Gen.acc.8se.pf Discussion Threads

[skyship] 14/11/2022 10:37

Many just view GACA as an income stock. I view that income as useful; however I think of it more as the equity it is. Consider this. A return to a 6.5% yield, the level we saw in late May (c6months ago) would mean an share price of 136.5p - the purple line on the chart. That would mean a 20.8% capital gain. Add in the imminent 4.4375p dividend and the gain is just under 25%.

All quite possible IMO.


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[samenic] 12/11/2022 19:07

I know its beware of simple answers to complex questions but as prefs are now more or less treated as shares,even on my account by HL,maybe pension funds can no longer hold the amounts they have.This may change if govt changes rules regarding investing in shares??

[stansmith1] 12/11/2022 15:07

spectowhat do expect to happen, tender or forced redemption - par or above?

[spectoacc] 12/11/2022 14:58

Can only recommend people search the 2020 & 2021 Aviva AR's if you want to read Aviva's opinion on the GACA/B shares (which is what they are) - attempted a discussion previously but it seemed to ruffle feathers.

Fwiw, I don't expect them to go beyond 2026, when they cease to count as regulatory capital (unless that has/will change - but no one knows).

[jonwig] 12/11/2022 14:35

SKYSHIP - some posters (quite a few!) were concerned that AV. might have a legal right to alter the prefs (ie. via control of the ords). I hope my look at the GACA prospectus has reassured, though I am not a lawyer, therefore not wholly certain.

Of course, we're all aware that "With the utmost respect" is a common antiphrasis of a kind used by the ancient Romans.

[hindsight] 12/11/2022 13:51

I was involved in the ECN saga as a holder, it was quite wrong. But after that Lloyd's did tender for the prefs LLPC / LLPD and so did Natwest NWBD at prices just over the prevailing market. I know as sold 60% of mine into them. So in view of this precedence and the reward of forced par redemption being so much lower, it would be surprising if AV. didnt do a similar tender if they wish to remove them, but never say never

All prefs and illiquid second tier debt seems weak, spreads having moved out. I suspect pension funds are sellers and swapping into gilts on a risk adjusted basis (a risk being for them the ability to exit easily). It could be they view GACA slightly more risky so are selling such more agressively. But it seems far from being the only one

[skyship] 12/11/2022 13:26

With the utmost respect, all this talk about the prospectus is totally and utterly irrelevant.

Aviva will NOT do anything with the prefs which might yet again cause a furore.

Lesson learnt; all is history.

As I posted a few days ago; they might - might mind you - go for a Tender at a generous level just to get themselves out of this horrendously expensive debt due to the fact that it is not CT off-settable. Prefs are equity; bonds are not.

Choose an interest rate which provides a 20% premium; offer the Tender; and almost all will accept. QED.

[jonwig] 12/11/2022 12:16

Skinny, this was my search. The prospectus was the fourth entry down:

preference shares general accident aviva 8.875

[skinny] 12/11/2022 12:13

I can find this from March 1993 :-

[stansmith1] 12/11/2022 12:11

jonwiglol 6 min, thanks, no surprises who it was...

[jonwig] 12/11/2022 12:08

Skinny - 02/09/1992.

stansmith - it was Lloyds, about some bonds, not prefs in 2016. I think this was it;

[stansmith1] 12/11/2022 12:02

jonwigreason i mentioned drawing up of the terms was because it has since occurred that the terms of a prospectus can and have been overridden if the wording can be shown to have not conveyed the smoke in the room...i cant remember which bank exploited this...

[skinny] 12/11/2022 12:01

I paid 106p for these in 2011, so I'd add if we get there again :-)

Jonwig - what's the date of the prospectus on the Aviva website?

[jonwig] 12/11/2022 11:50

Has anyone consulted the prospectus for the issue of these prefs? It's on the Aviva website, easily googled, but I can't give you a url, and the document is not searchable.

However, section 7(iii), page 8 says clearly that the rights of the prefs can only be varied with the consent of holders of 75% of the shares. Holding 100% of the GA ords is not relevant.

Some other parts of section 5 might contradict that, but I'm not comfortable with complex legal jargon. Others should give views on sections 5, 6 and 7.

[stansmith1] 12/11/2022 11:45

oh and btw all the question marks are added automatically by the mobile app, not me :)

[stansmith1] 12/11/2022 11:42

hindsight/crt/ammonsthanks, could be wrong but during 2008 when the terms and even the drawing up of the terms of all the distressed prefs were examined in forensic detail - gaca/av.a were always regarded as being somewhat interchangeable...so that is interesting to find out after all this time...as crt says, aviva redeeming them after having been paying 8% over base for years seems strange, but sellers appearing as interest rates rise makes perfect sense...i see the tories doing everything - prudent and otherwise - to reduce interest rates before the next election, so now is a great time to be buying, although there may be better opportunities later...

[hindsight] 12/11/2022 10:07

stansmith1, I have avoided GACA/B on redemption grounds in the past, but now feel the upside to Aviva being a lot lower (price being lot closer to par) they are less likely to attempt such.

[crt131] 12/11/2022 09:54

SSmith.. With the cost of debt/borrowing at higher levels I would assume the need for AV to redeem any of these is greatly reduced.. just my take

[samenic] 12/11/2022 09:39

Is now the time to revisit bonds?

Just received Hargreaves latest email(circular)

[ammons] 12/11/2022 08:31

stansmith1, the AV prefs trade at a lower yield than the GA prefs because it is easier for Aviva to cancel the GA prefs. There was a very informative exchange about this issue earlier on this board. See posts 517, 521. There are probably more but those two posts sum it up.

[skyship] 12/11/2022 08:11

Below lifted from a post by nickrl on the CP+ thread:

"With BoE BOE Silvana Tenreyro already breaking cover to say rates should be held at 3% we already know that she will be advocating for no rise next month so could be a close vote between 0.5 and 0.25% if not in December then following meeting."

With the 10yr gilt yield now back below 3.3%; surely the Aviva prefs will soon respond.

[alphorn] 11/11/2022 21:07

Bads - order placed at 112. There is always Monday. ;)

[badtime] 11/11/2022 20:18

What price were you going for Alps..if you dont mind me asking

[stansmith1] 11/11/2022 19:17

do people here perceive any difference in risk (forced redemption etc) between av.a/b and gaca/b ?

[simon gordon] 11/11/2022 19:04

It's actually the highest weekly volume since ADVFN records began.


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