The Lemon Fool

Has anyone received settlement for the B&W or Bank of Ireland sterling or euro prefs tender offers? Was supposed to be 13 July for investors who accepted before the General Expiration deadline (see below) but no funds received in my case. Which is infuriating considering I planned to reinvest in long term gilts (TG61) which are on the move now following inflation figures.

The Settlement Date for Institutional Investors and for Retail Investors whose respective validly submitted Tender Instructions were received by the Receiving Agent prior to the General Expiration Deadline is expected to be 13 July 2023 (the "Early Settlement Date").

I've received payment on Bristol and West at IBKR and Barclays, but no payment at HL. Which is annoying for the same reason.

FYI - I've heard from HL they would reconsider holding those PIBS if you manage to convince the issuers to deal with the LSE/ Crest situation. Did you get anywhere with it?

richydicky wrote:I think there has been some conflation here between the winding up of Bristol and West and the BOI prefs. The winding up of B&W requires a 75% vote - that has nothing to do with BOI, a separate entity, hence the meeting for the Extraordinary Resolution for BOI holders. And here is the relevant section on passing of the resolution to redeem the bonds.

What are the minimum thresholds for passing the Extraordinary Resolution?

Quorum requirement for the Meeting
The minimum quorum required for the Meeting to consider the Extraordinary Resolution is one or more persons present and holding or representing in aggregate not less than two-thirds of the principal amount of the Bonds for the time being outstanding. If the Meeting is required to be adjourned, the quorum at such adjourned Meeting will be one or more persons present and holding or representing in aggregate not less than one-third of the Bonds.

Thanks but I don't see the threshold for passing the BoI motion there. It is 75% for Bristol & West, is it a straight >50% for BoI? I don't mean the quorum requirement.

2boi2 wrote:Thanks but I don't see the threshold for passing the BoI motion there. It is 75% for Bristol & West, is it a straight >50% for BoI? I don't mean the quorum requirement.

It's 75% but instos have already voted strongly in favour so close to 50% of PI-held bonds need to vote against to block the redemption. That's 50% of the bonds, not 50% of those voting.

GS

Thanks - interesting that HL has not credited your BWSA tender offer funds. I find they consistently drag things out far too long including with the crediting off interest and dividends. Not a good look especially with current interest rates ...

The getting Leeds, Coventry & Skipton PIBS dematerialised into CREST project is ongoing. It is should be straightforward for issuers to do but life is never that simple! The more investors etc who nag issuers to get on with it the better.

Jwdool wrote:I've received payment on Bristol and West at IBKR and Barclays, but no payment at HL. Which is annoying for the same reason.

FYI - I've heard from HL they would reconsider holding those PIBS if you manage to convince the issuers to deal with the LSE/ Crest situation. Did you get anywhere with it?

Just thought Jwdool - are you sure HL submitted your acceptance in advance of the deadline for supposed 13 July settlement? I asked them to do so as soon as the offer was announced and they (wrongly) replied that 13 July settlement was only available to institutional investors. After I pointed out their error they said they would do it but I still have not received funds and they are not responding so I now doubt they did. Why HL can't just be helpful, rather than end up dealing with expensive complaints, is beyond me.

Jwdool wrote:I've received payment on Bristol and West at IBKR and Barclays, but no payment at HL. Which is annoying for the same reason.

FYI - I've heard from HL they would reconsider holding those PIBS if you manage to convince the issuers to deal with the LSE/ Crest situation. Did you get anywhere with it?

It sounds like HL have dropped the ball again....

OB"Wan"R is tendering! Catharsis!
Let's take a minute to remember that we wouldn't even be in this situation (at least not for the BoI 13 3/8) as bondholders in 2023 if it wasn't for him. The bonds would have been toast 10y+ ago.

Indeed, those of us who held back in 2011 owe a considerable debt of gratitude to ObeWan

OldBoyReturns wrote:Has anyone received settlement for the B&W or Bank of Ireland sterling or euro prefs tender offers? Was supposed to be 13 July for investors who accepted before the General Expiration deadline (see below) but no funds received in my case. Which is infuriating considering I planned to reinvest in long term gilts (TG61) which are on the move now following inflation figures.

Swapping BoI for TG61 with a YTM of 4%?

2boi2 wrote:

OldBoyReturns wrote:Has anyone received settlement for the B&W or Bank of Ireland sterling or euro prefs tender offers? Was supposed to be 13 July for investors who accepted before the General Expiration deadline (see below) but no funds received in my case. Which is infuriating considering I planned to reinvest in long term gilts (TG61) which are on the move now following inflation figures.

Swapping BoI for TG61 with a YTM of 4%?

