Lloyds Grp 9.25 Discussion Threads

[carcosa] 09/3/2018 11:12

Where can I obtain daily trade data? All my usual sources including seem to have stopped reporting trades mid February.

[kenny] 09/3/2018 11:00

I have looked at the LLPC and LLPD terms and note there are substitution rights as detailed below:

“Subject to the Articles, the provisions of the Companies Act and all other laws and regulations applying to the Company and to confirmation from the FSA that it has no objection, the Company may substitute the Preference Shares in whole, but not in part, with Qualifying Non-Innovative Tier 1 Securities, at any time without any requirement for consent or approval of the holders of the Preference Shares. Upon such substitution, the Preference Shares shall be exchanged for, or redeemed by, the relevant Qualifying Non-Innovative Tier 1 Securities or the proceeds of redemption of the Preference Shares shall be mandatorily applied to the subscription or purchase of the Qualifying Non-Innovative Tier 1 Securities so issued.”

I am no legal expert but this is a concern albeit the FCA must confirm it has no objection. Holders have to assess the extent to which they can rely upon the FCA to “protect”; their rights?!?

Personally, I am buying and sticking with what I know to be actual irredeemable preference share, namely RUSP, because its yield is still higher and they really are irredeemable with no reference to a capital reconstruction or substitution rights contained in their terms.

As someone else has commented on the RUSP board, it is ironic that investors in the RUSP preference share worry about investing in Russia, when it is the good old City of London crooks that are ripping off investors by using methods that are legal but immoral!!

[madmix] 09/3/2018 10:57

Managed to snaffle up some LLPD at around 140p. Price still lagging LLPC despite the extra yield.

I note that even AV.A are bouncing back now.

[holts] 09/3/2018 10:48

Log , it seemed clear that Aviva could exploit the loophole it was there for whatever reason , llpc and d did not have that clause , they do have the substitution clause to T1 but with no clarity of how the coupon would be calculated .

[tiswas] 09/3/2018 10:47

Thanks for that summary Log. You tempted with the risk/reward at this price?

[holts] 09/3/2018 10:37

We now have the reverse lunacy of c costing more than d , albeit d not as liquid

[loglorry1] 09/3/2018 10:35

As a very quick summary the problem here is not redemption but cancellation of capital. The prefs rights are well protected in the case of redemption. Basically they are irredeemable.

The loophole that Aviva are exploiting is that ordinary shareholders can vote to reduce preference share capital via cancellation. The prospectus suggests that in this case holers get par+accrued (in the case of llpc/d).

It is certainly not clear cut in the case of llpc/d. The only language which is in there that talks about capital return is to do with "Rights upon Liquidation" page 25. The reason for this that being irredeemable I suppose the case of return of capital outwith liquidation wasn't contemplated by the lawyer drafting the prospectus.

The Aviva prefs seem different - they seem to suggest that there is a way to return capital outside of liquidation.

On a return of capital on a winding up, the holders of the Further New
Preference Shares shall be entitled to receive
(page 9).

[holts] 09/3/2018 10:30

And page 81/2 relevant

[holts] 09/3/2018 10:21

kenny , page 27 of logs link

[tiswas] 09/3/2018 10:21

MRF

Looking at advfn for llpc all trades seem to be reported after the close as being 7.00 but there were 550k reported yesterday so I would expect a multiple of that today to cause this sort of volatility. So 50k helps but probably just a drop in the ocean. Yesterday there were 2 trades of 300k at 178.25, over the offer, so it could be worse!

Frustrating not to have live pricing and a better understanding of liquidity/order book.

Aviva pref trades, however, are being shown live which seems a bit odd.

On balance I do not think Lloyds can go down this route but smarter people than me must be offloading shed loads today so wtfdik?

[jimbox1] 09/3/2018 10:16

After re-reading the prospectus, I bought back in to LLPC. As Holts says, these are "Irredeemable." If there was any scope to redeem at par, Lloyds would have done it by now.

[whitestone] 09/3/2018 10:15

Some discussion here on OldBoyReturns site

[loglorry1] 09/3/2018 10:08

Here are the terms Kenny

[kenny] 09/3/2018 10:05

Holts, please can you give us the link to the LLPC and LLPD terms?

[redartbmud] 09/3/2018 09:55

Folderboy

I have made several trades, in shares, in the last few weeks that have gone unreported for quite a long period of time before they have finally been reported.
It apparently depends on the market maker posting them in the system.

[my retirement fund] 09/3/2018 09:54

Now the proud owner of 50000 average price circa £1.34.

[holts] 09/3/2018 09:37

Go read the lloyds joint prospectus all 232 pages , c and d , are written irredeamable with no variation clause , unlike some of the others on that prospectus and it seems it excludes a self imposed reduction of capital, so this seems wrong, but then thats my assessment .

[folderboy] 09/3/2018 09:34

Thanks for info - however depressing. Never occurred to me that they could simply not post trades, across a range of shares. That's legal is it? Certainly doesn't seem very ethical.

I am down many 10s of thousands this morning. Sit and hope I guess

[redartbmud] 09/3/2018 09:32

Financially Criminal Authority.
You must be joking, never around when the little guy needs protection!

[kenny] 09/3/2018 09:26

See my comments on the AV.a board at posts 326 and 327 which explains the "trick" Aviva are using. Need to review the exact terms of all other preference shares issued by UK incorporated companies to see if it applies in those instances.

[nerja] 09/3/2018 09:10

MRF you have got big ones, good luck

[westcountryboy] 09/3/2018 09:07

These are surely worth some consideration at 132.5 to buy. Even if they are eventually redeemed at par, for which there is currently no evidence whatsoever, it will take a long battle and in the meantime you would expect dividend payments to be continued at 9.25%.

[tiswas] 09/3/2018 09:05

So is this panic mode or a buying opportunity?

I assumed irredeemable meant just that, but maybe I have got that wrong.

[my retirement fund] 09/3/2018 09:04

Its not zero trades. They are simply not printing the transaction now to keep us in the dark. Ive just bought a shed load of LLPC around 132.