What should I do. I have Co-op bank shares, they have delisted

RoamingAndy

I bought co-op shares a couple of years ago and have no idea what I should do with them now. They have delisted cpbb.l from the sick exchange so I assume I can't sell them, and a few calls to the bank have produced no help.

I don't know much about investing and would love your advice. Thanks

bowlhead99

If you're talking about the old 9.25% pref shares in the bank - they converted into bonds in the Group.

If you did something with the paperwork back in 2013, you might have elected for one of two types of bonds. If you didn't, you would get the standard option of Final Repayment Notes.

[url]Http://www.investegate.co.uk/co-operative-bank--cpbb-/rns/notice-of-mandatory-exchange---preference-shares/201312181541279024V/[/url]

Depending when you last looked at the value of your holdings, they might be worth a lot less than the old shares were worth.

Or if you bought in during the middle of the bank's woes, they might be worth more than you paid (like mine -[smug] ).

Follow up with the co-op group registrar, details are probably on the investor relations section of the website. You may be owed some interest on your bonds (6.6% a year on the old face value)

RoamingAndy

Thanks very much for your excellent answer. I bought in the middle of their crisis, so assuming I still have them I guess they'd be with more. I was it if the country, but there was a letter about a final offer when I returned, it was so out of date and hard to read that I ignored it (was v busy at the time)

Is there any benefit to keeping them, as you are doing?

bowlhead99

RoamingAndy wrote: »

Is there any benefit to keeping them, as you are doing?

I have sold some and kept some.

Basically the old shares had a face value of a pound and traded at some multiple of that (maybe 1.20 to 1.40) because they were paying out 9p a year and interest rates were low. Then the bank got into difficulties and you might have been able to pick them up for 40-60p while it was uncertain (can't remember how low it went)

Now they have been turned into new notes, each 1000 shares got turned into into about 600 shares, paying out 11%. Those shares you might have bought for 50p are now bonds trading at 125p although of course you have less of them, so you might be 30-50% up if you bought in the 50-60p range.

Basically they are paying a regular coupon and will continue to do so until 2025 (assuming the group is still solvent) at which point they will get redeemed. You might quite like to hold them and get the ongoing payments.

Say you had 1000 shares which you paid £500-600 for. They're now 600 bonds worth £750. The bonds are paying £66 a year and will hopefully still be worth something in the future (up until they get redeemed in 2025). You can 'cash in' your stream of interest income and take the £750, or you can keep getting the income and the redemption price at the end.

Cash accounts and government bonds are not paying very much at the moment. So the yield is quite a decent thing to have. But as interest rates rise, you would expect that paying £750 for ten years of £66 plus £600 at the end becomes less attractive and the value could drop significantly. So, just because you can cash out for £750 now, doesn't mean you can always cash out for £750 in future. If the group doesn't do well, they could be worth a lot less, regardless of interest rate changes.

Whether it is worth selling out of these and buying more equities at current prices or hoarding the cash or whatever, is a pretty personal choice. There are reasons to keep them and reasons not to. But if you already made 30-50% profit or more on the capital appreciation, plus interest payments too, then you shouldn't expect to be getting growth at that rate per year going forward - the potential reward (from the bank not going under when some thought it might) has already been earned.