Clydesdale delays float after ratings downgrade threat

There was embarrassment among investment bankers in Canary Wharf today after Clydesdale Bank was forced to postpone its long awaited flotation because a ratings agency threatened a possible downgrade.

Clydesdale, or CYBG as it has been renamed, was due to start trading on the stock market this morning. An initial price of 180p a share had been set which was the bottom end of the 175p to 235p range set by bankers last month.

But at the last minute the float was put back by 24 hours to tomorrow as bankers rushed to include the potential debt downgrade in the prospectus.

Clydesdale and its owner National Australia Bank have been advised by an army of bankers from Morgan Stanley, JPMorgan, Bank of America Merrill Lynch, RBC and Macquarie.

A rival banker said: “This is highly unusual. Something like a ratings change should have been on the bankers’ radar long ago.”

NAB has been trying to offload Clydesdale for several years particularly after it racked up big losses on property loans and charges for mis-selling PPI.

Initial hopes that it could get more than £2 billion for the bank have been scaled back and at 180p, which the bank said meant the share offer was “multiple times covered”, it is valued at £1.6 billion.

Only 25% of Clydesdale equity has been offered to the public with the remaining 75% given to NAB shareholders.

Elsewhere in the sector, Swiss bank UBS’s profits jumped 79% to Swfr6.2 billion (£4.2 billion) last year as it showed the benefits of slashing back its investment bank earlier than most rivals.

But a surprise outflow of funds from its wealth management arm in the fourth quarter took the gloss off the figures and the shares dropped more than 7%.