any comments, thoughts, on this stock.

NRK staffs are apparently losing a big chunk of their pensions.

I am out of this one and will not be touching this stock ever again.

Halifax: - yes I agree some will have sold - but any remaining just go to proove that "Shareholders" aren't all bad wheeler-dealers. Some are little old ladies/gents with a small nest-egg (saved over many years) . . . . hitting them might prove difficult, politically under GB's Watch. Something the Press would like.
If GB had been the first Labour PM in years, then it's easy to blame the previous Government - - but he can't pull this stunt, especially as he started the BoE independence. That was why I suggested a sweetener for demutualisation Holders.(being a small number).

I agree also it will be difficult for any potential buyer to find the money - but not that difficult - at a Price. This begs the Q, if the Buyer gets a really Good Deal, they can afford to take a hit for a while ( maybe 4 years?), until the interest-rates improve . . . the danger being they will get worse and it will last longer . . . so the takeover price must reflect this in a discount. . . . .
My guess is that the Book-value is already maybe 10% discounted, at 1.80 - so how much lower does the Offer have to be to reflect the potential RISK and still show a profit?

. . . . . . . . Maybe that 1 suggested long ago, isn't too far wrong. . . . . .

- - For at that price, the Mortgage-Book is well-discounted and NRK Mortgagees appear to be fairly good ( as risks go), so the only groups to suffer will be the these:-

The Staff,
The shareholders
The Government ( who will have to provide a secret back-stop to get the deal going - IMHO!)
The Public (= us ) - that is, anyone that pays Tax + anyone with a Pension fund that has NRK-shares. [And as providers of Government money.]
Oh and any related NRK-loan-connected businesses, charities etc.

That is the probable Fall-out for not having a decent funding Policy in place (Management failure!), to maintain profits when interest-rates rise. . . . . last-time (in '90's), they rose to over 20% for a few months I recall - I wonder what NRK-Chief Exec would be telling Shareholders under those circumstances? - "...we're not bankrupt, yet..." - while he continued to draw a Salary that would make a thief blush.

Yet my guess is that had shareholders been made aware ( Freedom of Information, etc.) of these shortcommings, they would have been reluctant to approve the Annual Accounts and the Director's Salaries . . . .
- Which neatly brings us to the role of the FSA - in Corporate Governance review -I believe shareholders, by and large, have a more Public-Spirited view of Company-Accounts and do not like oodles of Spin and "Maybe's" still popular with many minor-Execs, of both FTSE and AIM-listed companies.


All IMHO, DYOR - the rise today provides some relief for the Brave, but I'd sold at 1.50 pity, eh?

I got rid at 1.70 and was happy to take a loss.

i was a stupid and greedy silly hbilly! ...... serves me right, but am now out having blown the profit i made on this stock

Don't worry, cynic, NRK will go back down...I am quite certain. It couldn't closed the day at 170p. It will break down soon.

Cynic, did the same. Must learn when to stop.

Northern Rock's asset quality remains good - Fitch


MUMBAI (Thomson Financial) - Fitch Ratings said Northern Rock PLC's asset
quality remains good and capitalisation sound, hence there is no fundamental
reason why coupons on hybrid capital instruments should be deferred or the
underlying instruments written down under any potential restructuring at the big
UK mortgage lender.
"Deferral triggers in such instruments are typically linked to regulatory
capital and distributable profit, neither of which ought to be under pressure
over the near-term," Fitch said.
Fitch said its view remains that a solution to Northern Rock's problems
which involves a sale of assets at materially discounted prices "is neither
necessary nor likely."
The rating agency reiterated its view that the company's problems are
funding-related, and while this is likely to feed through to earnings pressure
there remains no asset quality or solvency issues.
Northern Rock's loan book consists mainly of prime residential mortgages
that remain of good quality, broadly in line with that of its large UK mortgage
lender peers, the agency said.
TFN.newsdesk@thomson.com

NRK starting to fall back now, cynic...you were right about 160p being a big resistance. I think it will fall back to 120p soon. I really can't trust all this ratings as above as NRK was a BUY by so many brokers as the price was falling from its height of 1200p

Fund manager on Working lunch programme suggests holding on to these for the longer term ! Not convinced she is correct but then w.d.i.k.

Getting on TV sounds like a great way to stop everyone selling their shares while the fund you manage sell theirs :-)

ttt

the ordinary shareholders will get peanuts in any capital reconstruction - nrk will survive but buyers at 170p might do better at the races

May still be able to recoup some losses shorting it later..... The yanks are finally coming up with credit facilities to the Rock, wonder whats changed in the last few weeks when Northern Rock was unable to get any credit facilities forceing it to go to the BoE.... Maybe not such a bad deal after all.... Crashed out when stop loss hit at a mega low 115, the upper bracket of my 5%... Not seen the price since, definatly worth waiting for rather than try and trade the day..

people people people ..

The NRK problem is simply one of funding, i.e. how easily it can borrow money, there is nothing wrong with the bank, there is nothing wrong with the book,

The only problem here is that nowadays its difficult to borrow money, so they went to the bank of england,

remember NRK was running on 80% money market funding when the share price was 12 .. it wasnt a problem then ..

Also this credit crunch we have going is not going to last forever .. people will start lending again ... and then things go back to normal "kinda"

Now the book, the NRK book is a prime book, why the hell would anyone discount a prime book,

Problem here is that everyone has panicked .. and they have panicked good and proper .. there is panic and there is fear and when you have those you have tankage of the share price,

balugaa,

Now the book, the NRK book is a prime book, why the hell would anyone discount a prime book,


Because much of it was at long term fixes, very aggresively priced, as low as 4.69% for 15 years, and because the underwriting allowed for up to 5 times joint income and self certification to 85% LTV.
Not only is it more exposed than most to an economic downturn, but the book would not even be profitable on those rates.
As I said before though, there are areas of the book that are actually quite attractive, the question is can NRK avoid a fire sale, where the attractive bits would go cheaply and the unattractive bits would have an even bigger discount.
Alan

i think this is what is missed,

It doesnt matter how aggressively priced it is, it doesnt matter what factor of joint income you lend, the point here, is that how likely are the borrowers to default ..

that is the question, if the answer is not very likely (aka prime book) why the discount?

Now wrt economic downturn, everybank has been been lending at those levels, over the past few years, so the problem then will be a sector one not a NRK one ..

I guess the question is whether or not i would buy them, i did buy some at 3 would i top up .. hell no ..

NRK does look much much stronger over the past 1 week.

It may be a prime book, but that depends on your definition of prime!!
85% LTV self cert is not prime. 5 x joint income is not prime, and as for the rates for long term fixes, they were top of the pile for a long time, by quite a distance in some cases.
IF their is a downturn, and IF householders feel the pinch, then undoubtedly the sector will suffer, but the NRK book may be the first to be cut and probably the deepest.
After all, what would you pay for loan notes to individuals at 4.69%, when you have to collect it, risk defaults, the security is shaky and the loan was made at a very generous 5 x income? Remember, this is fixed for 15 years but if rates drop significantly, most will be repaid early, and currently you can stick your brass in ING and get 5.25%!!!
Alan