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Balfour Beatty 10.75% Cum Convertible Preference (BBYB)

Gilts, bonds, and interest-bearing shares
SKYSHIP
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Re: Balfour Beatty 10.75% Cum Convertible Preference (BBYB)

#177621

Postby SKYSHIP » November 1st, 2018, 2:14 pm

88V8 - you state: "Anyway, the sweetshop is open, if one can tolerate the upcoming capital decline."

That is of course the joy with BBYB, we are talking of a Gross Redemption Yield rather than a straight yield; so no nasty capital loss to accommodate should interest rates really take off.

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Re: Balfour Beatty 10.75% Cum Convertible Preference (BBYB)

#177676

Postby GoSeigen » November 1st, 2018, 7:00 pm

SKYSHIP wrote:88V8 - you state: "Anyway, the sweetshop is open, if one can tolerate the upcoming capital decline."

That is of course the joy with BBYB, we are talking of a Gross Redemption Yield rather than a straight yield; so no nasty capital loss to accommodate should interest rates really take off.


The distinction between BBYB and other preference shares is their duration. Most UK-listed preference shares, being irredeemable, are priced as perpetual instruments at around 6.5% yield currently and have a modified duration of c15 years, making them quite sensitive to yield changes [NOTE: yield changes NOT interest rate changes]. BBYB in contrast has a modified duration of less than two years based on its redemption date, so its price is quite insensitive to yield changes. Yield tends to reflect investors' view of long-term inflation trends, as well as other factors.

BTW, note that unlike bonds, preference shares are subject to capital gains tax. This could be a small additional positive for BBYB where a loss at redemption may be offset against other gains to reduce the holder's CGT liability.


GS

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Re: Balfour Beatty 10.75% Cum Convertible Preference (BBYB)

#177744

Postby 88V8 » November 2nd, 2018, 9:39 am

Well I suppose the guaranteed-so-long-as-they-don't-go-bust 5.7% pa is quite nice, and one is at least guaranteed not to be moored to a slowly sinking ship as FI prices decline, and the 20% CGT offset is useful, so I just bought a biggish chunk.
No liquidity problem, it seems.
Thankyou.

It's hard, deciding what to buy with the uncertainties surround equities, and the decline in FI prices. Even though I'm an income investor, it is somewhat depressing to open one's account and be greeted by a sea of red ink.

V8

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Re: Balfour Beatty 10.75% Cum Convertible Preference (BBYB)

#182246

Postby SKYSHIP » November 22nd, 2018, 10:40 am

XD the 5.375p divi today. PD 1st Jan'19...

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Re: Balfour Beatty 10.75% Cum Convertible Preference (BBYB)

#182399

Postby hiriskpaul » November 22nd, 2018, 8:48 pm

SKYSHIP wrote:XD the 5.375p divi today. PD 1st Jan'19...

I checked the price of these today to see if I might pick up a few more. Was quoted 108 (108.54 including stamp), for a YTM of 4.49%. Declined at that price. It would appear that the price did not drop by the full 5.375p.

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Re: Balfour Beatty 10.75% Cum Convertible Preference (BBYB)

#187247

Postby SKYSHIP » December 16th, 2018, 2:43 pm

In light of Balfour Beatty's (BBY) excellent Trading Update on Friday, I decided that with so much cash I would add to my existing holding in BBYB, the 10.75% CULS maturing Jul'20 - now less than 19 months away.

Buying at 107.95p means 108.54p inc. expenses. At that level the Gross Redemption Yield = 4.46%pa. Not a great return; but in these uncertain times...

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Re: Balfour Beatty 10.75% Cum Convertible Preference (BBYB)

#221872

Postby taylor20 » May 15th, 2019, 6:40 pm

Old thread sorry, Just to add some info on iWeb.

In the process of transferring my account to them, and BBYB they have flagged up as a share they can not transfer as it is DELISTED, so will be on to them tomorrow to see what's up.

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Re: Balfour Beatty 10.75% Cum Convertible Preference (BBYB)

#221877

Postby Alaric » May 15th, 2019, 7:04 pm

taylor20 wrote:In the process of transferring my account to them, and BBYB they have flagged up as a share they can not transfer as it is DELISTED, so will be on to them tomorrow to see what's up.


It's still there if you Google BBYB. Current price 109.16.

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Re: Balfour Beatty 10.75% Cum Convertible Preference (BBYB)

#221881

Postby GoSeigen » May 15th, 2019, 7:09 pm

Alaric wrote:
taylor20 wrote:In the process of transferring my account to them, and BBYB they have flagged up as a share they can not transfer as it is DELISTED, so will be on to them tomorrow to see what's up.


It's still there if you Google BBYB. Current price 109.16.


May you ever grasp the wrong end of the stick!


I don't think he was implying BBYB had been delisted, rather that there is a problem with iWeb's systems, which to me seems the most likely and logical inference.

GS

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Re: Balfour Beatty 10.75% Cum Convertible Preference (BBYB)

#221883

Postby Alaric » May 15th, 2019, 7:14 pm

GoSeigen wrote:I don't think he was implying BBYB had been delisted, rather that there is a problem with iWeb's systems, which to me seems the most likely and logical inference.


