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Balfour Beatty 10.75% Cum Convertible Preference (BBYB)

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

#318085

Postby Wizard » June 12th, 2020, 11:42 pm

Laughton wrote:I too hold ELLA - but I think that Ecclesiastical is one of the companies included in the FCA supported case being brought before the Court to decide on whether insurance policy wordings generally should cover covid19 business interuption claims.

Not sure what sort of impact that would have on ELLA should the Court decide against the insurance industry.

Must be a reason they were included, but to be honest I am surprised that they write that type of policy. See link for a description of their business...

https://www.ecclesiastical.com/about-us/

PS, no holding

88V8
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Re: Balfour Beatty 10.75% Cum Convertible Preference (BBYB)

#319446

Postby 88V8 » June 18th, 2020, 3:13 pm

88V8 wrote:....one's thoughts turn to recycling the cash into the market.

Precycling really, but yesterday added to PMO1. The price has moved up, paid 88%.
Still, as helpfully detailed in #278967 here https://lemonfool.co.uk/viewtopic.php?f ... 6&start=20 the coupon will move up as from May 2021, so the overall running yield is quite nice.
The YTM is I fear, academic, as I doubt they will have the cash to redeem in 2023. And with the coupon already at 8.85%, what will they have to pay for an extension?
Then there's the revised deal with BP... viewed by many as a plus for Premier... well, yes, but surely reflective of their parlous balance sheet; they could no longer afford the original deal and BP couldn't be bothered with finding a new partner.

So, still in punt territory.
Punts; zero carbon. Punts; good.

V8

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

#320335

Postby hiriskpaul » June 21st, 2020, 8:47 pm

I precycled weeks ago, have nothing more to invest at present and I need the BBYB proceeds for other things. I scattered some money around existing holdings, including PMO1, but most went into LLPE, a Lloyds pref maturing on 15/09/24. Not great returns, but reasonably safe, as BBYB was.

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

#320387

Postby everhopeful » June 22nd, 2020, 10:14 am

hiriskpaul why do you say LLPE matures in 2024. I thought it was "irredeemable". Maybe I have missed something.
Also LLPD is yielding slightly more with a smaller spread to buy. I hold LLPD which I also think is irredeemable.

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

#320406

Postby hiriskpaul » June 22nd, 2020, 11:04 am

everhopeful wrote:hiriskpaul why do you say LLPE matures in 2024. I thought it was "irredeemable". Maybe I have missed something.
Also LLPD is yielding slightly more with a smaller spread to buy. I hold LLPD which I also think is irredeemable.

LLPE are perpetual, but redeemable. If they don't redeem in 2024, they have the option of doing so on each 5 year anniversary. They don't have to redeem all of the prefs either, but I think the chances of partial redemption are very unlikely. The Lloyds prefs don't count as CET1 and I am reasonably confident they will want to redeem the whole lot at the first opportunity they have in 2024, but at present I would be happier if they don't choose to redeem. There is a risk of an earlier Aviva style reduction of capital as well, but the downside is much lower with these than with the irredeemable prefs. The redemption option will dampen volatility, which is what I am looking for here in case I want out for some reason.

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

#320407

Postby Alaric » June 22nd, 2020, 11:16 am

hiriskpaul wrote: There is a risk of an earlier Aviva style reduction of capital as well, but the downside is much lower with these than with the irredeemable prefs. The redemption option will dampen volatility, which is what I am looking for here in case I want out for some reason.


With their relatively lower coupon and the redemption option, the price hangs around par anyway. There's still the risk of Lloyds running into financial difficulty and the price dropping as redemption would be at Lloyd's option. It caps the upside though, making the running yield unlikely to fall much below the coupon.
Last edited by Alaric on June 22nd, 2020, 11:21 am, edited 1 time in total.

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

#320409

Postby everhopeful » June 22nd, 2020, 11:17 am

Thanks. That is clear.


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