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Lloyds Prefs Buy Back

Posted: March 21st, 2019, 10:13 am
by GN100
2019 Notice of Annual General Meeting. Resolution 25 seeks approval to buy back their preference shares in the market

https://www.lloydsbankinggroup.com/glob ... eeting.pdf

GN

Re: Lloyds Prefs Buy Back

Posted: March 21st, 2019, 11:32 am
by Alaric
GN100 wrote:Resolution 25 seeks approval to buy back their preference shares in the market


Is that a routine resolution they propose every year, or something new?

If they are using the Prefs as part of their regulatory capital requirements, there's a deadline (2026 I think) after which they no longer will count.

Re: Lloyds Prefs Buy Back

Posted: March 21st, 2019, 1:07 pm
by Breelander
Alaric wrote:Is that a routine resolution they propose every year, or something new?


Routine. It was resolution 25 in 2018 and resolution 28 in 2017 here:

https://www.lloydsbankinggroup.com/glob ... eeting.pdf

Re: Lloyds Prefs Buy Back

Posted: March 21st, 2019, 8:04 pm
by PinkDalek
Breelander wrote:
Alaric wrote:Is that a routine resolution they propose every year, or something new?


Routine. It was resolution 25 in 2018 and resolution 28 in 2017 here:

https://www.lloydsbankinggroup.com/glob ... eeting.pdf


Needed annually in view of the this authority shall expire at the conclusion of the next annual general meeting or at the close of business on 30 June 2020, whichever is the earlier, unless such authority is renewed before then.

Re: Lloyds Prefs Buy Back

Posted: March 21st, 2019, 9:11 pm
by GN100
Thanks for your observations. Unfortunately, with the level of trust I have for Lloyds after the ECN case, I find any clauses such as this a concern. One never knows when another drafting infelicitation might rear it's head,

GN

Re: Lloyds Prefs Buy Back

Posted: March 21st, 2019, 9:16 pm
by GN100
One other point that was concerning me. Within Resolution 25 is this clause:-

(iii) the maximum price which may be paid for each Preference Share is an amount equal to 140 per cent. of the liquidation preference of the relevant Preference Share;

What is the liquidation preference - 100p?

GN

Re: Lloyds Prefs Buy Back

Posted: March 21st, 2019, 9:23 pm
by GoSeigen
GN100 wrote:What is the liquidation preference - 100p?


Yes

[EDIT: for the vast majority of sterling pref shares... I think LLOY only have LLPC and LLPD and they are both 100p]

Re: Lloyds Prefs Buy Back

Posted: March 22nd, 2019, 9:01 am
by PrefInvestor
Hi All,

I must say I at least find it an encouraging sign that they intend to eliminate their prefs by buying them back rather than trying to cancel them or going the ECNs route. Might do something to ease peoples minds over the fate of this asset class after the Aviva cancellation threat in March 2018.

I just checked in the prospectus and can confirm that the liquidation preference price for both LLPC & LLPD is 100p. I dont fancy their chances much of buying on the open market at less than 140 though when todays spread (22/3/19) is 143.7/141 for LLPC and and 151.7/147 for LLPD. Not likely to bring the sellers out in droves is it (or push the price up I guess).

I note that it would seem that they are planning to just buy them back on the market (under the radar ?) rather making a formal offer to holders to buy them back, which would surely involve some premium to the price at which they are currently trading.

ATB

Pref

Re: Lloyds Prefs Buy Back

Posted: March 22nd, 2019, 9:20 am
by Alaric
PrefInvestor wrote:I note that it would seem that they are planning to just buy them back on the market (under the radar ?) rather making a formal offer to holders to buy them back, which would surely involve some premium to the price at which they are currently trading.


If they have a self imposed rule of a maximum price of 140, that's going to limit their actions until there's a general rise in interest rates or something happens to knock confidence in these particular Prefs.

Re: Lloyds Prefs Buy Back

Posted: March 22nd, 2019, 9:40 am
by PinkDalek
PrefInvestor wrote:...I note that it would seem that they are planning to just buy them back on the market (under the radar ?) rather making a formal offer to holders to buy them back, which would surely involve some premium to the price at which they are currently trading.


Resolution 25 is an Authority only. It doesn't say this is something they will do. In the same way that Resolution 24. Authority to purchase ordinary shares is an Authority.

Re: Lloyds Prefs Buy Back

Posted: March 22nd, 2019, 9:50 am
by GN100
I am probably being paranoid but following LLoyds conduct with the ECNs they could start to issue statements that would undermine the Pref prices before they started buying in the market. As is obvious my trust in Lloyds is very low.

Re: Lloyds Prefs Buy Back

Posted: March 22nd, 2019, 10:01 am
by AleisterCrowley
I was thinking along those lines - they 'do an Aviva' and depress the prices, then buy back in the market ...

Re: Lloyds Prefs Buy Back

Posted: March 22nd, 2019, 2:54 pm
by GN100
Lloyds also did exactly that with the ECNs and the Regulator made no comment. Of course I am not saying they will but one should always be aware of the possibility.

GN

Re: Lloyds Prefs Buy Back

Posted: May 19th, 2020, 3:56 pm
by XFool
GoSeigen wrote:
GN100 wrote:What is the liquidation preference - 100p?

Yes

[EDIT: for the vast majority of sterling pref shares... I think LLOY only have LLPC and LLPD and they are both 100p]

Everybody always seems to forget LLPE.

Re: Lloyds Prefs Buy Back

Posted: May 19th, 2020, 5:45 pm
by GrahamPlatt
Mention of LLPE caused me to take a peek on Stockopedia. Seems the results of a US tender offer are out today.