That would have been my conclusion as well. It's a likely test of iWeb's customer facing skills as to whether they can escalate the issue to someone who knows and can check that it is not delisted and if "computer says no", can arrange fresh instructions to the computer.

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Re: Balfour Beatty 10.75% Cum Convertible Preference (BBYB)

#221975

Postby taylor20 » May 16th, 2019, 7:10 am

Yes indeed, I'm not too hopeful to be honest!

I suspect if I'm allowed to, because I'm in the middle of transfer (not because they are delisted ;) ), I'll sell them from within my iii account and restart the transfer process.

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Re: Balfour Beatty 10.75% Cum Convertible Preference (BBYB)

#222153

Postby hiriskpaul » May 16th, 2019, 3:20 pm

I have bought BBYB at iWeb and still hold them, but they will not let me buy any more. Never had a sensible explanation on what the problem is. However, they should allow you to hold them, collect dividends and hopefully the redemption amount at maturity. They are just being awkward.

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Re: Balfour Beatty 10.75% Cum Convertible Preference (BBYB)

#222172

Postby Alaric » May 16th, 2019, 4:48 pm

hiriskpaul wrote:I have bought BBYB at iWeb and still hold them, but they will not let me buy any more. Never had a sensible explanation on what the problem is.


I'd suspect the FSA or at a pinch EU Regulations. A Convertible is likely to be classified as something that shouldn't be offered to private investors unless they've been categorised as "experienced" or "high net worth". Many Brokers cannot be bothered.

You can run into similar problems with fixed interest securities issued by Banks that have complicated provisions about defaulting when the Bank's solvency comes into doubt. Or something like that.

So a "computer says no" problem.

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Re: Balfour Beatty 10.75% Cum Convertible Preference (BBYB)

#223409

Postby taylor20 » May 21st, 2019, 12:02 pm

Finally managed to talk to someone at iWeb, BBYB had been marked as 'Withdrawn'. This is "because it is convertible and so classed [by us] as a complex instrument, we don't want to increase our holding at this time".

Suggesting that even if it were possible to get classed as experienced - they as a provider do not want to be holding a lot of complex assets?

Anyway, I'm just going to get iii to sell the shares and continue with the transfer.

Curiously I have another stock they won't accept as it is a 'Complex Asset', I'd would have thought that would be a better classification if it were a "experienced" investors.

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Re: Balfour Beatty 10.75% Cum Convertible Preference (BBYB)

#223500

Postby 88V8 » May 21st, 2019, 7:59 pm

As a matter of interest, why are you leaving ii?
I find them pretty good with oddball stuff.

V8

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Re: Balfour Beatty 10.75% Cum Convertible Preference (BBYB)

#223551

Postby BobGe » May 22nd, 2019, 4:30 am

taylor20 wrote:Finally managed to talk to someone at iWeb, BBYB had been marked as 'Withdrawn'. This is "because it is convertible and so classed [by us] as a complex instrument, we don't want to increase our holding at this time".
Suggesting that even if it were possible to get classed as experienced - they as a provider do not want to be holding a lot of complex assets?

It's not possible to have 'experienced investor' or HNWI status with HSDL / iWeb. They insist to 'protect' their clients from themselves, using their own rule-book, in case, for example, someone like Lloyds should come along and find a way to stitch up retail clients on a product like ECNs. Where products have been retrospectively classified as 'complex' or similarly inadmissible, they will only allow existing holdings (where they can't find a way to offload them, which they did for a number in an exercise around a year ago instructing clients to sell or transfer out).

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Re: Balfour Beatty 10.75% Cum Convertible Preference (BBYB)

#223573

Postby GoSeigen » May 22nd, 2019, 8:49 am

BobGe wrote:
taylor20 wrote:Finally managed to talk to someone at iWeb, BBYB had been marked as 'Withdrawn'. This is "because it is convertible and so classed [by us] as a complex instrument, we don't want to increase our holding at this time".
Suggesting that even if it were possible to get classed as experienced - they as a provider do not want to be holding a lot of complex assets?

It's not possible to have 'experienced investor' or HNWI status with HSDL / iWeb. They insist to 'protect' their clients from themselves, using their own rule-book, in case, for example, someone like Lloyds should come along and find a way to stitch up retail clients on a product like ECNs. Where products have been retrospectively classified as 'complex' or similarly inadmissible, they will only allow existing holdings (where they can't find a way to offload them, which they did for a number in an exercise around a year ago instructing clients to sell or transfer out).


Lloyds are protecting their clients from being stitched up by Lloyds? Interesting concept.


GS

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Re: Balfour Beatty 10.75% Cum Convertible Preference (BBYB)

#224258

Postby SKYSHIP » May 24th, 2019, 4:46 pm

Well, after being a lovely secure home for a good dollop of my SIPP, I decided that 105.3pXD (GRY of 4.66%) was a good opportunity to have cash, so sold yesterday morning.

Sad to see them go, as there is still no other short-dated FI investment giving the same security and yield...

Plenty of interesting high-yielding plays to add to; so re-allocating to top-ups in:

# HCFT - 5.8% and 25.4% discount
# NBDG - in liquidation mode; NAV c95p & GRY of c11%pa to cQ3'20
# TFG - 47% discount & yield of 5.8%

The last two also provide a good currency hedge to the US$


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