Standard Chartered NonCum preference shares

StanC have just announced that due to their capital raising they will not pay a final div on ordinary shares in Dec. Are they dutybound to pay the full interest on the prefs because they did pay an interim div on the ordinary shares or do they only have to pay on the prefs in line with interim divs and final divs on the ordinary shares? I know they cannot pay any div at all on ordinary shares until full div is paid on prefs but I don't know whether that's on a full year or twice yearly basis.

Also, even if they could axe the div on the prefs are they likely to do so? I see that LLoyds resumed payments on the prefs as soon as the EU rules allowed even though they didn't resume divs on the ordinary shares until a few yrs later.

Comments

  • I am not sure whether they can or cannot axe the dividend (it is all a question of timing as you point out).

    However, I see no likelihood at all that they will not pay the dividend on the prefs - it would be market suicide and they are only not paying on the ordinaries as they have a rights issue going on.

    The pref share prices have not budged.
  • Thanks ODRB. I hope you are right. I see the price actually edged up a little this morning
  • I have been following this one (STAB). The yield is now very close to 7%. Just bought a small amount at 105.625. If you track the price relative to other financial preference shares it is now around 8% lower than what you would expect. I'm hoping that the current decline is connected to the rights issue and continued bad news on the loan book but that it will rebound soon.
  • Yes - if you back off the "built in" accrued, but include stamp duty, yield is 7.01% - increased my holding earlier today - tempted to get even more but need to sit on my hands for a bit
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