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Prospectus

Gilts, bonds, and interest-bearing shares
jd1754
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Joined: September 18th, 2020, 4:40 pm

Prospectus

#502107

Postby jd1754 » May 22nd, 2022, 12:16 pm

Hi all,

Hope all is well.
Would be most grateful if somebody could share
copies of the Northern Electric 8.061 and Bristol Water 8.75 prospectuses?

Have been struggling to find.

Rgds

GoSeigen
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Re: Prospectus

#502159

Postby GoSeigen » May 22nd, 2022, 3:45 pm

jd1754 wrote:Hi all,

Hope all is well.
Would be most grateful if somebody could share
copies of the Northern Electric 8.061 and Bristol Water 8.75 prospectuses?

Have been struggling to find.

Rgds


They are both preference shares. Try the Articles of Association of the issuers.

GS

88V8
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Re: Prospectus

#502195

Postby 88V8 » May 22nd, 2022, 8:21 pm

jd1754 wrote:Northern Electric 8.061 and Bristol Water 8.75 prospectuses?

Sorry, no.

But I recall when forced redemption/capital reorganisation was a concern, all the common Prefs were gone through on TMF, and it was decided that the Bristol Prefs were safe, but the Northern Electric were not.
I sold my NTEA, still have BWRA.

V8

GoSeigen
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Re: Prospectus

#502254

Postby GoSeigen » May 23rd, 2022, 10:10 am

88V8 wrote:
jd1754 wrote:Northern Electric 8.061 and Bristol Water 8.75 prospectuses?

Sorry, no.

But I recall when forced redemption/capital reorganisation was a concern, all the common Prefs were gone through on TMF, and it was decided that the Bristol Prefs were safe, but the Northern Electric were not.
I sold my NTEA, still have BWRA.

V8


I don't believe this is relevant to the OP, as it refers to an unstated, very narrow and specific risk to preference shares, and left expressed as above it's downright dangerous advice.

There is no such thing as a safe preference share: they are highly subordinated in the capital structure and as share capital they give their holders very few statutory rights and protections. Investors are strongly exposed to contract terms, the aptitude of management and the vagaries of the market so really not that different to ordinary shares apart from seniority in terms of dividends and capital. And it's worth mentioning that in an inflationary environment their fixed interest is arguably a disadvantage relative to ordinary shares.

Preference shares are risky. I remember a couple of years back when NatWest made a tender offer for their NWBD shares many posters here said they would refuse the offer as the 175p (IIRC) price was far too low as would be demonstrated by the market price in due course. Today those same shares trade at 146p in the market, representing a loss to holders of almost six years' worth of dividends.

Buyer beware!

GS

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Re: Prospectus

#502263

Postby Gan020 » May 23rd, 2022, 10:57 am

GoSeigen wrote:
Preference shares are risky. I remember a couple of years back when NatWest made a tender offer for their NWBD shares many posters here said they would refuse the offer as the 175p (IIRC) price was far too low as would be demonstrated by the market price in due course. Today those same shares trade at 146p in the market, representing a loss to holders of almost six years' worth of dividends.

Buyer beware!

GS


The tender offer was in June 21 so not even a year. It demonstrates just how wild a ride the stock market can be and in my mind the effects of printing so much money.

GoSeigen
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Re: Prospectus

#502300

Postby GoSeigen » May 23rd, 2022, 12:53 pm

Gan020 wrote:
GoSeigen wrote:
Preference shares are risky. I remember a couple of years back when NatWest made a tender offer for their NWBD shares many posters here said they would refuse the offer as the 175p (IIRC) price was far too low as would be demonstrated by the market price in due course. Today those same shares trade at 146p in the market, representing a loss to holders of almost six years' worth of dividends.

Buyer beware!

GS


The tender offer was in June 21 so not even a year. It demonstrates just how wild a ride the stock market can be and in my mind the effects of printing so much money.


