Yorkshire Building Society Reaches Redemption Date on £300 Million Senior Non-Preferred Notes

Yorkshire Building Society’s £300 million 7.375% Senior Non-Preferred Reset Notes have reached their contractual redemption date, with the mutual set to retire all of the outstanding securities at par. The notes are due to be redeemed on Saturday, Sept. 12, 2026, under a call option that was built into their terms when they were issued three years ago.

Cash settlement will not take place until Monday, Sept. 14, because the redemption date falls on a Saturday. Holders are due to receive the principal amount plus interest accrued up to, but excluding, Sept. 12. No additional interest will accrue for the period from Sept. 12 through the Monday payment date.

The securities are Series 229 under Yorkshire Building Society’s £5 billion note program and carry ISIN XS2675692664. They were issued in September 2023 with a stated maturity in September 2027, but the terms included an optional call on Sept. 12, 2026. Yorkshire Building Society listed the planned action in its Aug. 11 redemption notice, giving holders about a month of advance notice before the call date.

Redemption follows the call schedule set in 2023

The distinction between the 2026 call date and the 2027 maturity date is central to the announcement. Yorkshire Building Society is not waiting for the notes to mature next year. It is exercising the issuer call option at the first date identified in its regulatory disclosures, allowing the entire £300 million nominal issue to be repaid at 100% of face value.

The society’s 2025 Pillar 3 disclosures show an issue price of 99.733, an original issuance date of Sept. 12, 2023, a final maturity date of Sept. 12, 2027, and an optional call date one year earlier. The same table records a 7.375% coupon and a redemption price of 100. The August notice confirmed that the call would apply to all outstanding notes rather than only part of the issue.

Weekend timing changes only when holders receive the money. The contractual redemption date remains Sept. 12, but the next payment day is Monday, Sept. 14. Yorkshire Building Society specified that the intervening weekend does not create another two days of interest, so the amount payable is principal plus interest accrued only to the redemption date.

Once the redemption is completed, the notes are also set to leave the public markets. The society said their listing on the Financial Conduct Authority’s Official List and their admission to trading on the London Stock Exchange’s main market will be cancelled following redemption. The August notice was made by Yorkshire Building Society treasurer Lyndon Horwell.

The notes sat in Yorkshire Building Society’s MREL stack

The senior non-preferred label determines where these securities sit in Yorkshire Building Society’s creditor hierarchy. In its year-end 2025 regulatory disclosures, the society classified the notes as Senior Non-Preferred and recorded £309.6 million as an amount recognised in minimum requirement for own funds and eligible liabilities, or MREL, while showing no amount recognised as regulatory capital. The nominal amount remained £300 million.

Yorkshire Building Society’s disclosures also state that its senior non-preferred notes rank below senior preferred notes in normal insolvency proceedings. Senior preferred debt, in turn, ranks below obligations that receive legal priority, including retail member deposits. That position is relevant because senior non-preferred instruments are designed to provide a layer of liabilities that can absorb losses in a resolution scenario before higher-ranking creditors are reached.

The society’s 2025 disclosure further says these notes may be subject to the capital write-down tool if it is used together with a resolution tool. None of that means such a scenario is occurring here. The September event is the exercise of a scheduled contractual call, not a write-down or a distress measure, and the notes are being redeemed at par.

The redemption notice does not announce a replacement security or say that a new issue is being used to fund the repayment. The available primary-source material therefore supports describing this as the retirement of an existing senior non-preferred issue, not as a refinancing announcement.

Latest results showed ample liquidity before the call date

Yorkshire Building Society entered the second half of 2026 with a larger balance sheet and substantial reported liquidity. At June 30, the group had total assets of £67.9 billion, member shares of £53.3 billion, £8.3 billion of wholesale funding and other deposits, and £1.5 billion of subordinated liabilities. Debt securities in issue stood at £4.85 billion on the consolidated balance sheet.

Its half-year report said no wholesale issuance was undertaken during the first six months of 2026, which the society attributed to the strength of its existing liquidity position. Over the same period, it reported £530.7 million of cash redemptions of debt securities in issue. The September call falls outside that reporting period, so the £300 million repayment is not included in the first-half redemption figure.

Liquidity and capital ratios were also above the levels reported at the end of 2025. The liquidity coverage ratio was 243.3% at June 30, compared with 238.7% at Dec. 31, while the Common Equity Tier 1 ratio was 19.2%, up from 18.8%. The UK leverage ratio stood at 7.1%. Yorkshire Building Society said these measures provided significant headroom above regulatory requirements.

Those figures provide balance-sheet context for the call without establishing how the society will manage its funding after the notes disappear. Funding decisions can change after a reporting date, and the redemption notice itself contains no statement about replacement borrowing. The concrete next step is the Monday settlement: principal and accrued interest are due on Sept. 14, after which the redeemed notes and their London listing are to be cancelled.