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There is much debate on the bulletin boards as whether Lloyds have redeemed their special purpose internal issue of 6% preference shares to make various other preference shares become discretionary so that they can defer the coupons for 2 years from 31 January 2010 in accordance with the EC State Aid sanctions. Also being asked is whether they must inform the market of they do redeem the preference shares.
I have received some information today which seems to answer the questions. Below is a copy of a recent e-mail from Michael Oliver (Director of Investor Relations at Lloyds) which explains that they will either redeem or amaned the terms of the 2004 Prefs in order to comply with the EC restriction.
-----Original Message-----
From: Oliver, Michael [mailto:Michael.Oliver@LTSB-Finance.co.uk] Sent: 25 January 2010 23:40 Subject: RE: About 2004 prefs We have undertaken a thorough review of our capital securities given the moratorium on discretionary coupons from the EC. The 2004 preference shares that you refer to will be amended or redeemed to ensure compliance with the EC restriction. This will unfortunately mean that there will be no dividends paid on the preference shares referred to below between the 31st January 2010 and 31st January 2012.
We intend to write to investors with regard to this issue.
I hope this clarifies the position.
Yours sincerely,
Michael Oliver As for whether they need to announce redemption my view is that they do. They announced the issue of the 2004 Preference Shares:
http://www.investegate.co.uk/Article.aspx?id=200501041156569664G This announcement was under the old Listing Rule 9.10(a) which was:
9.10 A company must notify a Regulatory Information Service without delay (unless otherwise indicated) of the following information relating to its capital:
Alterations to capital structure (a) any proposed change in its capital structure including the structure of its listed debt securities, save that an announcement of a new issue may be delayed while a marketing or underwriting is in progress (see also paragraph 9.38); The current Lisitng Rule 9.6.4 (from http://fsahandbook.info/FSA/html/handbook/LR/9/6 )
says: LR 9.6.4 06/08/2007 A listed company must notify a RIS as soon as possible (unless otherwise indicated in this rule) of the following information relating to its capital: (1) any proposed change in its capital structure including the structure of its listed debt securities, save that an announcement of a new issue may be delayed while marketing or underwriting is in progress; |
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Lloyds 2004 6% Preference Shares Informationposted 27 Jan 2010 12:31 by Mark Taber |