Lloyd’s Bank Preferential Shares

Hoenir

isotonic_uk said:

 Just so I know for future why would companies want to do this? 

Banks are required for regulatory reasons to hold capital reserves in their balance sheets. At a time in the past the issuance of redeemable preference shares was one way of doing this in a tax efficient manner. Regulations and capital reserve requirements change as time passes. Companies therefore conduct house keeping exercises. 

Hoenir

wmb194 said:

Hoenir said:

isotonic_uk said:

 Just so I know for future why would companies want to do this? 

Banks are required for regulatory reasons to hold capital reserves in their balance sheets. At a time in the past the issuance of redeemable preference shares was one way of doing this in a tax efficient manner. Regulations and capital reserve requirements change as time passes. Companies therefore conduct house keeping exercises. 

These ones are quirky: rather than cash, they were issued by Halifax as payment to members of Birmingham Midshires when it bought it.

Looking more closely this stock had a fixed redemption date of September 2024 in any event.

wmb194

Hoenir said:

wmb194 said:

Hoenir said:

isotonic_uk said:

 Just so I know for future why would companies want to do this? 

Banks are required for regulatory reasons to hold capital reserves in their balance sheets. At a time in the past the issuance of redeemable preference shares was one way of doing this in a tax efficient manner. Regulations and capital reserve requirements change as time passes. Companies therefore conduct house keeping exercises. 

These ones are quirky: rather than cash, they were issued by Halifax as payment to members of Birmingham Midshires when it bought it.

Looking more closely this stock had a fixed redemption date of September 2024 in any event.

It was optional - see my post above - but it was the first opportunity to redeem and then again every year.