Since the UK preferreds are being converted explicitly so RBS does not have to pay the government dividends, this ironically may increase the likelyhood of all divs being suspended. The Gov wants RBS to have more tier 1 capital, and by eliminating the dividend payment to the government, more money to loan. What makes anyone think the UK gov wants a div this quarter?
I am long these, and am hopeful they will continue the dividend -- not continuing the divs sends a negative message to the street and is unduly harsh for the majority of holders who bought these at par. However, I feel that the government getting paid is actually a negative that increases the likelyhood of dividend suspension (if the gov wanted to collect divs, they would not be converting their shares to ordinary).
Still, it is what it is and if RBS survives, these will eventually be worth $25.
In actuality tier 1 capital was better off with gov preferreds included. Gov must have felt tier 1 strong enough to withstand future problems for them to convert to common which reduced that ratio. What worries me is what we uncovered in another thread... not sufficient retain earning to pay. A real bummer...dirty little secret that was just uncovered by some clever posters.