Tender offers Bristol & West prefs and BOI pibs

[JohnEdwards]

Hmmmm....
Bear in mind that these BoI bonds were trading at over 220 as recently as Jan 2022 - and I believe that in time (1-2 years) they will rise, as market rates fall back some way. I also find the experience with NATW recounted above deserves serious consideration - the demonstrable nuisance value of a tail (clearly not available to B&W pref holders).
I REALLY want to hold on to these (BoI) as one of the larger holdings in my SIPP, but of course I don't want to miss out on the 2% 'reward' IF there is a large enough vote in favour of the call option solicitation and I'm forced to sell [is a 75 % majority required - of ALL voting holders?].
I'm tempted to vote in favour as an insurance, but not to tender my holding. However, if every like-minded holder took the same course, the solicitation would be almost certain to succeed!
It's a very cleverly designed form of 'coercion by carrot', which probably gets past the regulators' scrutiny.
Do we know the proportion of holdings in institutional hands? I imagine they would all go for the 2% uplift. It looks as though we won't have the time to see the interim result before having to decide. I haven't heard from HL yet.
HELP!!!

[richydicky]

Searching back through some ADVFn posts I see that there was about 20% acceptance of the NWBD offer. I still have a equal chunk of these to my BOI in my SIPP. The original announcement document of the uptake I cannot find so don't know what the take up was of NATW at the time, not a lot I think, it is a generous income stream. I am tempted to vote no for BOI and see what happens. If the offer was around 220p I would be more tempted. I don't see the point of voting yes and not taking up the offer. Voting no and not getting the 75% required could force them to come back with a more generous offer.

[NealMorris]

I think I am going to vote no. The way I see it I risk loosing a maximum of only £1,100 as I have 55000 of these, but almost certainly risk gaining a lot more (possibly £14,000+), if they are forced to make a sensible offer like already mentioned as NatWest did. I would sooner keep them forever to be frank, but do have to accept they are legacy so that's not on the table. It seems for the sake of a scavenging just a few pennies short term and trying to kid yourself there's better investments somewhere else and essentially throwing the baby out with the bath water may be very costly and unwise move when playing the long view.

[JohnEdwards]

I agree with both the last 2 posts, and I think you've persuaded me to vote against. Do we know if a 75% majority is required - of those VOTING? If so, not voting would be unhelpful.

[GoSeigen]

These subordinated perpetual bonds are being bid at a premium of less than 2% over short-dated gilts at a time when banks are awash with capital and highly profitable.

Announcement of BOI EGM for those with outstanding questions.


GS

[MickR]

I think I am going to vote no. The way I see it I risk loosing a maximum of only £1,100 as I have 55000 of these, but almost certainly risk gaining a lot more (possibly £14,000+), if they are forced to make a sensible offer like already mentioned as NatWest did. I would sooner keep them forever to be frank, but do have to accept they are legacy so that's not on the table. It seems for the sake of a scavenging just a few pennies short term and trying to kid yourself there's better investments somewhere else and essentially throwing the baby out with the bath water may be very costly and unwise move when playing the long view.

Just re read the announcement again

https://www.investegate.co.uk/announcem ... ts/7585624

Forgive me if I'm reading this wrong, but this says that the extra 2% is due IF YOU VOTED, not which way you voted. Therefore. I'm hanging on to mine and voting NO. I' should still get the 2% if they vote goes in favour.

Mick

[PeterGray]

Just re read the announcement again

https://www.investegate.co.uk/announcem ... ts/7585624

Forgive me if I'm reading this wrong, but this says that the extra 2% is due IF YOU VOTED, not which way you voted. Therefore. I'm hanging on to mine and voting NO. I' should still get the 2% if they vote goes in favour.

Mick

I think that's wrong. The table in the RNS shows a 0% voting fee if you vote against.

[BondSquared]

Just re read the announcement again

https://www.investegate.co.uk/announcem ... ts/7585624

Forgive me if I'm reading this wrong, but this says that the extra 2% is due IF YOU VOTED, not which way you voted. Therefore. I'm hanging on to mine and voting NO. I' should still get the 2% if they vote goes in favour.

