Lloyds Grp6.475 Discussion Threads

[4spiel] 27/1/2018 23:57

But will they be called? Lloyds have much more expensive coupons to divest themselves of ?

[alphorn] 25/7/2017 11:34

Added a bit more today.

[loki666] 29/5/2017 19:30

RDSB would seem like a better choice

[alphorn] 29/5/2017 08:49

Known yield to redemption.

[loki666] 27/5/2017 15:32

A bit strange people buying these at 116, they are callable in 2024 for 100

[alphorn] 13/3/2017 16:10

6mths dividend to be paid this week.

[alphorn] 15/11/2016 22:53

Yes, here is a quick google:

I shall not go into differentiation equation but would demonstrate it with just a very simple example. Initially when the bond is issued, it is issued at par with a coupon (assuming annual coupon for simplicity) of C. Let's say the coupon rate is 5%. So C = $5 for par $100. Over time, the value of the bond is P = $5 / R where R is the discount rate. If R = 5%, P = $100 which is the par value. If the interest rate goes up by 100 bps (assuming paralleled shift in the yield curve), P = $5/6% = $83.33. The % change in price of the bond is 83.33/100 -1 = -16.7%. The duration is 16.7 for this case. As it can be seen that a perpetual bond is highly sensitive to interest rate.

[pvb] 15/11/2016 22:51

Well a perpetual would usually be considered more sensitive to interest rates.

[alphorn] 15/11/2016 22:49

I believe that the risk profile is different for perpetual debt instruments. It has some logic to me but don't ask me why. Perhaps a mathematician can explain?

[pvb] 15/11/2016 22:43

Fingers crossed then.

[4spiel] 15/11/2016 21:20

If they are called they will have to pay 100p. so the good thing is if you want a fairly safe coupon you are not going to lose much . if interest rates rise much between now and 2024 then these will be cheaper and you might make a profit if they are called. If they are only 75p they might try and tender say 80p that you do not have to accept. But wiill they pay 100p if they are only worth 75p - might they offer new securities at lower coupon plus a cash inducement. Why not hold the C·s or D·s that are perpetual -they have further to fall to 100p though. Lloyds have recently redeemed some Prefs and they probably think they are HBOS baggage better rid of when interest rates are low. But can they afford to -I think not at the moment but if they did its more cash for the ordinary dividend. It will take a long time for that and take more than selling off the prefs. In any case these are the cheapest coupon to pay so why would they be in any hurry when there are the more expensive ones to get rid of. Best for these if LLOYDs recovery continues to be slow I think.

[alphorn] 14/9/2016 10:50

Dividend payment tomorrow.

[midlanddave] 12/9/2016 15:51

Thanks guys!

[midlanddave] 12/9/2016 15:29

What was the initial offer price? £1??

Cheers.

[pvb] 12/9/2016 15:25

6.475p divided by the offer price.

[midlanddave] 12/9/2016 15:24

Does anyone have an idea of what yield these are paying at the moment? I'm getting lots of mixed information....

Thanks!

[loki666] 24/8/2016 19:50

Big buy today at 114

[redartbmud] 18/8/2016 07:35

4S

If they can refinance at a significantly lower coupon than 6.475% it is a no brainer.
We will have to see where interest rates are at the time.

[cwa1] 18/8/2016 07:22

And pay day is 18/9.

[alphorn] 10/8/2016 08:31

XD August 18 coming up.

[4spiel] 28/7/2016 12:08

They might never be called !

[loki666] 21/6/2016 12:47

Since the ECN ruling been in free fall, not callable until 2024?

[alphorn] 21/6/2016 11:32

Also moving down a fair amount - may buy some more???

Strange movement?