Lloyd’s Bank Preferential Shares

uknick

wmb194 said:

uknick said:

Thrugelmir said:

uknick said:

If you sold would you be able to get equivalent the annual income elsewhere?  Mine are returning about 7% per year ignoring any capital growth.

On redemption you'll only receive nominal value. Any market premium will dissipate.

True, if Lloyds cancel them, despite them saying they won't.  Maybe, it is time to take the offer.  Of course with my luck and poor judgement, whatever way I go everybody else should do the opposite 

Which ones do you own? Some are redeemable whilst some are irredeemable. LLPE, the one we've been talking about, is redeemable. LLPC 9.25% and LLPD 9.75%, the two others commonly held by retail investors, are, short of shenanigans of the type Aviva tried with its preferences shares a few years ago, irredeemable.

I have the 9.25% LLPC irredeemable.  I had, incorrectly, thought Aviva bought back theirs which led to my comment.  For the time being I'll hang on to mine.

RAFFLES

I think I'll hang on as well. There doesn't seem anything to gain by selling them.

typistretired

I’ve decided to sell the preference shares but still have the Lloyd’s ordinary shares

Oldhand_2

As a fellow 400 shares owner I agree with the calculations, we will be around £29 down if we accept the offer. But we will have £450 to invest for three years, so if that can clear around 2.5% pa then the 'loss' is recovered. Who knows, it may even be profitable, and perhaps a little more interesting.

Oldhand_2

By the way, can someone explain these figures released yesterday?

'Lloyds Banking Group PLC - Edinburgh-based lender - Announces results for tender offer of outstanding preference shares first announced on November 10.

For the GBP198.1 million total of 6.475% non-cumulative preference shares, Lloyds will purchase GBP3.7 million, leaving GBP52.8 million outstanding.'

There's no way my calculator can reconcile those figures.

Thrugelmir

£198 million was the total nominal value when the stock was originally issued.  Lloyds appear to have used a broker to mop up stock when it's traded . With 3 million now tendered for purchase. That leaves £52 million of nominal stock still in investors hands. 

The full title of the stock is

£198,065,600 6.475% Non-Cumulative Preference Shares

wmb194

There have been tender/exchange offers in the past. Many of the various preference share issues were voluntarily exchanged for new hybrid securities* in the wake of the 2008 financial crisis.

*And ended up being litigated in the Supreme Court when Lloyds redeemed them at par after they hadn't run for very long but that's another story.

sooty900

RAFFLES said:

I have 400 of the 6.475% shares.
They have been paying a dividend of £12.95 twice a year, so a total of £25.80 per year.
If they are offering  £1.12 per share that equals £448

if I continue to hold until 2024, then that will mean that I get £1 for them plus at least another £51.60 (2 years dividends) totalling £451.60. Unless I get 3 years dividends which would mean £477.40

I am no expert, and have probably got this wrong?

They are offering 112.05 % presumably of the market value on the day.  That won't be 112p I don't think.

typistretired

I'll post when Lloyd's inform me how much they will be paying me

Thrugelmir

sooty900 said:

RAFFLES said:

I have 400 of the 6.475% shares.
They have been paying a dividend of £12.95 twice a year, so a total of £25.80 per year.
If they are offering  £1.12 per share that equals £448

if I continue to hold until 2024, then that will mean that I get £1 for them plus at least another £51.60 (2 years dividends) totalling £451.60. Unless I get 3 years dividends which would mean £477.40

I am no expert, and have probably got this wrong?

They are offering 112.05 % presumably of the market value on the day.  That won't be 112p I don't think.

112p is the offer.