Mick

I think that's wrong. The table in the RNS shows a 0% voting fee if you vote against.

No.

You do get the Voting Fee for voting, including voting without tendering ("Option 2").

Option 2 can be "‘in favour of’ or ‘against’ the Extraordinary Resolution".

Very fair from BoI, I must say.

https://ww3.linkgroup.eu/bank-of-irelan ... onditions/

https://ww3.linkgroup.eu/media/nzjlrhar ... -bonds.pdf

[JohnEdwards]

Forgive me if I'm reading this wrong, but this says that the extra 2% is due IF YOU VOTED, not which way you voted. Therefore. I'm hanging on to mine and voting NO. I' should still get the 2% if they vote goes in favour.

By Jove, I believe you're right! I think we had just assumed foul play! Well spotted.
However, the EGM notice (which does confirm a 75% majority of those 'attending in person or by proxy' is required, as well as a 2/3 quorum, reduced to 1/3 on a rearranged meeting) lays out a very hard to achieve procedure involving PAPER forms, to be submitted by the Registered Holder by the deadline next week. I still haven't heard ANYTHING from HL, and frankly would be surprised if they made it possible to achieve anything other than a tender of the bonds.

[88V8]

Forgive me if I'm reading this wrong, but this says that the extra 2% is due IF YOU VOTED, not which way you voted. Therefore. I'm hanging on to mine and voting NO. I' should still get the 2% if they vote goes in favour.

So, two-thirds of the outstanding bonds have to be voted, hence the Voting Fee, and of those three quarters have to vote in favour.
Then.... Payment of the Voting Fee is conditional on the passing of the Extraordinary Resolution and the execution by BOI and the Trustee of the Third Supplemental Trust Deed for the implementation of the Extraordinary Resolution.
So if it goes against, no fee, whether you tender or not.

These subordinated perpetual bonds are being bid at a premium of less than 2% over short-dated gilts at a time when banks are awash with capital and highly profitable.

Yes, but, the next price movement will be down, after the next rate rise... then we have to wait until a rate cut is on the cards for the SP to start moving up... how long to get back to the tender price. Two years? There's a lot of short-term thinking at the mo, you only have to look at all the FI ITs being wound up.

I will vote against as I'd like to keep them, but I imagine this has been well trailed with the instos, and will go through.

V8

[BondSquared]

Forgive me if I'm reading this wrong, but this says that the extra 2% is due IF YOU VOTED, not which way you voted. Therefore. I'm hanging on to mine and voting NO. I' should still get the 2% if they vote goes in favour.

By Jove, I believe you're right! I think we had just assumed foul play! Well spotted.
However, the EGM notice (which does confirm a 75% majority of those 'attending in person or by proxy' is required, as well as a 2/3 quorum, reduced to 1/3 on a rearranged meeting) lays out a very hard to achieve procedure involving PAPER forms, to be submitted by the Registered Holder by the deadline next week. I still haven't heard ANYTHING from HL, and frankly would be surprised if they made it possible to achieve anything other than a tender of the bonds.

Have not heard from my custodian yet but I would have hoped that the custodian/CREST member will send one paper form for all bondholders who hold their bonds with them. The only reason why it cannot go electronically is the limitation of CREST of not being able to handle more than one concurrent corporate action:

Bondholders who hold their Bonds in CREST and who are not themselves a CREST Participant can
exercise ‘Option 2’ by arranging for the CREST Participant through which they hold their Bonds to
submit a Paper Instruction Form selecting and completing ‘Option 2’ in respect of such Holders’
Bonds. The Paper Instruction Form must be returned by post to the Receiving Agent, to be received
by the Receiving Agent by no later than (i) the applicable Consent Deadline to be eligible for the
Voting Fee or (ii) otherwise the Voting Deadline. Such Bondholders should note that it will not be
possible to submit Voting Only Instructions electronically in CREST, due to the limitations of the
CREST system in light of the concurrent Tender Offer.

