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  • FIRST POST
    • royP
    • By royP 17th Dec 09, 4:21 PM
    • 103Posts
    • 6Thanks
    royP
    Lloyds Non-Cumulative Preference Shares?
    • #1
    • 17th Dec 09, 4:21 PM
    Lloyds Non-Cumulative Preference Shares? 17th Dec 09 at 4:21 PM
    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.
Page 1
    • purch
    • By purch 17th Dec 09, 6:30 PM
    • 9,291 Posts
    • 24,143 Thanks
    purch
    • #2
    • 17th Dec 09, 6:30 PM
    • #2
    • 17th Dec 09, 6:30 PM
    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 ?
    'In nature, there are neither rewards nor punishments - there are Consequences.'
    • royP
    • By royP 17th Dec 09, 7:00 PM
    • 103 Posts
    • 6 Thanks
    royP
    • #3
    • 17th Dec 09, 7:00 PM
    • #3
    • 17th Dec 09, 7:00 PM
    No offer was made to convert only the cash.
    • melbury
    • By melbury 17th Dec 09, 7:28 PM
    • 8,511 Posts
    • 11,537 Thanks
    melbury
    • #4
    • 17th Dec 09, 7:28 PM
    • #4
    • 17th Dec 09, 7:28 PM
    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?
    Stopped smoking 27/12/2007, but could start again at any time

    • purch
    • By purch 18th Dec 09, 8:15 AM
    • 9,291 Posts
    • 24,143 Thanks
    purch
    • #5
    • 18th Dec 09, 8:15 AM
    • #5
    • 18th Dec 09, 8:15 AM
    Whats the divi rate on these pref's ?
    'In nature, there are neither rewards nor punishments - there are Consequences.'
    • roddydogs
    • By roddydogs 18th Dec 09, 9:04 AM
    • 5,650 Posts
    • 2,329 Thanks
    roddydogs
    • #6
    • 18th Dec 09, 9:04 AM
    • #6
    • 18th Dec 09, 9:04 AM
    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
  • skegby73
    • #7
    • 19th Dec 09, 7:12 AM
    • #7
    • 19th Dec 09, 7:12 AM
    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?
  • kfm
    • #8
    • 19th Dec 09, 8:54 AM
    • #8
    • 19th Dec 09, 8:54 AM
    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?
    Originally posted by skegby73
    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.
  • regg
    • #9
    • 19th Dec 09, 3:50 PM
    • #9
    • 19th Dec 09, 3:50 PM
    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?
    • dzug1
    • By dzug1 19th Dec 09, 4:40 PM
    • 13,340 Posts
    • 6,107 Thanks
    dzug1
    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?
    Originally posted by regg
    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.
    • melbury
    • By melbury 19th Dec 09, 5:02 PM
    • 8,511 Posts
    • 11,537 Thanks
    melbury
    I have filled in the form and I am taking the £280; the twice yearly dividend of £12 odd won't really be missed.
    Stopped smoking 27/12/2007, but could start again at any time

  • pranav12
    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?
    • purplelavender
    • By purplelavender 21st Dec 09, 1:10 PM
    • 57 Posts
    • 9 Thanks
    purplelavender
    I have 800 shares and am trying to find some advice on whether to sell or keep ...............
  • Jake'sGran
    Whats the divi rate on these pref's ?
    Originally posted by purch
    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 .
  • OldKingCole
    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
    • purplelavender
    • By purplelavender 8th Jan 10, 3:24 PM
    • 57 Posts
    • 9 Thanks
    purplelavender
    Agree - I too have searched for advice as well with no success and have decided to sell.
    • sabretoothtigger
    • By sabretoothtigger 8th Jan 10, 7:42 PM
    • 9,931 Posts
    • 6,562 Thanks
    sabretoothtigger
    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
    Tokyo residential prices have gone from 4x London in 1990 to ¼ London in 2014
    There is no other agency of government which can overrule actions that we take
    by Greenspan, Federal Reserve
  • sidcupgooner
    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?
    • sabretoothtigger
    • By sabretoothtigger 8th Jun 10, 2:17 PM
    • 9,931 Posts
    • 6,562 Thanks
    sabretoothtigger
    ITs still a share, doesnt any broker handle these or ask selftrade if you are holding a certificate
    Tokyo residential prices have gone from 4x London in 1990 to ¼ London in 2014
    There is no other agency of government which can overrule actions that we take
    by Greenspan, Federal Reserve
    • payless
    • By payless 8th Jun 10, 2:32 PM
    • 6,573 Posts
    • 2,335 Thanks
    payless
    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.
    Any posts on here are for information and discussion purposes only and shouldn't be seen as (financial) advice.
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