Lloyds Grp 9.25 Discussion Threads

[cwa1] 15/12/2021 12:51

15 December 2021 Retail-Only Settlement Date
Expected Retail-Only Settlement Date for the Offers in
respect of Retail Holders whose respective validly
submitted Tender Instructions are received by the Receiving
Agent after the General Expiration Deadline and prior to the
Retail Only
22
Retail-Only Expiration Deadline. Payment of Purchase
Consideration and Incremental Accrued Dividend Payment
to Retail Holders in respect of the Offers.
As detailed in the section “Terms and Conditions of the
Offers – Payment” below, pursuant to the relevant Offer,
payments in respect of Preference Shares held in
certificated form may be made by cheque, and such cheque
is expected to be issued 6 business days after the RetailOnly Settlement Date. Furthermore, pursuant to the
relevant Offer, all payments of the Incremental Accrued
Dividend Payment will be made outside of the CREST
system and are therefore expected to be issued 6 business
days after the Retail-Only Settlement Date.

[holts] 15/12/2021 12:29

Is it settlement day for tendered prefs today ? No sign of any cash yet .

[redartbmud] 13/12/2021 07:40

Glavey

It is certainly a vexted question. I am very unhappy with the offer that I accepted, but I fell like I was raped and pillaged on a medieval scale with the ECN trick. The Regulator was complicit in the piece. I firmly believe that lightening can strike twice.

That is a personal opinion and not a recommendation.

[redartbmud] 10/12/2021 17:59

Holts I agree. They have previous form. I got caught out on the ECN slight of hand so I have taken the widow's mite that is on the table.

[holts] 10/12/2021 16:39

They will want rid of these , having made what they can claim was a reasonable offer as the interest rate cycle ticked up , this being Lloyds , I have assumed they will do whatever it takes now , we know how far they are prepared to go given their ECN approach . What , if any , reaction the FCA would have to their next move I am unsure .
The take up was lower than expected I think .

[rahosi] 10/12/2021 15:44

Re 9.25%. I make it 15.8% tender acceptance of which 3.3% was at the retail deadline.
I remain a holder

[nickieg] 10/12/2021 11:57

RNS issued. Looks like somewhat less than 20% tendered so similar result to NWBD.
I sold all mine but may well buy back in if price drops sufficently.

[pierre oreilly] 10/12/2021 10:58

Got rid of all mine. Final divi for me went in a week ago.

Interesting to see what happens from here. Seems a big spread atm.

[hindsight] 10/12/2021 10:18

I decided to tender 60%, time will tell

[glavey] 08/12/2021 04:25

FF,
"my decision is based on expected total returns. With inflation rising"

FWIW, the yield of the original instrument was circa 6% when bank base rate was 5%.*

"the uncertainties created by the Aviva"

...were put to bed to a certain (greater?) extent.

These points were covered within other posts earlier within this thread if you wished to look back for the detail. None of which should stop you from tendering if you wish to.


*There have been some changes in taxation since however. This is irrelevant if holdings are sheltered.

[future financier] 06/12/2021 10:24

JAF - interesting - and from the same "stable" as UKML.

[jaf111] 06/12/2021 09:59

As for alternatives have people looked at SMIF and / or TFIF, the former yields around 7% and pays monthly....

[future financier] 06/12/2021 09:43

I am slowly moving towards a decision to accept. Much has been said here about the legal status and/or trustworthiness issues but my decision is based on expected total returns. With inflation rising (maybe temporarily?) my gut reaction is that an exit yield of 5.5% feels about right - i.e. 2.5% above a reasonable mid-term inflation expectation of 3%. So there is no exit "premium" - but neither is there any discount for the uncertainties created by the Aviva attempt to scam the pref holders.

But there are still a few days to go .....

As for alternatives - my favourite for now is UKML - not really comparable but a rising dividend at 7% yield that appears to be safe ...... for now!

