Nationwide taking £500m despite "not needing it"

baby_boomer

I think the latter, in order to keep it simple and avoid massive waste involved with 15m prospectuses. Brokers might be able to make purchases on behalf of clients - we'll have to see.

The correct term is Permanent Interest Bearing Shares.

On demutualisation they become Perpetual Subordinated Bonds.

In both cases, if the organisation gets into trouble there is no obligation to continue paying the interest/dividend and creditors are ranked after everyone else. In addition they are not easily marketable - especially in uncertain times - and the spreads mean that there is a significant loss of capital on purchase.

Plus if inflation got going, your capital value could be crucified.

Caveat Emptor.

LardyCake

I suspect you are right. However if the "rate" is going to be attractive (which presumably it will be for the issue to be a success) these might be worth considering as part of a portfolio. I note your warnings.

pistunbroke

i have a fair bit in n/wide in cash +bonds, i have now withdrawn over £50000 due to n/wide borrowing money. makes me wonder if there expecting a fall or just covering themselves while they can at cheap rate.

baby_boomer

The money makes them stronger. It doesn't have to be paid back. Savers are ahead of these investors in the queue to get their money if Nationwide ever got into trouble.

opinions4u

I think we'll find this helps the Nationwide take on the liabilities of a handful of smaller societies over the coming months.