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Re: Preference shares -- keeping it simple
Posted: November 13th, 2020, 6:07 pm
by ChrisNix
AleisterCrowley wrote:Gan020 wrote:It is the nature risk analysis. Most of the popluation underestimate risk and overestimate opportunties.
In the case of shares, bonds and everything else to do with the stock market it is apparent to me that 95% of investors do not read a set of company accounts, let along read every word of the bond or pref share prospectus. We know this because of the large number of questions that get asked.
In the case of the RSAB prefs, downloading the listing pariculars from RSA's website gives us some insight into this because you do not get a clean pristine document from the day it was published. What you get instead is interesting because someone has used a computer generated day-glo highlighter on it in 4 places.
I will not touch RSAB unless it goes much closer to par, mainly because if I want a 5.5% yield I can get that with much lower risk to my capital.
The RSAB particulars state that pref holders have a right to vote at any EGM affecting them
It's not clear (to me) if that vote is limited to pref holders or pooled with holders of ordinary shares. In the latter case I guess the ordinary share holders may vote to redeem the prefs at par if it benefits them
AC,
You are right. All shareholders (ords and pref's) can vote and from memory the ords can easily outvote the pref's.
Chris
Re: Preference shares -- keeping it simple
Posted: November 13th, 2020, 6:32 pm
by AleisterCrowley
I have a moderate dollop* of RSAB, so somewhat concerned that it may go to a vote where the pref holders' preferred outcome is diametrically opposed to that of the ord holders
I will dig out the particulars. I guess buying some ordinary shares would be a hedge ?! :-0
*this is a technical term that only Finance Professionals will understand
Re: Preference shares -- keeping it simple
Posted: November 13th, 2020, 9:18 pm
by OwenSwansea
Meanwhile, Aviva Prefs have had a very good week!!!!!!!!!
Owen.
Re: Preference shares -- keeping it simple
Posted: November 16th, 2020, 3:21 pm
by AleisterCrowley
Rightly or wrongly I sold my RSAB this morning. That's normally a good sign that that they are going to go up
Re: Preference shares -- keeping it simple
Posted: November 19th, 2020, 8:50 am
by ChrisNix
Offer for RSA contains no offer for RSAB, nor are there any undertakings in respect of same.
Chris
Re: Preference shares -- keeping it simple
Posted: November 20th, 2020, 9:26 am
by OwenSwansea
Meanwhile, in the real world, RSAB are going up!
Owen.
Re: Preference shares -- keeping it simple
Posted: November 20th, 2020, 9:41 am
by AleisterCrowley
I got 126p for mine net. Happy to miss out on whatever gains are ahead - rather than worrying about a potential £650 loss if they are cancelled at par
Re: Preference shares -- keeping it simple
Posted: November 23rd, 2020, 10:16 am
by stockton
OwenSwansea wrote:The word “Irredeemable” only has one meaning, and I think we all know what that is..................
Owen.
The word "irredeemable" clearly has two distinct meanings - which is why it should never appear in a prospectus.
Anyone using it in a prospectus is clearly at risk of a court deciding that the opposite meaning is appropriate in the relevant context.
Re: Preference shares -- keeping it simple
Posted: November 23rd, 2020, 10:29 am
by scrumpyjack
Once RSA has been taken over, the acquirers will own all the equity shares and presumably can then easily, and probably with minimum fuss and publicity, vote to redeem the pref.
From their point of view there is no point in raising this issue in the takeover documents. Better to leave it 6 months and then just do it.
Re: Preference shares -- keeping it simple
Posted: November 23rd, 2020, 12:05 pm
by OwenSwansea
If the word Irredeemable “clearly has two meanings” the English language is no longer suitable for use in legally binding contracts.
Which language should be used from now on, Welsh perhaps?
Owen.
Re: Preference shares -- keeping it simple
Posted: November 23rd, 2020, 12:15 pm
by AleisterCrowley
Klingon
Re: Preference shares -- keeping it simple
Posted: November 23rd, 2020, 12:19 pm
by GoSeigen
OwenSwansea wrote:If the word Irredeemable “clearly has two meanings” the English language is no longer suitable for use in legally binding contracts.
