Preference Shares

[irisng]

Did anybody here has preference shares? Mind to share how it works after maturity?

[Allthepies]

Did anybody here has preference shares? Mind to share how it works after maturity?

some are perpetual, mean it will not be redeemed by the issuer. for those with maturity date, the issuer will redeem at initial value.

[irisng]

some are perpetual, mean it will not be redeemed by the issuer. for those with maturity date, the issuer will redeem at initial value.

Sorry, I'm new to stock market. What happen if it is not redeemed by the issuer? Is there any likely that after the maturity, the issuer will still continue with another 10 yrs but with lower interest?

[Pynchmail]

I think company can choose not to redeem preference share. Similar to company choosing not to do a share buy back. I read somewhere that depending on the terms of the preference share, the way interest is calculated may change that could results in lower interest rate after ten years.

If you are buying preference shares, it is important that you read the terms of the preference shares.

[Rosy]

Read the prospectus.

If you cannot understand, then ask around or avoid it.

[Allthepies]

Sorry, I'm new to stock market. What happen if it is not redeemed by the issuer? Is there any likely that after the maturity, the issuer will still continue with another 10 yrs but with lower interest?

If there a maturity date the issuer must redeem it, unless the company folds. There another type of preference share that after a fixed date and thereafter, the issuer has the option to redeem it. Usuall after this fixed date, there will give a better interest rate.

I think u r looking at bank preference share?

[irisng]

If there a maturity date the issuer must redeem it, unless the company folds. There another type of preference share that after a fixed date and thereafter, the issuer has the option to redeem it. Usuall after this fixed date, there will give a better interest rate.

I think u r looking at bank preference share?

Ya, you are right, I'm looking at the Bank's preference share.

[august]

Ya, you are right, I'm looking at the Bank's preference share.

DBS issued 4.7% NCPS, which gave a clue that the 6% NCPS will be redeemed, which it did. In low interest environment the issuer will most likely redeem at earliest opportunity and reissue new NCPS at lower coupon rate. Currently u can see UOB 5.05% NCPS last traded at 4.65% above par, which suggests to me high possibility it could be redeemed come the fifth yr which is 2013.

[irisng]

DBS issued 4.7% NCPS, which gave a clue that the 6% NCPS will be redeemed, which it did. In low interest environment the issuer will most likely redeem at earliest opportunity and reissue new NCPS at lower coupon rate. Currently u can see UOB 5.05% NCPS last traded at 4.65% above par, which suggests to me high possibility it could be redeemed come the fifth yr which is 2013.

So do you think OCBC will redeem?

[august]

So do you think OCBC will redeem?

OCBC which one?