Lloyds Grp 9.25 Discussion Threads

[my retirement fund] 14/6/2020 18:28

Its just a matter of time before these get cancelled at par using legal options at Lloyd's discretion. Anyone who imagines the Aviva experience has some kind of precedent here will be sorely disappointed. Lloyd's won't blink twice at it given their experience in the high courts with their early cancellation of their ECNs.

[nicholasblake] 14/6/2020 17:22

BTW there are clear legal precedents for cancellations at par. Last I know of more than twenty years ago, so only old timers would remember.

[nicholasblake] 14/6/2020 17:21

Aviva had a clear legal right to do so. But pref holders with a veto because of their ORD holdings caused Aviva to withdraw.
Lloyds has form with bonds.

[investor73] 14/6/2020 16:11

"they simply cancel them at par using legal means within the companies articles!"

Nobody has done that yet to my knowledge. Aviva tried but failed.

[my retirement fund] 11/6/2020 12:52

They don't call them these days, they simply cancel them at par using legal means within the companies articles!

[investor73] 11/6/2020 12:48

LLPC AND LLPD are the only perpetuals in the Lloyds stable. All other prefs can be called without any problem at their maturity dates imo.

[redartbmud] 27/4/2020 11:16

Cerrito

I bought LLPE and LLPC when Lloyds was about to reinstate the dividends, so I got a good entry price.
I always expected the call in 2024, so I may have a decision to make on capital v income at some point, but at £56m they will definitely be called, in MHO.

[alphorn] 27/4/2020 10:09

C - I think so too; unless something very strange and unexpected happens to rates!

[cerrito] 27/4/2020 10:04

redartbmud
Thanks for doing that digging.
As someone who bought LLPE earlier this year I am going on the basis that they will be called in 2024.My understanding is that the issue size is £56m so money at the back of the sofa for Lloyds.

[redartbmud] 27/4/2020 08:50

Looked back on the Lloyds website and it does appear as a Resolution at past AGM's.
Checking a few of them, the voting is 99%, and change, for the resolution.

So, shareholders give them permission to buy back prefs.
It isn't to say that they will, but the pathway is there should they choose to try.
Aviva raised a tsunami of protest, when they tried, and I am sure that the same situation would occur here too.

Page 262 Note 39, of the latest accounts, gives a total figure for Preference shares, at 31.12.2019 as £902m. They don't give a breakdown by individual Prefs.

In the year the repurchased £3m of 6.3673% non-cumulative Fixed to Floating Rate Preference Shares, callable in 2019.
Various other Notes and Bonds callable in the year were also redeemed.
I expect them to call LLPE in 2024, when they become due.

[pierre oreilly] 27/4/2020 08:34

I think I got these from tech boom proceeds at about ,16% yield iirc. Don't want to sell them at anything like the current price, I like the big fat isa deposit every six months!.

[nicholasblake] 27/4/2020 08:30

Pretty sure it's a regular occurrence.

[redartbmud] 27/4/2020 08:28

Cerrito

I don't have the previous yrear's resolutions, so I am unable to answer the question, without a bit of digging.
As I was voting, I thought I would just disclose the fact.
The resolution on ordinary shares is standard, whether or not it is implemented. I do not recall seeing prefs buybacks similarly listed as a resolution by companies as a general rule.

[alphorn] 27/4/2020 08:14

Thought as well a cloak and dagger buyback.

[cerrito] 27/4/2020 07:26

Thanks redartbmud.
Do you know if this is a resolution they have every year or is this the first time they have had it??
I go on the basis that it is against the spirit of not the letter of what the Regulator has said on buy backs.

[redartbmud] 27/4/2020 07:15

jimbox

I agree with what you say.
Kicking around possible scenarios.
I don't like, or trust, or have any confidence in the 'lightening zipper'. His tenure as CEO has so far been a train wreck.

Just MHO

[jimbox1] 27/4/2020 06:58

The share price likely to be marked up pretty sharply if Lloyds starts buying back prefs in the open market, in my view. Any such purchases would have to be disclosed by RNS.

[redartbmud] 26/4/2020 15:22

Item 28 on the AGM agenda is for the approval of shareholders to purchase preference shares.
There is a scenario that looyds could continue to buy prefs, in the market at current prices, then maybe petition to tender for the balance when the remaining number of prefs, in each category, becomes 'negligible', on the basis that they are not worth the time and effort to administer.

[redartbmud] 20/4/2020 07:32

Very helpful.

Thanks.

[cwa1] 20/4/2020 07:07

Thanks Cerrito, worth a look. Hope you don't mind if I post a clickable link for the indolent :-)

[cerrito] 19/4/2020 22:26

hxxps://www.bondvigilantes.com/blog/2020/04/14/beyond-dividend-cuts-crisis-implications-for-bank-debt-investors/?utm_campaign=Bond%20Vigilantes%20English&utm_medium=email&utm_source=Eloqua

Makes a good case for why Central Banks- having forced the banks to suspend dividends on ordinary shares- would be very reluctant to upset the applecart on AT!, or subordinated debt but does not comment on preference shares.
Incidentally I could not get from Lloyds AR the total amount of preference shares issued..they say amalgamated into subordinated liabilities.
My understanding is that the total amount of LLPC,D and E issued is about £400m which would mean total dividends of just under £35m pa-insignificant for Lloyds.
This would suggest that for a quiet life they will continue to pay the dividends.

[cerrito] 01/4/2020 12:57

Getting back to LLPC, I rather simplistically think that the price should have gone up today as payments are not going to be made to pay to people in a junior position to pref shareholders and the balance sheet will be that much stronger.

I am watching the gilt market and the one I always follow is the 4.25% 2055 which as of now has a running yield of 2.02%.

[alphorn] 01/4/2020 12:57

I would have thought that they have already been paid?

[loglorry1] 01/4/2020 12:47

Bonuses won't get paid unless there is a very strong legal contractual obligation to do so. The PRA have basically told the banks to cancel them. Last time in 2009 the banks wriggled a bit by saying they were contractually bound to pay bonuses under employment contract but I expect this won't happen this time.

[glavey] 01/4/2020 11:20

AFAIIA, the banks have yet to agree to cancel bonuses.