Which language should be used from now on, Welsh perhaps?
Owen.
Practically every word in your two sentences above has more than one meaning. Get a life, man!
GS
Re: Preference shares -- keeping it simple
Posted: November 23rd, 2020, 3:54 pm
by OwenSwansea
GoSeigen,
Certain words may have two meaning, however “Irredeemable” is not one of them.
Owen.
Re: Preference shares -- keeping it simple
Posted: November 23rd, 2020, 6:04 pm
by ChrisNix
OwenSwansea wrote:GoSeigen,
Certain words may have two meaning, however “Irredeemable” is not one of them.
Owen.
irredeemable
/ɪrɪˈdiːməb(ə)l/
adjective
1.
not able to be saved, improved, or corrected.
"so many irredeemable mistakes have been made"
2.
(of paper currency) for which the issuing authority does not undertake to pay coin.
NQED?
Chris
Re: Preference shares -- keeping it simple
Posted: November 23rd, 2020, 6:36 pm
by OwenSwansea
ChrisNix,
Whatever the context is in which you use the word Irredeemable, it only has one meaning, and everyone knows what that is.............
Owen.
Re: Preference shares -- keeping it simple
Posted: November 23rd, 2020, 8:04 pm
by stockton
Interesting page here
https://dictionary.cambridge.org/dictio ... redeemablewhere they provide a ChrisNix type definition but then provide examples which suggest the opposite definition.
IRREDEEMABLES
bonds that pay interest but have no agreed date on which the borrower must pay the lender:
"Irredeemables have no redemption date at all, so that interest on them will be paid indefinitely."
Re: Preference shares -- keeping it simple
Posted: November 24th, 2020, 3:37 pm
by ChrisNix
stockton wrote:Interesting page here
https://dictionary.cambridge.org/dictio ... redeemablewhere they provide a ChrisNix type definition but then provide examples which suggest the opposite definition.
IRREDEEMABLES
bonds that pay interest but have no agreed date on which the borrower must pay the lender:
"Irredeemables have no redemption date at all, so that interest on them will be paid indefinitely."
In Bonds (the reference) that is probably right.
In pref's, because they are subject to general right under companies act for companies to be able to return capital, it would not be correct.
Interesting to ponder if there is any reason why a company would be prevented from returning half the par value of a preference share -- ordinary returns are usually for a proportion of capital paid up?
Chris
Re: Preference shares -- keeping it simple
Posted: November 24th, 2020, 3:43 pm
by GoSeigen
OwenSwansea wrote:GoSeigen,
Certain words may have two meaning, however “Irredeemable” is not one of them.
Owen.
Irredeemable has many meanings: your understanding of English seems even more rudimentary than your understanding of preference shares! If you want to understand the rights attached to preference shares you need to read their terms and the law which governs them as per the OP of this thread.
GS
Re: Preference shares -- keeping it simple
Posted: November 24th, 2020, 3:48 pm
by GoSeigen
stockton wrote:Interesting page here
https://dictionary.cambridge.org/dictio ... redeemablewhere they provide a ChrisNix type definition but then provide examples which suggest the opposite definition.
IRREDEEMABLES
bonds that pay interest but have no agreed date on which the borrower must pay the lender:
"Irredeemables have no redemption date at all, so that interest on them will be paid indefinitely."
Stockton even more lost than OwenSwansea! OS's [mistaken] point was that there is ONLY ONE meaning to the term IRREDEEMABLE.
You quoted the meaning of an entirely different word "irredeemables" which is a noun not an adjective, and the quote refers to bonds, not preference shares.
Wake up at the back!
GS
Re: Preference shares -- keeping it simple
Posted: November 24th, 2020, 4:59 pm
by OwenSwansea
Fortunately, a rudimentary knowledge is all you need to understand the rights attached to Preference Shares. They are not that complicated.
Ambiguous Prospectuses are the problem!
Owen.