Lloyds Grp6.475 Discussion Threads

[eithin] 27/1/2012 16:53

Just received an e-mail from Fastrade under the heading Corporate Action and stating the blocking of the divi ends 31st.January. So assume the divi due 15th. march will be paid.

[colinc57] 30/11/2009 15:33

more chat about lloyds prefs on LLPF thread ( now is the combined thread)

[colinc57] 30/11/2009 15:32

seems to ignore tax issues both on coupon ( as prefs come with credit) and cgt ( seems some issue on conversion - although not looked closely as not exchanging)

Happy to see ( and pay for by lack of initial divs) billons of pounds to be injected to the ords , and the billons of cushions the cocos could give.

[kiwi2007] 28/11/2009 02:26

Nick Louth: Preferential treatment for Lloyds investors

By Nick Louth

Published: November 27 2009 18:49 | Last updated: November 27 2009 18:49

As part of my move into corporate bonds, I have  picked up a number of preference shares at attractive prices.

Two of these were in Lloyds Banking Group, the 6.475 per cent (ticker symbol LLPE) and the 6.0884 per cent (ticker symbol LLPF) issues, both non-cumulative and perpetual. ......
...

.....
................So, assuming I get my full entitlement, the running yield based on my purchase price for LLPE will be 13.8 per cent and for LLPF 15.6 per cent. The yield to redemption is at least three points higher. That's an excellent return in exchange for the risk that Lloyds will fail to keep its tier-one capital ratio over 5 per cent. Having hit shareholders so hard, the bank must be desperate not to risk any further dilution.

[kiwi2007] 24/11/2009 22:16

...nandan... thanks for the good wishes and yes, I'm aware of all that and am still more than happy to be picking over the bones of the LLPx series at those/these levels....

Whilst the young bucks on here often want their jam today, some of us older bucks are more than happy to wait a couple of years to enjoy the results of what we see as an unusual opportunity in fixed income. Especially those of us nearing retirement.

[nandan] 24/11/2009 11:16

kiwi2007,

There is no expiry on LLPE, just a call date. IMHO --> LBG would redeem it only if they felt that it is "profitable" for them to do so. So, if interest rates were at say 7%, LBG would not redeem it as they are getting money at 6.475%. But, on issues like LLPF/LLPG, they may redeem it as after the call date they pay LIBOR+1.31/1.36. Though I should add there are other issues with LLPF/LLPG particularly size of issue after ECN/ECA.

Good luck

[kiwi2007] 24/11/2009 05:46

...because my tradeplan limit price of 50p was hit first and the yield (to expiry) of E appeared to possibly be slightly better.

[deadly] 23/11/2009 23:37

But why didn't you buy LLPD instead which offer higher yield?

[kiwi2007] 23/11/2009 11:06

...and added another few at 50p this am which I'm quite happy to keep.

[kiwi2007] 23/11/2009 08:46

Which i did adding 10,000 to my original 7,500 last week - so even I cant get it wrong every time.

[westcountryboy] 23/11/2009 08:38

Yes, 7.975%. A 14.5% yield for anyone who bought recently at 55p.

[kiwi2007] 23/11/2009 08:21

Looks like they've been accepted for the ECN and WILL be paying 8% (minus a nats whisker) p.a. until 2024 when they WILL be redeemed for GBP1.00?

Or that's my understanding (as long as LLOY don't drop their capital ratio below 5%) - unless anyone knows better?

[pejaten] 17/11/2009 06:57

ECN's interest payement dates are same time as current preference dates
Interest coupon is based on nominal value of GBP1.00

[tyranosaurus] 14/11/2009 14:23

What a confusing situation.

Do the ECN`s pay interest straight away or do these wait until 2012 to start paying out ?
What is the yield of 8 to 9% based on. Is it a nominal value of £1 or the exchange offer price ?

I can`t see any point in doing nothing but whether ECN`s or Ordinary shares/cash offer is best beats me.

[doowle] 05/11/2009 19:57

Yep, usually the best time to make an investment though.

[hosede] 05/11/2009 15:07

These really are yo-yoing up and down - clearly no-one really has a clue

[hosede] 05/11/2009 09:00

LG
Take your point
I don't have a huge holding (under 100k) and it's all in my ISA.
DoowIE - I don't think these are callable so the tender offer would have to be quite high (70p+) or it would be ignored. EU might forbid it as well!

[lord gnome] 04/11/2009 23:06

Quite so hosede, which is why I propose to retain my prefs and add more if we get to silly prices - and I think that we might. However, your point was about LBG not paying the prefs divis by choice, whereas their hands have been forced on this issue.
My own particular grouse is that I had built the income into my budget and thus the loss of two year's income will hit me in the pocket. I have a lot of income to replace all of a sudden.

[doowle] 04/11/2009 20:52

Compared to what the bank is getting in terms of funding prefs are very expensive capital. As long as the bank is government controlled it will not be taking money from the taxpayers on one hand and paying it out to pref holders on the other. Just politically ridiculous.

Best to hope for is the bank retires it by some sort of tender offer at deep discount to par, writes it back in its accounts at par and gets a magnified boost to capital.

[hosede] 04/11/2009 19:33

LG
Assuming Par is a reasonable price, then at 48p LLPE is discounting 8 years non payment of the divi.(in non DCF accounting admittedly). two years is nothing - what would that money earn in a deposit account - 3% pa? . Suppose it pays nothing for two years then returns to paying. In the next six years you get 6 x 6.475 = 38.85p: taken over the 8 years thats over 10% pa (38.85/8= 4.856/48 =10.17% plus a 52p capital gain total 93p = nearly 200% ! I think that's quite reasonable (hyperinflation excepted)

[lord gnome] 04/11/2009 15:52

hosede - are you missing the point? The EU will forbid LBG to pay the divi on the prefs for two years minimum. That's why my LLPC and LLPE are tanking.