Lloyds Grp 9.25 Discussion Threads

[harmonics] 29/9/2011 16:42

Solarno
Thanks for that, I didn't know!
Yes Diviner I understand it's a waiting game but the share price looked at the bottom of a cycle so it could perhaps show a modest return prior to Divi announcement. I thought it had little downside so I had a punt and when they do announce a divi...well, happy days!
I nearly bought in at 80p a few weeks ago so I am pretty chuffed with the way it worked out!
Not an exciting share though!

[jammy00] 29/9/2011 16:36

with a lot of corporates including Halifax
making issues direct to the retail market
offering inflation proofing or yields you
cannot get on savings bonds as come ons

it is clear that new issues will be on
the cards if they be nade attractive -

from LLoyds point of view they are
possibly more likely to buy this
discounted paper in to get it out of
the way - but then what do I know??

[the diviner] 29/9/2011 14:31

A copy of the LLPx prospectus can be found here;



Around page 92 of the prospectus, people can see that with regard to LLPD;

18 Further Issues.
.......... further issues are Subject to the provisions set out in ''Variation of Rights''..........

and;

13 Variation of Rights
.......If the Company has paid the most recent Preference Dividend payable on the Preference Shares in full.........


They need to restart the preference share dividends before they consider making further issues and they want to make further issues.

Regards,
TD

[jonwig] 29/9/2011 12:49

On reading post #578, I checked the prospectus for LLPx and couldn't find any stopper on debt issuance.

The 5.5% retail bond (LBG2) was issued in April this year, I think.

[renew] 29/9/2011 12:16

I know LLoyds cant pay a divi on the ordinaries until they restart divi on prefs but do the LLPC etc. contracts say they cannot raise funds also. I thought they had been issueing bonds through the first 6 months.

[the diviner] 29/9/2011 00:40

kiwi2007,

There is also a positive in the FT artcle in that banks need to increase long term funds whenever possible:

"The press release also urged banks to raise long-term funds whenever market conditions made it possible. European banks have struggled to issue unsecured senior debt since the summer."

With regard to Lloyds they can only do that after they restart the LLPC and LLPD dividends.

All in all the future is looking quite rosy.

[kiwi2007] 28/9/2011 23:07

And unfortunately...



UK banks should cut bonuses and dividends rather than reduce lending to customers as they try to strengthen their balance sheets and cope with falling profits, the Bank of England's financial policy committee has warned.....

...Robert Laws, banking analyst at Nomura, said the "UK banks are going to be pretty light in terms of cash returned for several more years and investors should know that. They are going to be building capital.".....

[coolen] 28/9/2011 23:00

Solarno is correct: there is what used to be called a "Public Limit Board" on the London Stock Exchange. Anyone can put up "buy" or "sell" limits in LLPC which, in some cases can even take priority over normal business.

Sad that some stockbrokers are not clued up over this facility.

But as Diviner mentions, it is now a case of "when" divs resume which is key to the share price.

[solarno lopez] 28/9/2011 19:14

Harmonics you should have gone 'on the board'and you name your price to buy or sell usually deal within the spread

[the diviner] 28/9/2011 15:15

The LLPD gross dividend is about 15% based on the present 71p share price.

When the dividends restart, some people may be pleasantly surprised to find that they receive 10% more in dividends than they had expected. (This is because these preference share dividends are paid out of taxed company profits).

If we take LLPD as an example: - When the dividends restart: - every six months; a full 4.875p per share dividend should be paid to holders of LLPD, (net of tax), which means that holders of LLPD should receive a full 9.75p, (net of tax), per LLPD share per year.

A dividend of 9.75p, (per share per year), net of tax is equivalent to a 10.83p. (per share per year), dividend gross of tax.

The dividends for these preference shares are paid net of tax because the dividends are paid out of taxed company profits and the dividends come with a 10% tax credit for the tax that was paid by the company.

This has important tax implications because it means that a standard rate taxpayer will not need to pay any more tax on the dividends that they receive and neither will any higher rate taxpayers who hold these preference shares in an ISA or a similar wrapper.

[harmonics] 27/9/2011 14:53

I have just bought in (only 6000 for now)
Had to phone the trading company to be able to buy, he did the deal at 70p but said there was a bit of buy pressure.
I had to get my head around the spread though (not keen on red numbers in my account!)
A good (well informed) friend of mine thinks these are a good long term buy.

