How sneaky is this?
Bradford & Bingley, the nationalised mortgage bank, quietly issued three statements after the market had closed on Tuesday, informing holders of three classes of notes that they would not now be getting their next due interest payment.
Affected paper:
- £150m FRN due March 2054
- £50 11.624 per cent Perpetual Subordinated Bonds
- £125m Subordinated Notes due June 2023
There’s no explanation as to why B&B won’t be paying the coupon. Remember this is now a state-owned entity, so presumably no one feels the need to keep the market properly informed.
And the market reaction? Apoplectic. The 11.625 per cent Perps, for example, collapsed from 30 to 10 on Wednesday, with the bid/offer spread standing a 5/15.
This buy-to-let basket case has a loan book running to £42bn which it is struggling to run down. For some reason other banks don’t want its customers.
Related links:
Bradford & Bingley considers asset sale – FT