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Lloyds Non-Cumulative Preference Shares?
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# 1
royP
Old 17-12-2009, 4:21 PM
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Default Lloyds Non-Cumulative Preference Shares?

I have a few of the Lloyds Non-Cumulative Preference Shares, which were given to me years ago.
I have just received a letter from Lloyds offering to buy @ 70p per share, should I sell or hold on, the dividend was 12.95 every 6 months but that has now come to an end due to an EU ruling.
I am not in need of the cash at the moment.
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# 2
purch
Old 17-12-2009, 6:30 PM
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The EU ruling will only stop divi's for the next couple of years.

Were you not offered the option to convert the Pref's to the new fangled ECA paper, that offers a higher coupon than the equivalent Pref which is not subject to the EU ruling ?
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# 3
royP
Old 17-12-2009, 7:00 PM
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No offer was made to convert only the cash.
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# 4
melbury
Old 17-12-2009, 7:28 PM
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I also had this letter from Lloyds today. I think I got the preference shares when Birmingham Midshires was taken over by Halifax? (or something like that).

They are offering 70p per share - does anyone know if this is a reasonable offer, bearing in mind they were only paying quite a small dividend and I think this has been stopped now.

Why do they want to buy them back?
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# 5
purch
Old 18-12-2009, 8:15 AM
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Whats the divi rate on these pref's ?
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# 6
roddydogs
Old 18-12-2009, 9:04 AM
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Ive got the same offer, and as the price at the moment is only about 50p, would seem a good deal, but wernt they worth aboput 1 each when issued? seem terribly complicated for the average person, so 400 are worth about 280 or so
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# 7
skegby73
Old 19-12-2009, 7:12 AM
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The information Lloyds have provided is so unhelpful for the average person holding these shares that it is unreal! There are three questions upon which it would be helpful to have an answer from a financial expert in order to make an informed decision about whether to sell or not:

1. Lloyds say they "expect" to be prevented from paying dividends for 2 years from 31 Jan 2010 because of European Commission negotations. That is not the same as "will" be prevented. What is the actual position?

2. What is expected to happen after the two years are up?

3. Why are Lloyds offering 70p for what used to be one pound shares before they swapped for Lloyds shares. By swapping the shares have they reduced my four hundred pound shareholding to two hundred and eighty pounds without telling me that is the case?
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# 8
kfm
Old 19-12-2009, 8:54 AM
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Quote:
Originally Posted by skegby73 View Post
1. Lloyds say they "expect" to be prevented from paying dividends for 2 years from 31 Jan 2010 because of European Commission negotations. That is not the same as "will" be prevented. What is the actual position?

2. What is expected to happen after the two years are up?

3. Why are Lloyds offering 70p for what used to be one pound shares before they swapped for Lloyds shares. By swapping the shares have they reduced my four hundred pound shareholding to two hundred and eighty pounds without telling me that is the case?
1. I believe Lloyds are not allowed to pay unless the dividends are compulsory.

2. Lloyds are free to resume dividends on preference shares.

3. Your shares aren't "worth" one pound. They most likely have a par value of one pound. They are worth whatever the market price is; if you hold the same prefs as an earlier poster, that would be around 50p in the pound.
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# 9
regg
Old 19-12-2009, 3:50 PM
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The preference share certificate I have states that each share has a liquidation preference of 1. So if Lloyds went bust, my shares would be worth more than the 70p Lloyds are "offering" now? Excuse my financial innocence but do bankers have a different interpretation of "preference" than the rest of humanity?
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# 10
dzug1
Old 19-12-2009, 4:40 PM
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Quote:
Originally Posted by regg View Post
The preference share certificate I have states that each share has a liquidation preference of 1. So if Lloyds went bust, my shares would be worth more than the 70p Lloyds are "offering" now? Excuse my financial innocence but do bankers have a different interpretation of "preference" than the rest of humanity?
Maybe.

But 'preference' in this context always means and always has meant that dividends on preference shares must be paid in preference to dividends on ordinary shares where there is conflict. Plus the liquidation preference - which doesn't mean that they would be worth more than 70p, just that paying (up to) 1 comes in advance of (certain) other debts.
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# 11
melbury
Old 19-12-2009, 5:02 PM
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I have filled in the form and I am taking the 280; the twice yearly dividend of 12 odd won't really be missed.
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# 12
pranav12
Old 19-12-2009, 7:40 PM
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I have 6.475% non cumulative preferential shares and got the same letter. If they don't pay dividends for 2 years, don't they have to pay me with shares equaling the dividend amount?
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# 13
purplelavender
Old 21-12-2009, 1:10 PM
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I have 800 shares and am trying to find some advice on whether to sell or keep ...............
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# 14
Jake'sGran
Old 21-12-2009, 6:58 PM
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Quote:
Originally Posted by purch View Post
Whats the divi rate on these pref's ?
There are about ten different ones. I have just been Googling for official articles and there was a question from one lady who held some paying over 11%. Mine are 6.475% and were allocated after the merger mentioned above. After reading the articles I mentioned I did get the impression that they might not be worth keeping. I would prefer to keep them though as I would not want the hassle of looking where to bank the money - again. Just realised, I could buy some more shares in Rexam, National Grid or something similar with a decent dividend .
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# 15
OldKingCole
Old 08-01-2010, 2:01 PM
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Having spent the last 2 weeks trying to find some practical advice on whether to keep or sell these prefs, I have come to the following conclusions;

1. No practical advice has been found

2. The original prefs with the Halifax were 1.00 shares but Lloyds replaced them with 0.25 shares

3. The current value is 53.75p

I have decided to take up the offer and sell
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# 16
purplelavender
Old 08-01-2010, 3:24 PM
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Agree - I too have searched for advice as well with no success and have decided to sell.
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# 17
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Old 08-01-2010, 7:42 PM
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If lloyds went broke I would not expect these bonds to be repaid. Likely to be similar to b&b and northern rock and they havent faired too well though some speculate this could change


As a gamble I would just hold them long term but if the money is too important then cashing in for another company as mentioned seems better off
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# 18
sidcupgooner
Old 08-06-2010, 1:50 PM
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I have some lloyds preference share and want to sell them. I don't have any info on how to do this, can anyone help?
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# 19
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Old 08-06-2010, 2:17 PM
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ITs still a share, doesnt any broker handle these or ask selftrade if you are holding a certificate
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# 20
payless
Old 08-06-2010, 2:32 PM
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many of the Halifax prefs that are held by individuals relate to B Mids takeover ( so the 6.475% series - albeit changed twice following BOS then Lloyds mergers ) .. and many people would have had these issued into a Halifax shareholder account , rather than n cetwificate - ( so already in an nominee account) who can sell them for you.
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