This PIBS was issued under the name of the Scarborough Building Society, now it's part of the Skipton Building Society: the fourth-largest in the UK, with over 750,000 members and £14.1bn of assets (mainly retail mortgages).
There are several PIBS currently available around this yield mark but in the interest of diversification in the portfolio I snapped this one up as soon as I found I could trade it electronically in one of my brokerage accounts (many PIBS must be bought by telephone) - it was listed under 'Scarborough' rather than 'Skipton'. You also need to buy at least £2,500-worth (face value, that is).
The prospectus document states that there is no maturity date, although there are arrangements for winding up the security in the worst-case scenario. It is also possible that interest payments could be stopped, under certain dire conditions.
However, the latest half-year report shows a good performance, with increasing pre-tax profits and strengthened capital ratios - plus mortgage arrears have fallen. So no major problems on the short-term horizon.
Unfortunately, this is not the best time to be buying fixed-interest securities, as there is a lot of money hunting yield at the moment. The price of this PIBS has been shooting up recently. But I am reasonably comfortable with the around 7.7% yield I will be earning on this for the foreseeable future (this is a buy-and-hold purchase).
There is a further risk, of course - the Building Society may wait for the price to sink back down and then find a way to buy these back at market price. After all, this is an expensive coupon for them, given the current low cost of capital from retail savings.
So, 'buyer beware'.
[Purchase price: £1.16]
I am not a financial adviser and the information provided does not constitute financial advice. You should always do your own research on top of what you learn here to ensure that it's right for your specific circumstances.