ING in trouble?

My quick and nasty 'fact file' on ING has the following:

20 October 2008: bailout

26 January 2009: bailout

Wed 18 Feb 2009: bad earnings

ING stock (NYSE listed) is down 16% this morning, which is much greater than other financials (UBS down 11%, C down 10% and BAC down 7%).

*****************

ING at record low after report on coupon payments

http://uk.reuters.com/article/bankingfinancial-SP/idUKLK32758620090220

AMSTERDAM, Feb 20 (Reuters) - Shares in Dutch financial services group ING Groep NV (ING.AS)(ING.N) fell on Friday to their lowest level ever following a newspaper report that the company might miss coupon payments on its tier 1 obligations. Paul Beijsens, analyst at Theodoor Gilissen, pointed to comments in Dutch daily Het Financieele Dagblad by the smaller Dutch Kas Bank (KASNc.AS), which said it expected ING to miss coupon payments on its hybrid tier 1 obligations.

"A lot of investors are just getting anxious and are walking away from the stock," he said.

But an ING spokeswoman said: "If we were to forego interest payments, then we would do that by giving a notice to the market immediately, and we have not done so at this moment".

ING shares were down 10.8 percent at 4.11 euros at 1142 GMT, having fallen as low as 4 euros, their lowest level ever. The DJ Stoxx European insurers index .SXIP was down 5.2 percent.

ING got state guarantees last month for 22 billion euros

($27.7 billion) of risky U.S. credit assets following a 10 billion euro capital injection from the Dutch state last year and is divesting assets to reduce risks and cope with the credit crisis, while focusing on savings and investment products.

"This is a strategic issue, and ING should communicate which way it wants to go. It is working hard on it, but the market is waiting for it," said Klaas Kruijer, analyst at Fortis Bank Netherlands.

A market source also said on Friday ING plans to issue a 5 billion euro ($6.3 billion) bond backed by the Dutch state as part of the government's credit guarantee scheme. ING said last month it would issue in total 10 billion euros in government-backed bonds

But an Amsterdam-based trader raised concerns on Friday over ING's market capitalisation, which has fallen below 10 billion euros, despite the fact the Dutch government is guaranteeing 80 percent of the company's 22 billion euros of risky U.S. credit assets.

ING declined to comment on that speculation.

The Dutch government previously nationalised the Dutch operations of Fortis and ABN AMRO in a deal that developed over the weekend, while ING's 10 billion euro capital injection last year was announced on a Sunday night.

The Finance Ministry declined to comment.
 
They are in deep trouble, leverage ratio 60 and to big to be saved by the Dutch government (1.3 trillion balance sheet).


I consider them globaly systemic.

Curious how this will play out.

They have billions of deposits in the US alone.
 
Everyone arnd here in Europe is missing T1 coupons these days, so it's not exactly a very big piece of info. Like many a European bank, they're screwed, but then what else is new.
 
Quote from m22au:

Edited:

I assume by T1 coupon that you are referring to a coupon payment on Tier 1
obligations, as per:

http://uk.reuters.com/article/bankingfinancial-SP/idUKLK32758620090220
More...
Yep, those are normally perps with non-cum coupons... You have to really stop thinking about them as bonds. They're only such for regulatory purposes (gotta love that). In reality, they're more like equity and, guess what, you ain't getting dividends on them. Moreover, deferring coupons on these T1 notes wouldn't normally constitute a default. Given all this, does this tell you a lot?
 
Thanks Martinghoul.

I found some useful information on the ING web site:

http://www.ing.com/group/showdoc.jsp?docid=353075_EN&menopt=abo|stm

ING clarifies coupon payment on hybrid capital

On Monday, February 23, 2009, ING Group confirmed that the coupons on the 7.05%, the 7.20%, the 6.375% and the 8.50% USD perpetual debt securities will be paid on 15 March 2009 as the ultimatum for giving notice on the optional deferral ended 20 February 2009.

The fact that ING will not pay a final dividend on common equity over 2008 does not mean that there will be an automatic deferral on coupon payments for hybrid capital. If ING were to defer any coupon, it is obliged to give notice to the market under the terms of the relevant prospectus. No notice has been given to the market on any coupon.

ING has issued EUR 12 billion of perpetual debt securities which are part of its tier 1 capital. In order for these to function as tier 1 capital, the coupon on the securities needs to be deferrable at will. Therefore, as per rules and regulation pertaining to hybrid capital, there can be no forward-looking statements regarding future coupon payments.

So far, ING Group has not missed a coupon on its hybrid capital.



Quote from Martinghoul:

Yep, those are normally perps with non-cum coupons... You have to really stop thinking about them as bonds. They're only such for regulatory purposes (gotta love that). In reality, they're more like equity and, guess what, you ain't getting dividends on them. Moreover, deferring coupons on these T1 notes wouldn't normally constitute a default. Given all this, does this tell you a lot?
More...
 
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