[greeevanz]

Hi guys!

I read about this and am planning to invest a little amount just to try.

http://www.pinoymoneytalk.com/fgens-7-808-preferred-shares/

But I am really new to all these stuff.

Can someone kindly explain in layman's terms the details of it please.

It looks like a good place to start apart from my current mutual fund.

Thanks in advance.

[brutus]

paging master FE

[ferrariEverest]

Mga Sir,
naligaw itong thread, dapat sa Stocks subforum ito nilagay.
saka wala po akong experience sa preferred shares.

Sir greeevanz,
which part of the article is unclear to u?
it's best to contact your bank branch of account (& other banks) to inquire further.

[greeevanz]

@ Ferrari, sorry sir mali yata ang napaglagyan ko ng thread, noob move.

I know a bit about common stock shares, dividends and all, pero di po malinaw sa akin ang preferred shares kasi. Like how does it work, what are the repercussions, is it gonna be complicated for someone like me who has limited information and limited funds to boot. At parang nabasa kodin sa article na hnidi ito nare-redeem? Really facing a blank wall with this hehe.

And I tried to go to my neighouring bank earlier (BPI) where I also have a mutual fund (Phil stock Indez fund) to ask regarding this, pero ala padaw po sila idea about the stuff, to think kilala ko pa personally ung asst. branch mgr.

[ferrariEverest]

wala ko idea e, pero tingin ko hindi sya complicated kasi bibili ka lang then intay mo annual dividends.

try mo mag-inquire sa ibang bank kung available, pati sa mga stockbrokers.


halos pareho lang ang common at preferred shares, offered sila ng mga publicly-traded companies, pero may different characteristics.

base sa article & mga nabasa ko, preferred shares:
-walang voting rights
-pag nagkaroon problema/company liquidation ang FGEN, uunahing bayaran ang owners nitong pref.shares bago yung owners ng common shares.
-sa article,
"“Perpetual” means there is no definite holding period and the company will not redeem the shares.
They are also “cumulative” which means dividends not paid during the year will be added and paid on top of the next year’s dividends.
The shares are “non-convertible” which means owners do not have the option to convert them to common shares."

since 'perpetual' daw sya, d ko rin alam pano ang mangyayari dun.
siguro ita-transform/iko-convert/ire-reclassify ng FGEN itong pref.shares in the future, para ma-redeem or magkaroon ng pagbabago sa paghandle dun sa pref.shares. (example, gagawing redeemable, convertible, etc.)

additional info:
http://en.wikipedia.org/wiki/Preferred_stock
http://www.investopedia.com/terms/p/preferredstock.asp


salamat sa tanong, may natutunan tuloy ako kahit konti 

[greeevanz]

wala ko idea e, pero tingin ko hindi sya complicated kasi bibili ka lang then intay mo annual dividends.

try mo mag-inquire sa ibang bank kung available, pati sa mga stockbrokers.


halos pareho lang ang common at preferred shares, offered sila ng mga publicly-traded companies, pero may different characteristics.

base sa article & mga nabasa ko, preferred shares:
-walang voting rights
-pag nagkaroon problema/company liquidation ang FGEN, uunahing bayaran ang owners nitong pref.shares bago yung owners ng common shares.
-sa article,
"“Perpetual” means there is no definite holding period and the company will not redeem the shares.
They are also “cumulative” which means dividends not paid during the year will be added and paid on top of the next year’s dividends.
The shares are “non-convertible” which means owners do not have the option to convert them to common shares."

since 'perpetual' daw sya, d ko rin alam pano ang mangyayari dun.
siguro ita-transform/iko-convert/ire-reclassify ng FGEN itong pref.shares in the future, para ma-redeem or magkaroon ng pagbabago sa paghandle dun sa pref.shares. (example, gagawing redeemable, convertible, etc.)

additional info:
http://en.wikipedia.org/wiki/Preferred_stock
http://www.investopedia.com/terms/p/preferredstock.asp


salamat sa tanong, may natutunan tuloy ako kahit konti 

Thanks sir.

Palagay ko magre-research muna ako tungkol dito at if everything goes well then I'll take a swim =).

[TSO]

First Gen Corporation (FGEN), the Lopez-owned independent power producer, is issuing to the public up to 100 million Series G perpetual preferred shares for P100 each. The shares guarantee a fixed dividend rate of 7.808% per annum.

The FGEN’s 7.808% preferred shares are non-voting, perpetual, cumulative, and non-convertible shares.

Consider the following:
1. FGEN is essentially raking in a maximum P100B from the issuance proceeds. It is in your best interest to find out what this will be used for, whether you intend on owning these preferred shares or FGEN's common stock. In the case of the former, it's for their ability to pay. For the latter, for their future growth OR their maintenance.
2. Do not mistake that perpetual means FGEN can never redeem the shares even if they wanted to. It just means there is no redemption date, so it is ALSO in your best interest to search for the specific conditions necessary for redemption and, should the company consider this option, how much you will receive for it.
3. Preferred stockholders will receive 7.81 pesos a year in dividends and this will accumulate in arrears whether the company pays it or not. The question is, can FGEN pay for this with internally-generated cash?
4. Because this preferred stock is neither convertible nor voting, there is nothing here that ties the stock to the company's growth. In this case, you may want to consider comparing FGEN's currently outstanding common stock with this offering. Even more so if FGEN is coughing up dividends.
5. Please keep in mind that preferred shares are still junior to any of FGEN's creditors. Owners are the penultimate recipients in any liquidation events (which is highly unlikely given our oligarchic society). There is virtually no security in owning preferred shares in the event of a downturn, but given FGEN's, uhm, reputation, that in itself might be the security. Again, check the fundamentals to determine FGEN's credit history. Owning this may be better than owning its debt securities.

My own two cents on the matter.
Post Merge: May 12, 2012, 01:13 AM

And I tried to go to my neighouring bank earlier (BPI) where I also have a mutual fund (Phil stock Indez fund) to ask regarding this, pero ala padaw po sila idea about the stuff, to think kilala ko pa personally ung asst. branch mgr.
(emphases mine)

t*ngina naman. At sila pa ung mga "finance expert". =_=

*facepalm* I am so ashamed.

[bauer]

TSO explain it well.

If I may add,  I had an FGEN 5 year bond note before at 11%p.a.

[Bp22estafa]

since this will be traded at PSE, you can sell it if your planning to liquidate it right? Does it have a minimum holding period?

[nanashi]

Preferred share is still better if dividend comparison from its commons shares since FGEN only gave a traditional P 1 every year plus if it went broke the value you lend to them will be prioritize and fully paid before common shareholders. Warren Buffet prefer acquiring preferred shares than common shares based on his last transactions. In terms of growth common shares has great capital growth potential and looking at the electric power situation in the country. FGEN is good until 2015 since we have limited supply of electricity at the moment.

[greeevanz]

Thank you so much for the input guys.

I'll wait for our neighbouring bank to have further details about this and if everything goes well I'll go for it.

But feel free to add further inputs po mga kapatid.