[holts] 26/9/2011 16:55

or in other words i think they are behaving like spread companies , re quoting when it doesnt suit them.

[zangdook] 26/9/2011 07:46

Hargreaves Lansdown won't allow LLPC or LLPD to be traded online - is it the same everywhere, or are there more serious brokers out there? It used to be possible at HL, but they stopped around the time of the ECN exchanges, even though LLPC was unaffected by them.

[extrader] 25/9/2011 16:05

Hi TheDiviner,

LTSB had GBP 27 Bn of exposure to Ireland at end 2010, second highest after RBS. A Euro rescue package for Portugal,Ireland and Greece might be helpful for the LTSB share price....

OTOH, LTSB's heavily exposed to the UK property market, which (if everyone's starting to accept that the emperor has no clothes) may now be allowed to fall to its 'natural' level (ie ignoring special effect of low interest rates).

Not sure whether Lloyds' glass is half full or half empty under these scenarios......

I'm inclined to think that the 'too big to fail' argument will prevail, tho. In which case, if they're not affected by the EU shenanigans, the Prefs etc should be a great longterm buy ?

ATB

[the diviner] 25/9/2011 11:38

The Lloyds banking Group stated dividend policy has consistently been that they will restart the dividends as soon as possible and I would expect that Lloyds Preference Shares should restart paying dividends in about six months time but the Lloyds preference share prices have allowed for a further three years of suspension.



Based on todays share price the dividend does work out to be equivalent to around 14% and there is another kicker in that the share price is likely to rise to over 120p in the next few years which is a capital increase of around 60%.

When we look around at the other bank preference shares which some others seem to like to do: right now, the Lloyds Preference Shares appear to be the best ones to buy by a clear margin.

NWBD has the stench of RBS all over it and SAN has the whiff of Spain about it.

Lloyds is virtually just a UK bank and Lloyds came out of the Vickers report almost unscathed because Lloyds is already considered to be just a retail bank.

Lloyds also has almost no direct exposure to the Euro problems. (It has virtually nothing in Greece and just a little bit in Ireland and Ireland has stabilised and has started to turn around).

For Lloyds the only potential problem could be if there was sharp decline in the UK economy with UK house prices plummeting but at the present time the decline is mild and since the UK is not in the Euro if we did start to go into recession the government could do a U-turn and could just print more money.

[rat attack] 24/9/2011 20:47

no chance of paying a div in the foreseeable future i would suggest!! However, i reckon these must be close to offering value with a prospective sometime future yield moving towards 14%?

[harmonics] 24/9/2011 19:00

Why did LLPC tank on Friday when LLOY did not?

[harmonics] 15/9/2011 15:53

Hello...anyone there?
It's that quiet here it's creepy.

[zangdook] 22/8/2011 11:01

Prior to the once in a lifetime financial meltdown; Lloyds had always been a good dividend payer

Of course, these were not Lloyds prefs then; they were HBOS.

[eithin] 17/8/2011 16:41

Am of the same opinion but the share prices do not reflect any resumption of divi payment next year.....

[the diviner] 16/8/2011 22:29

Prior to the once in a lifetime financial meltdown; Lloyds had always been a good dividend payer and it was not Lloyds idea to suspend the dividends it was due to the EU. - Lloyds only suspended the dividends because of the EU ruling and since then Lloyds have always stated that they want to restart paying the dividends as soon as is possible.

The suspension period ends in about six months from now, (on 31st January 2012) and I have little doubt that Lloyds will pay all the dividends that are due after that date on their normal payment dates.

These are a bargain. (As are LLPD).

[silverballs] 16/8/2011 19:52

My understanding is that the EU moritorium on the preference coupons ran for two years from 31st January 2010.If this is correct the first coupon payment could be made on 31st May 2012.Under EU law Lloyds had no choice but to suspend payment.Whether they would have done so of their own accord who knows.However why would a Bank seeking to reasert itself continue to miss its coupons.Dividends on the equity may be a long way off but these may be closer than people think.

[solarno lopez] 16/8/2011 14:17

but how many years or months have we already had of non payment?