable
1,153,536
Index-linked
6,048,869
1,535,589
1,435,600
1,604,697
Index-linked
Index-linked
Irredeemable
Index-linked
Source; London Stock Exchange, FTSE, Hardman & Co.
THIS DOCUMENT IS THE 10TH IN A SERIES ASSESSING DEVELOPMENTS IN THE ORB MARKET. IF YOU HAVE ANY TOPICS YOU WOULD LIKE HARDMAN & CO TO FOCUS ON IN THE NEXT ISSUE,
PLEASE CONTACT US ON research@hardmanandco.com.
28th October 2015
16
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Version 2 - August 2015
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1
8

Retail Bond Review No. 10

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