Indeed and demonstrates how bad my memory is! I actually sold my NWBD into the market instead of waiting for the tender. Switched promptly into MBSP (Manchester Building Society PIBS), made a good 200% in those, now just started buying back those NWBD at sub 150p, so yes, wild ride is about right!

GS

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Re: Prospectus

#502331

Postby 88V8 » May 23rd, 2022, 4:34 pm

GoSeigen wrote:...now just started buying back those NWBD at sub 150p...

Somewhat sidetracking this topic, and I recall that NWBD was another Pref that was deemed 'safe' (in the narrow sense you refer to) but do you think that the fall in Prefs has come to an end?
I'm rather assuming that they're off the menu until interest rates top out, as continued falls in SP will eat one's dividend.

V8

jd1754
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Re: Prospectus

#502418

Postby jd1754 » May 24th, 2022, 9:56 am

Thanks all, much appreciated.

Gan020
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Re: Prospectus

#502768

Postby Gan020 » May 25th, 2022, 3:15 pm

88V8 wrote:Somewhat sidetracking this topic, and I recall that NWBD was another Pref that was deemed 'safe' (in the narrow sense you refer to) but do you think that the fall in Prefs has come to an end?
I'm rather assuming that they're off the menu until interest rates top out, as continued falls in SP will eat one's dividend.
V8


I think the challenge is it's anyone's guess where interest rates are going. The UK economy doesn't look in great shape but the US looks better and if they keep raising rates over and over and over capital will flow abroard and the prefs will be under pressure even if the BOE decided they can't raise rates.

My personal view is that the bond market is slowly sorting itself out and yields are becoming more appropriate, but they haven't got their yet.

88V8
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Re: Prospectus

#502770

Postby 88V8 » May 25th, 2022, 3:24 pm

Gan020 wrote:
88V8 wrote:Somewhat sidetracking this topic, and I recall that NWBD was another Pref that was deemed 'safe' (in the narrow sense you refer to) but do you think that the fall in Prefs has come to an end?
I'm rather assuming that they're off the menu until interest rates top out, as continued falls in SP will eat one's dividend.
V8

I think the challenge is it's anyone's guess where interest rates are going. The UK economy doesn't look in great shape but the US looks better and if they keep raising rates over and over and over capital will flow abroad and the prefs will be under pressure even if the BOE decided they can't raise rates.

My personal view is that the bond market is slowly sorting itself out and yields are becoming more appropriate, but they haven't got there yet.

As a proxy of the overall market accessible to the retail investor, I look at AXI Axiom Debt (IT) where the SP is still falling.
Down about 8% from the January peak, on a yield of c6.75%.

I expect a couple more rate rises here and in the US, so I agree, for me it's too soon to get back into Prefs.

V8

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Re: Prospectus

#504127

Postby BobGe » June 1st, 2022, 3:18 am

GoSeigen wrote:Preference shares are risky. I remember a couple of years back when NatWest made a tender offer for their NWBD shares many posters here said they would refuse the offer as the 175p (IIRC) price was far too low as would be demonstrated by the market price in due course. Today those same shares trade at 146p in the market, representing a loss to holders of almost six years' worth of dividends.
GS

175 - 146 = 29
6 x 9 = 54 simple

GoSeigen
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Re: Prospectus

#504149

Postby GoSeigen » June 1st, 2022, 8:00 am

BobGe wrote:
GoSeigen wrote:Preference shares are risky. I remember a couple of years back when NatWest made a tender offer for their NWBD shares many posters here said they would refuse the offer as the 175p (IIRC) price was far too low as would be demonstrated by the market price in due course. Today those same shares trade at 146p in the market, representing a loss to holders of almost six years' worth of dividends.
GS

175 - 146 = 29
6 x 9 = 54 simple


Correct, I used the dividend yield instead of coupon. D'oh!

Probably a bit premature but have bought a few back @143p.


GS


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