HBOS Preference Shares - what to do with them

guygamps

Hi, the executors of my late mothers estate have a share portfolio which due to the current market conditions is not being sold. The beneficiarys have all agreed to leave as is hoping the value will return in time to the probate value. Some of these shares are Preference Shares with HBOS.

What is the difference between ordinary and preference shares?

What will happen to these shares when/if the Lloyds TSB merger goes ahead? will these shares novate to new shares in the merged bank?

At date of my mother passing away (Aug 07) they were worth about £9 each, by Nov 07 the Northern Rock crisis had resulted in bank stocks beginninng to fall, no one knew how bad it was going to get or maybe we would have sold the shares then... now I think they last traded ast 70p each.

Guy

digerati

guygamps wrote: »

What is the difference between ordinary and preference shares?

What will happen to these shares when/if the Lloyds TSB merger goes ahead? will these shares novate to new shares in the merged bank?

The difference between HBOS ordinary and preference shares is the preference ones get paid a certain dividend i.e. 9 1/4%, 6.413% per annum, and they also rank ahead of ordinary shares in event of nationalization. Under the terms of the Lloyds TSB merger, all HBOS preference shares are converted into Lloyds TSB preference shares in a ratio of 1:1.

Hang on to them as they will be the first to recover when the banking sector bounces back.

purch

They will now be called Lloyds Banking Group Preference Shares....

So far throughout the 'crisis' all UK Banking Prefs have paid their dividend.

fbrj

guygamps wrote: »

Hi, the executors of my late mothers estate have a share portfolio which due to the current market conditions is not being sold. The beneficiarys have all agreed to leave as is hoping the value will return in time to the probate value. Some of these shares are Preference Shares with HBOS.

What is the difference between ordinary and preference shares?

What will happen to these shares when/if the Lloyds TSB merger goes ahead? will these shares novate to new shares in the merged bank?

At date of my mother passing away (Aug 07) they were worth about £9 each, by Nov 07 the Northern Rock crisis had resulted in bank stocks beginninng to fall, no one knew how bad it was going to get or maybe we would have sold the shares then... now I think they last traded ast 70p each.

Guy

I am not 100% clear whether you mean HBOS ordinary shares or Preference shares. The Preference shares could never have been £9 each. You mention figures of £9 and 70p and so I think you must mean the Ordinary shares which collapsed from a high of £11.50 to about 70p. All classes of HBOS shares (whether Ord or Pref) have been swapped for Lloyds Ord and Pref stock respectively. The ratio for the Ords was 0.605 Lloyds share for each HBOS shares. As of today each Lloyds share is about 67p which is equivalent to about 40p for each old HBOS share. If you do actually hold Pref shares let me know and I can tell you more about those .....if needed!