Aviva and General Accident Preference shares

[Tara]

Interesting to see here that Aviva’s intended plan was always to pay £1.40 for the Preference shares, and not £1.

“Aviva’s Treasury team, when exploring the possibility of exercising the right to cancel the Preference Shares at par, assumed that although the technical mechanism used would be cancellation at par, Aviva would provide additional compensation to the Preference Shareholders and therefore effectively pay a premium to par. As at 22 December 2017, the working assumption which the Treasury team had adopted was that Aviva would pay 1.4 times the par value of any Preference Shares that were retired.”

https://www.fca.org.uk/publication/fina ... c-2020.pdf

[Alaric]

Interesting to see here that Aviva’s intended plan was always to pay £1.40 for the Preference shares, and not £1.

“Aviva’s Treasury team, when exploring the possibility of exercising the right to cancel the Preference Shares at par, assumed that although the technical mechanism used would be cancellation at par, Aviva would provide additional compensation to the Preference Shareholders and therefore effectively pay a premium to par. As at 22 December 2017, the working assumption which the Treasury team had adopted was that Aviva would pay 1.4 times the par value of any Preference Shares that were retired.”

That assumption didn't seem to have been communicated to the Board, some of whom the FCA report reveals would have been quite happy to try to pay 100 for an asset that holders thought was worth 140 plus.

[bruncher]

Interesting to see here that Aviva’s intended plan was always to pay £1.40 for the Preference shares, and not £1.

“Aviva’s Treasury team, when exploring the possibility of exercising the right to cancel the Preference Shares at par, assumed that although the technical mechanism used would be cancellation at par, Aviva would provide additional compensation to the Preference Shareholders and therefore effectively pay a premium to par. As at 22 December 2017, the working assumption which the Treasury team had adopted was that Aviva would pay 1.4 times the par value of any Preference Shares that were retired.”

https://www.fca.org.uk/publication/fina ... c-2020.pdf

May I ask why you are posting this now? Has the info just been released? I see the Aviva and GA prefs have been rising in the last few days.

[88V8]

Interesting to see here that Aviva’s intended plan was always to pay £1.40 for the Preference shares, and not £1.

May I ask why you are posting this now? Has the info just been released? I see the Aviva and GA prefs have been rising in the last few days.

They sure did.

That FCA snippet was news to me. Does make one wonder about Aviva's internal communication &/or the probity of the BoD.

I have a CA notice from ii today anent the Aviva prefs, must go and take a look at it...

V8

[Redhill]

All my bank and insurance co prefs have been rising recently, not just the AV family. I put it down to the forecasts that inflation would be down to half the current level over the next year or so.