Lloyd’s Bank Preferential Shares

sooty900

Thrugelmir said:

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. 

Ok thanks. I missread it. Wish I had sold them now but its probably too late.

jimjames

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?

Although if you get the money now you can then invest it elsewhere and get other income from it for the next 3 years which should equate to more than the money you'd get if you wait

wmb194

sooty900 said:

Thrugelmir said:

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. 

Ok thanks. I missread it. Wish I had sold them now but its probably too late.

Obviously there will be a broker's fee but you can always sell them in the market. Looks today like people have been achieving 110p for their sales. Appears that three people sold their free shares.

typistretired

I received £448.20 for my shares £1.1205 times 400.

typistretired

Also now received final dividend of £1.06
total £449.26

garfield33

Reviving an old thread

Had a letter today saying Lloyds will be redeeming these shares for 100p each in September - I shall miss my twice-yearly £12.95!

wmb194

garfield33 said:

Reviving an old thread

Had a letter today saying Lloyds will be redeeming these shares for 100p each in September - I shall miss my twice-yearly £12.95!

Oh yes; 100p plus accrued dividend* of 3.2375p on 15/09/24 so you'll receive one last dividend. This is the first opportunity Lloyds has had to redeem these.

*Not sure why the RNS states interest, these preference shares pay a dividend. I've just double checked the prospectus and there's no mention of interest, only dividends.

https://www.londonstockexchange.com/news-article/LLOY/redemption-of-preference-shares/16572482

MDMD

wmb194 said:

garfield33 said:

Reviving an old thread

Had a letter today saying Lloyds will be redeeming these shares for 100p each in September - I shall miss my twice-yearly £12.95!

Oh yes; 100p plus accrued dividend* of 3.2375p on 15/09/24 so you'll receive one last dividend. This is the first opportunity Lloyds has had to redeem these.

*Not sure why the RNS states interest, these preference shares pay a dividend. I've just double checked the prospectus and there's no mention of interest, only dividends.

It’s probably because Lloyds hold these as (interest bearing) subordinated liabilities on their balance sheet rather than equity (which pays dividends). Accounting standards can require redeemable pref shares to be recorded as liabilities, not equity, as they are no different in substance to debt. 

HMRC will likely still treat this as a dividend I believe
https://www.gov.uk/hmrc-internal-manuals/corporate-finance-manual/cfm21120

isotonic_uk

Hi

I have received a letter recently from Lloyds informing me that I have received a notice of redemption of 6.475% non cumulative preference shares. Currently holding 400. They are saying that in accordance it intends to redeem the preference shares in full at 100p per preference share together with accrued interest to the date of repayment at 3.2375p per preference share.

What exactly does this mean in layman's terms? Is it they want to buy them back? What about if I don't want to sell them, can I exercise that right or do I not have that option? Just so I know for future why would companies want to do this? Be good to get this broken by someone who knows a bit more about this than me. Thanks

wmb194

isotonic_uk said:

Hi

I have received a letter recently from Lloyds informing me that I have received a notice of redemption of 6.475% non cumulative preference shares. Currently holding 400. They are saying that in accordance it intends to redeem the preference shares in full at 100p per preference share together with accrued interest to the date of repayment at 3.2375p per preference share.

What exactly does this mean in layman's terms? Is it they want to buy them back? What about if I don't want to sell them, can I exercise that right or do I not have that option? Just so I know for future why would companies want to do this? Be good to get this broken by someone who knows a bit more about this than me. Thanks

They’re redeemable preference shares and this was always the first opportunity for them be redeemed - have a look at the prospectus. You don’t have a choice; you’ll receive £400 and a last dividend.

Why? They don’t count towards loss absorbing capital anymore ie. they’re obsolete and they’re relatively expensive.