These are five year notes (I believe non-callable). What is disturbing to me is that RBS is getting fresh capital while contemplating not paying on existing obligations. It seems to me that the EU is in favor of leaving preferred holders out in the cold. I called RBS and asked them why they are not getting with the EU and putting this deferment issue to rest. RBS IR was not at all forthcoming.
If European banks stop paying on preferreds and junior debt, it will undermine confidence. One would think banks and the EU would not want this uncertainty swirling around.
Your comment "RBS is getting fresh capital while contemplating not paying on existing obligations." is somewhat misleading....
This was an opinion from 1 debt rating service, raised as a potential risk... based on his interpretation of the EU commentary.
I do not think it would be accurate to assume that this is what RBS wanting or planning to do.
In fact, I would suggest RBS management's position would be oposite of this. They want to continue to service their Preferreds.... as evidenced by their early announcement of the Preferred dividends. (always released on a Friday excpet when a banking holiday)
Now, there is still Risk of deferrment.... but I beleive that is something that might be shoved down their throat from the EU.. but IMHO, not something RBS managment is actively pursuing.