Clydesdale’s £1.6bn IPO delayed as downgrade looms

Clydesdale's IPO has been delayed until tomorrow. Picture: Maurice McDonald/PA

Clydesdale's IPO has been delayed until tomorrow. Picture: Maurice McDonald/PA

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The initial public offering (IPO) of Clydesdale Bank has been pushed back amid the possibility of a credit rating downgrade.

National Australia Bank (NAB) has completed its demerger of the Glasgow-based lender, but said it was delaying its flotation on the London market by a day after a ratings agency asked for “certain financial information relating to its assessment of Clydesdale Bank’s short- and/or long-term deposit rating”.

Shares in Clydesdale, which also owns the Yorkshire Bank brand, were due to begin conditional trading in London today under the CYBG banner. Trading is now expected to begin tomorrow, with the shares priced at 180p – towards the bottom end of the 175p to 235p range announced last month. That would value CYBG at about £1.6bn.

READ MORE: Clydesdale prices shares ahead of £2bn flotation

NAB said that the outcome of the ratings agency’s assessment “could be a near term downgrade of the short- and/or long-term deposit rating or the placing of such rating on credit watch with negative implications”.

It added: “CYBG does not anticipate any such downgrade to have any material impact on its ability to raise funding, the overall cost of funding, or the financial outlook for CYBG. A downgrade of the short- and/or long-term deposit rating would require Clydesdale Bank to take mitigating actions in relation to its existing secured funding programmes.”

Institutional investors are being offered a 25 per cent stake in Clydesdale through the initial public offering (IPO), with NAB shareholders holding the remaining 75 per cent. They will receive one Clydesdale share for ­every four they hold in the Melbourne-based group.

CYBG chief executive David Duffy said: “Whilst we have a very short delay in launching the IPO it is very important that we commence trading as an independent company in the best possible way. We have made excellent progress with the transaction and we have very strong interest in our story.”

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