Donate to Remove ads

Got a credit card? use our Credit Card & Finance Calculators

Thanks to 87investor,longview,Sussexlad,niord,staffordian, for Donating to support the site

Lloyds 6.475% Prefs LLPE

GN100
2 Lemon pips
Posts: 123
Joined: November 4th, 2016, 10:14 am
Has thanked: 15 times
Been thanked: 14 times

Lloyds 6.475% Prefs LLPE

#338686

Postby GN100 » September 7th, 2020, 9:18 am

Does anyone have a link to a prospectus for the above LLPE prefs? I have emailed Lloyds shareholder questions several times - without a response.

GN

RockRabbit
Posts: 3
Joined: December 31st, 2019, 9:10 am
Has thanked: 53 times
Been thanked: 1 time

Re: Lloyds 6.475% Prefs LLPE

#338694

Postby RockRabbit » September 7th, 2020, 9:53 am

I am unable to post links, but if you google 'lloyds 6.475 prospectus' the top document for me is a pdf documents on the Lloyds site which appears to be what you are looking for.

RR

GN100
2 Lemon pips
Posts: 123
Joined: November 4th, 2016, 10:14 am
Has thanked: 15 times
Been thanked: 14 times

Re: Lloyds 6.475% Prefs LLPE

#338697

Postby GN100 » September 7th, 2020, 10:22 am

Many thanks - have now downloaded

GN

88V8
Lemon Quarter
Posts: 1146
Joined: November 4th, 2016, 11:22 am
Has thanked: 163 times
Been thanked: 335 times

Re: Lloyds 6.475% Prefs LLPE

#338835

Postby 88V8 » September 7th, 2020, 10:47 pm

Callable 15.3.24.
Can pretty much calculate the YTM, unless there is a price bounce facilitating an advantageous early exit.

V8

GN100
2 Lemon pips
Posts: 123
Joined: November 4th, 2016, 10:14 am
Has thanked: 15 times
Been thanked: 14 times

Re: Lloyds 6.475% Prefs LLPE

#338860

Postby GN100 » September 8th, 2020, 7:30 am

Yes, from that prospectus the call is optional but is pretty well bound to happen as these prefs are not any use to them any more for counting towards their ratios. YTM circa 3.4% to be set against a low level of trust for Lloyds.

G

88V8
Lemon Quarter
Posts: 1146
Joined: November 4th, 2016, 11:22 am
Has thanked: 163 times
Been thanked: 335 times

Re: Lloyds 6.475% Prefs LLPE

#338891

Postby 88V8 » September 8th, 2020, 9:38 am

At 3.4% not much point in continuing, unless there are tax considerations. Luckily, I switched from E to D for a yield increase last year.

The nominal spread on E is nearly 7.5%.
On C, I see 6% nominal today, but only 4% on D which is strange as it's the smallest issue. Seems it's just pot luck on the day.

I wonder if the near-par pricing of E will underpin the current prices of C and D.
After all, Lloyds can't redeem E below par, and with E yielding 6.0/6.5% for the next 3+ years, it would be quite a red flag if the yield of C and D fell below, suggesting that Lloyds might be seeking a weasel way to retire them at par.

Anyway, I hold C and D in medium size, so fingers crossed.

V8

GoSeigen
Lemon Quarter
Posts: 2445
Joined: November 8th, 2016, 11:14 pm
Has thanked: 639 times
Been thanked: 655 times

Re: Lloyds 6.475% Prefs LLPE

#338935

Postby GoSeigen » September 8th, 2020, 11:31 am

Funny thread.

First these preference shares, like most, are irredeemable, so there is no question of a redemption. There is however a call option and as GN100 pointed out, the option is very likely to be exercised, and the market certainly has that expectation, with the strongly supported price since 2017 or before. But a call option is not the same as a fixed redemption date: the issuer is at liberty not to take the option.

At the current offered price of 109.75p there is no way these preference shares are going to yield anywhere near 6%. The yield to call is currently 3.5%. That is likely to remain roughly the same but even with yield fluctuations the duration is less than four years so the price will barely move up. There will be no price bounce from here. Far more likely is another steep fall, like in March, which could provide a buying opportunity.

Meanwhile, I'm not sure what spread is supposed to be 7.5%? Not a trading spread because these are quoted today at 107-109.75, probably even better pricing available if one shops around.

LLPE is probably an okay place to put cash which will be required in four years time but I think there will be little excitement for anyone wishing to buy at these prices. Lloyds's non-callable preference shares trade at better yields but of course are perpetual so IMO the risk is much higher.

GS

88V8
Lemon Quarter
Posts: 1146
Joined: November 4th, 2016, 11:22 am
Has thanked: 163 times
Been thanked: 335 times

Re: Lloyds 6.475% Prefs LLPE

#339083

Postby 88V8 » September 8th, 2020, 8:04 pm

GoSeigen wrote:.... I'm not sure what spread is supposed to be 7.5%? Not a trading spread because these are quoted today at 107-109.75, probably even better pricing available if one shops around.

Well, I did say nominal spread, because I saw 102/110, but I have none to sell and didn't try to buy, so I couldn't test the water.

The way I get near 6%, is the way I might look at it as a holder, if I were selling at 102.

I wonder how many are still out there, of the initial placing.

V8

GoSeigen
Lemon Quarter
Posts: 2445
Joined: November 8th, 2016, 11:14 pm
Has thanked: 639 times
Been thanked: 655 times

Re: Lloyds 6.475% Prefs LLPE

#340396

Postby GoSeigen » September 15th, 2020, 12:05 pm

GoSeigen wrote:First these preference shares, like most, are irredeemable, so there is no question of a redemption. There is however a call option and as GN100 pointed out, the option is very likely to be exercised, and the market certainly has that expectation, with the strongly supported price since 2017 or before. But a call option is not the same as a fixed redemption date: the issuer is at liberty not to take the option.


Apologies for the above, I was writing from memory, and relying on a previous poster's reference to a "call option". Having now checked the terms for LLPE, I see LLPE are redeemable, and that the "call" being referred to was in fact the redemption clause. It is LLPD and LLPC which are irredeemable.

Sorry for any confusion.


GS

GoSeigen
Lemon Quarter
Posts: 2445
Joined: November 8th, 2016, 11:14 pm
Has thanked: 639 times
Been thanked: 655 times

Re: Lloyds 6.475% Prefs LLPE

#340402

Postby GoSeigen » September 15th, 2020, 12:20 pm

88V8 wrote:
GoSeigen wrote:.... I'm not sure what spread is supposed to be 7.5%? Not a trading spread because these are quoted today at 107-109.75, probably even better pricing available if one shops around.

Well, I did say nominal spread, because I saw 102/110, but I have none to sell and didn't try to buy, so I couldn't test the water.

The way I get near 6%, is the way I might look at it as a holder, if I were selling at 102.


Okay, I see what you meant, the usual term is "notional" or "indicative" trading spread, as in the suggested price published on various web sites. Best not to rely on those numbers, especially for illiquid securities like bonds, PIBS and preference shares. I always call or check online with my broker for actual pricing.


I wonder how many are still out there, of the initial placing.


Last I saw there were £56m remaining in issue.


GS


Return to “Banking Sector”

Who is online

Users browsing this forum: No registered users and 3 guests