Lloyds Grp 9.25 Discussion Threads

[lord gnome] 06/5/2009 08:25

PS - hope you've got them somewhere nice and safe or the taxman will be saying 'well done' as well ;-)))

[lord gnome] 06/5/2009 08:24

Solomon - the yield is still better than you can get on any other prefs. I reckon the market will buy the yield down to around 10% over the next few months as things continue to stabilise. There is still good capital appreciation to be had.
Congrats on your BARC - that's a serious amount of profit - better than anything I have ever achieved.

[solomon9] 05/5/2009 19:52

I;ve got 28450 BARC ords at 79p ps still holding , if it gets to 400p I'll swap it into high yield bonds. Ever looked at the Barclays 6% perps? at 47p.

I bought 35000 Halifax 9.375% today paid 60

Lord Gnome do you think the L series are still a good buy- I reckon so

[simon gordon] 04/5/2009 10:01

Hi Pref Guys,

I have started a new thread which has the charts for c/d/e/f/g together:

[martincc] 04/5/2009 09:36

Cerrito,
Thanks, will take problem up with Etrade tommorrow.

[cerrito] 03/5/2009 21:21

martin cc your 368
I have prefs in my ISA/PEP


hirani 2 your 370
31/5 31/11

solomon9
Yes HALP which is a perpetual subordinated bond and hence in theory at least senior to a pref like LLPC at 60 has a gross yield of 15.68%, especially as LLPC/F are non cumulative so in theorey once again its slightly lower yield is justified although of course their tax treatment is different..

[solomon9] 03/5/2009 20:27

I reckon the Halifax 9.375% PIB also obviously a Lloyds liability is a pretty good buy, trading at just 60.

[rat attack] 03/5/2009 13:49

OldBoyReturns - your last sentence reveals the calculation, which of course you can then do npv of future cash streams to get true return. Thanks.

[old boy returns] 02/5/2009 23:16

rat attack - if your "20% followed by 10 years at a return of 2.31%" is supposed to relate to LLPF you have it wrong. The coupon is about 6.1%, the current yield about 20%. The coupon will change to LIBOR + 1.31% in 2015 but that does not equate to a yield of 2.31% on current cost even if LIBOR falls to and stays at 1%. If you buy today at, say, 275p the yield on cost will be 61/275 = 22% until 2015. The reversion yield on cost would then be 23.1/275= 8.4% if LIBOR were then 1% or 63.1/275 = 23% if LIBOR were 5%.

[rat attack] 02/5/2009 20:25

Pillion - thanks for that, but its not relevant in this instance. What is required is the annual rate of return if an asset is held to, say 2025 where the first 6 years pay eg 20% followed by 10 years at a return of 2.31%. In otherwords its effectively a bond valuation - but its a long time since I did this in my exams and I cant remember the calculation!!

[pillion] 02/5/2009 19:10

Compound Interest
a handy shortcut known as the Rule of 72. It states that you can find out how many years it will take for your investment to double by dividing 72 by the percentage rate of growth

So it will take 9 years for your investments to double if they grow at 8% a year (72/8=9)

But it will only take 6 years if your investments grow at 12% and so on

The Rule of 72 only provides an approximate answer but it is sufficiently accurate for many calculations.

[hirani2] 02/5/2009 18:23

Can any one tell what the devidend this pays.

[rat attack] 02/5/2009 13:31

martincc - dont know about isa, but prefs are ok in a sipp - I have 2 in mine along with nat west.

[martincc] 02/5/2009 12:36

Before I check with my broker (Etrade) on Tuesday can anyone advise,

I have both an ISA and a SIPP, and I already have a holding of LLPF in my ISA.

I tried to buy LLPG online in the ISA, but came up with a 'this share not valid for this account' message.
Tried a dummy buy for LLPG in my SIPP and got a quote ok.

Does anyone know, are all pref. shares (esp. the LLP_ pref shares) the same as far as ISA eligibility is concerned?

[old boy returns] 01/5/2009 23:06

rat attack - the yield will not be LIBOR + 1.31% in 2015 if you are buying at today's prices but more like 3-4 times (LIBOR + 1.31%). So if LIBOR is 5% or higher at that time the yield will be higher than it is today. Sure its a variable but in my view it could just as easily work out better than worse. And if I get 5-6 years of 25% annual income (my average return on my LLPF's) before that time I can live with that.

[rat attack] 01/5/2009 22:16

Old Boy Returns - but these yields are only until 2014 and 2018 thereafter libor + 1.31%. This suggests that there could be some capital erosion as this time nears, or on any increase in UK interest rates, or if Lloyds ratings do not improve!

[old boy returns] 01/5/2009 20:08

solomon9 - problem with PIBS for many is that the income is classed as interest rather than dividends for tax purposes. With LLPF/G prefs yielding c.20% and treated as a dividend I do not find the PIBS tempting.

[solomon9] 01/5/2009 16:59

Guys have a look at the Halifax 9.375% PIBS asking price is 60 - ie a yield of 15.6% - relatively good value for the same credit risk.

[davebowler] 01/5/2009 14:24

o/t
Guys I've just noticed that NAWI Nationwide 6.024% Pibs are trading at 63p and yielding 9.5% and are yielding 2% p.a. more than other Nationwide Pibs and are callable at 100p in 2015 to boot .The fact that you have to buy £31k's
worth at a time must be partly why, but do any of you know more?

[westcountryboy] 28/4/2009 22:36

I feel I have missed the boat on the RBS prefs after all those posts on TMF a month or two back. Now I'm not sure there's much in it in terms of yield, and I don't like the currency uncertainty and the faff of foreign dealing (but I didn't know you could buy them in sterling). Also I want to limit my exposure to the whole sector - if something is too good to be true it often is!

[holts] 28/4/2009 11:27

wcb, have you looked at rbs.r , similar properties albeit in dollars , can purchased in sterling , which is the riskier bank ? who knows.

[westcountryboy] 28/4/2009 07:59

You could buy them yesterday on the phone at Selftrade for 289 which was good enough for me given the possible upside.

[renew] 27/4/2009 21:09

Not so sure. I left orders at 280 and 285 last week and didnt get filled.