If the custodian doesn't offer the aggregation into a single paper form then they could still submit individual ones, if they can be bothered ...

The Consent Deadline for Option 2 is 02 August for retail investors, not next week, so plenty of time to sort this one out, one hopes.

[JohnEdwards]

The Consent Deadline for Option 2 is 02 August for retail investors, not next week, so plenty of time to sort this one out, one hopes.

Sorry, I misread the Retail date as July! Time even for HL to get their act together. I've written to them today.

I will vote against as I'd like to keep them, but I imagine this has been well trailed with the instos, and will go through.

It would be good to know how much is held by institutions - do we have any idea? Let's hope we get a read on the institutional vote on 29 June.

[PeterGray]

I think that's wrong. The table in the RNS shows a 0% voting fee if you vote against.

No.

You do get the Voting Fee for voting, including voting without tendering ("Option 2").

Option 2 can be "‘in favour of’ or ‘against’ the Extraordinary Resolution".

Very fair from BoI, I must say.

https://ww3.linkgroup.eu/bank-of-irelan ... onditions/

https://ww3.linkgroup.eu/media/nzjlrhar ... -bonds.pdf

Yes, you are right. I misread the table, the left hand column of which at a glance could be read as saying "Did you vote YES, or Vote No, not as just did you vote.

[Padders72]

In which case there seems little downside to voting no then for BOI, since if it has already been sorted behind closed doors with the Instos, it will go through and everyone who voted will get the same 194%. If by some small chance it doesn't, you go back to where you were without the hassle of having to find another home for your funds. Of course common sense suggests if you do continue to hold the price will fall back to where it was last week, or maybe eventually go lower since we may not have seen the end of interest rate rises yet.

[Holts]

Of course common sense suggests if you do continue to hold the price will fall back to where it was last week, or maybe eventually go lower since we may not have seen the end of interest rate rises yet.

My assumption is their number crunchers have decided this is towards the peak of the interest cycle , knowing these no longer count towards regulatory capital , this is the best opportunity in many years to get rid of them .
However we know where they have traded and at a peak of nearly 2.40 we are way off that, the offer for me is not generous enough to persuade me to part with them , yes they are getting harder to trade easily courtesy of these online brokers closing down our options but that is just an irritation, so far at least .

[MickR]

It was interesting reading their Q&A that in justification for the tender price, they quote monthly mid price figures for the last 6 months, showing a price range hovering around the 170 mark. Would be different story if they showed 6 year figures instead

[JohnEdwards]

It was interesting reading their Q&A that in justification for the tender price, they quote monthly mid price figures for the last 6 months, showing a price range hovering around the 170 mark. Would be different story if they showed 6 year figures instead

...or even 18 months!

[FrankSeymour]

A cunning plan by BOI.
I plan to keep mine.
There are only a few of these held by institutions, about half of the 75 million were redeemed by BOI.
The institutions mostly sold.
Retail investors held on I believe and are holders of the majority of the unredeemed bonds.
We will find out the results of the Institutional redemptions in a week or so and have a few weeks to consider.
My personal view is that the majority of the bonds are held by retail customers who will hang on to these.
The forced redemption will fail and BOI will be ieft with a bunch of pensioners who are grumpy.

[BondSquared]

Have managed to get hold of the Paper Instruction Form for voting only (without tendering) for the BoI 13.375% perp, but I'm pretty sure my broker would be thoroughly confused if I send it through just now. But it gives you a flavour of the process to come. Note that this is only the form for bonds held in CREST (via your broker), there's a separate form/process for those holding physical certificates.

https://ww3.linkgroup.eu/media/tgjnvzqz ... ipants.pdf

[Swanmore22]

I hold at AJ Bell and HL
Both are aware but have not sent any voting forms yet.
I will tender all.
192p or 194p on success is ok in current environment ..may not look great given 220 odd a few years ago but that was vs ultra low rates that we are not going to see again .
Has been a great trade but it is time for me to close out,

Swan