Agree. TG61 seems absurdly overpriced. At less than a third its issue price two years ago.


With severe curve inversion surely short-dated is better? LT gilts could take years to recover from these levels.


GS

I favour TG50 (for company/ personal) at 0.625% coupon - it is currently yielding ~4.3% out to 2050 and offers about 25 bps more than the TG61s.
For ISA/ SIPP my personal favourite is TRQ4 which offers 4.25% coupon and yield of around 4.35%.

Much depends on your long term view of inflation. If you believe that this inflation spike was temporary (Covid/ QE/ Furlough/ Ukraine) and we go back to a benign picture of <2% then this is a unique opportunity to lock in >30 year risk free yields. If you think that inflation is going to become embedded, then it is worth taking a look at linkers. I'm of the view this inflation spike resulted from a combination of non-repeating factors and we are more likely to be looking at deflationary pressures in 12-24 months - so I favour the long end fixed. I also think the market has underestimated the impact higher rates will have on aggregate demand once savings rates deplete.

The short end of the yield curve does look attractive, but it doesn't really offer any solutions, relative to the current rates of inflation.

2boi2 wrote:Swapping BoI for TG61 with a YTM of 4%?

Ha !

Probably a bit O/T for this thread. TG61 is a short(ish) term trade for me based on the fact that the very low (0.5%) coupon means the price is a highly leveraged play on inflation / base rate. Plus (any) capital appreciation will be tax free - my B&W and BoI prefs are not in tax wrappers.

I find repricing of perpetual PIBS etc lags movements in gilt yields so plan is to switch from TG61 to perpetuals such as SKIP, CVBP, LBS once it has shot up in value.

Also, I am too old to get involved in distressed fixed income these days but TG61 feels like a rare chance to get all the fun of distressed bonds' potential for capital upside without the massive credit risk. So a bit of fun as well and stops me from doing something daft like Metro Bank bonds

I will be voting shortly. Excuse me if this has been covered but I can't see the difference between 2 of the options which Interactive Investor are offering me:

OPTION 2: Tender any or all your bonds, and vote in favour of the offer. Elections must be submitted in multiples of 1,000 bonds. You will be issued with GBP1.92031 in exchange for each bond, comprising a GBP1.88 offer payment and GBP0.04031 in lieu of accrued interest. You will also receive a voting fee of GBP0.02 per bond, subject to the success of the resolution to approve the redemption. Please note that an extension to the acceptance deadline may result in a corresponding adjustment to the payment in lieu of the accrued interest.

OPTION 3: Vote in favour of the redemption. Votes must be submitted in multiples of 1,000 bonds. If the resolution is successful, you will receive a voting fee of GBP0.02 per bond.'''

The official pay date is 25th August 2023. It is expected that the payment and payment in lieu of accrued interest will be made concurrently.

Is there any advantage in option 3, e.g. delayed repayment resulting in more accrued interest? I'm not in a hurry for the cash.

The difference is that with option 2 you lose your bonds at 192% even if the resolution isn’t passed, with option 3, you are voting in favour but if it fails you keep them. If the resolution is passed the outcome is exactly the same. I’ve come round to thinking that even if the sweep up fails option 2 is generous since it is pitched at around 20% above the true capital value and may look even more so in a month when the next interest rate hike bites and FI stuff weakens further. If indeed that comes to pass.

Looks like one down - three to go:-

The following information is for the attention of holders of the Sterling Preference Stock:

· Bank of Ireland Nominee 3 Limited (the "Preference Stock Offeror") has now received valid tenders in respect of more than 80% of the Sterling Preference Stock, 59.62% of which were accepted on 30 June 2023, with the remainder received after 1pm on 29 June 2023. If these additional tenders are accepted by the Preference Stock Offeror following the Deadline, the Preference Stock Offeror will have the right, but not the obligation, to compulsorily acquire (on the same terms) the remaining Sterling Preference Stock that is not owned by the Preference Stock Offeror following the completion of the relevant Offer.

Ends

Here are the results:

https://investorrelations.bankofireland ... ts-RNS.pdf

Looks like success for the Bank of Ireland.

Bank of Ireland have produced an interesting template for redeeming irritating bonds and prefs, I wonder who will be next?

Resounding acceptance of the offer for BOI (88% in favour).

End of an era. As others have noted, OldBoyReturns (Mark Taber) deserves huge thanks for leading the campaign to ensure the survival of these bonds when they were threatened by the Irish government in 2011. The returns since then have been quite outstanding.


GS

I agree. Everyone on here has a great deal to be thankful for when it comes to Mark Taber. A proper unsung hero!