[nicholasblake] 05/12/2021 20:13

Quite right, @glavey.
The default setting is court sanctioned return of capital at par, but that can be overridden by articles, which form the contact between the company and the [pref] shareholders.

[glavey] 05/12/2021 19:22

"So it is not a "right to cancel" governed by company law ?"

It is, but it has to be voted. It's not carte blanche.

The operative word (in the original post by Nicholas) that you seem to have overlooked was "involuntarily".

[glavey] 05/12/2021 19:20

"May I ask; what do you intend to do?"

Probably just wait and see. (YMMV, to use an American idiom.)

I can see an argument for selling (tendering) in that one might speculate to buy an equiv. (or the same, even) instrument a little later on with a slightly enhanced yield. But then that would also give rise to a capital gain now (for most holders).

[tbow112] 05/12/2021 18:55

So it is not a "right to cancel" governed by company law ?

[glavey] 05/12/2021 18:49

NWBD terms are different, per the issue prospectus. AFAIIA, they require a 75% vote of pref. holders alone, not just a 75% vote of shareholders in general, in order to effect cancellation.

[tbow112] 05/12/2021 18:30

Can anyone reconcile posts 1368 and 1369 ?
"which cannot be redeemed involuntarily at par."
"the right to cancel is enshrined in company law."

[boystown] 05/12/2021 18:26

Thanks again Glavey. You've made me think I'll just hold onto the lot.

May I ask; what do you intend to do?

[glavey] 05/12/2021 18:24

As I have mentioned previously, LBG may be hoping that 'the fear' amongst PI's will be the driver to enable them to repurchase more of these than would have been the case otherwise. That said, I'd suggest Lloyds see it as a comparatively minor matter. They are not alone in this, there are still other bank (and similiar) prefs. in existence all legacy issues with relatively high dividend.

I do see one small worry. If sufficient PI's are 'scared' out of these holdings and the second tender results significantly reflect that, it could then trouble remaining holders into divesting and thus act to drive down the s/p. The results of the first tender would seem supportive, the unknown is the distribution (between II and PI holders).


"Preference Shares which are not validly tendered and accepted for purchase pursuant to the Offers will remain outstanding after completion of the Offers and shall remain subject to their existing terms and conditions."

[nicholasblake] 05/12/2021 15:03

Buy back NWBD, which cannot be redeemed involuntarily at par.

[kirkie001] 05/12/2021 14:43

Well, I've made the decision to tender half.

With this, and shedding 40% of my NWBD earlier in the year as well, I've lost c£1100 of annual dividends here that I'd like to replace.

Struggling to find suitable alternatives - particularly where there's (a) good dividend cover or degree of safety, (b) possibility of capital appreciation, and (c) I'm not already invested in....

[boystown] 05/12/2021 08:44

Good points Glavey and though by no means any kind of expert, I would agree with you about the "technical" points. But isn't this, ultimately, all about the PR? I would guess Aviva backed down not out of any sudden moral realisation, but because of the building outrage and threats of legal action. If enough people support the cause, then politicians get on board etc etc ... and no company that depends on its reputation (as arguably insurers do even more than most) can afford such vilification.

In other words, though, they would do it if they could.

So if we were offered a quid a year or two from now, would there be a sense of moral outrage after we turned down £1.67.25 now? Probably not.

All that said, I don't think they'll try to redeem at par, but will make regular offers at prevailing market conditions. But I think what I've outlined above is the fear for us PIs far more than the institutions (which would be more likely to mount legal challenges if there is a basis for them).

[glavey] 05/12/2021 06:28

"The only protection is that the inevitable screams of outrage may not be something which they wish to face just now."

Not necessarily the only. There is also the matter of the response they should have already given to the PRA as requested by the 'Dear CFO' letter of 16th Nov. 2020.


"Inflation is rising and the interest rates are forecast to rise too. It's not a bad affer in these circumstances imo."

Suggesting you may have not researched the situation when interest rates were far higher, details as mentioned earlier in the thread.