RBSs offers on the non-cumalative trust preferred securities was based on the yield (higher yielding was bought out at a somewhat higher price, though there was some grouping -- hypothetically, Fs and Hs might get the same price... but higher than Ls).
Also, per RBS, these securities were/are pari passu with the preferred ADRs. And these were being bought out for cash, unlike the debt conversion offer.
Bank will buy these back at par, only when it can issue new paper (that falls in the same place in their capital structure) for less than they are currently paying.
But from the banks perspective, if it can take out debt at less than 50 cents on the dollar, that is a great deal. If I could pay off my mortgage at 50 cents on the dollar, I would do it today.
Assuming RBS stabilizes and looks like they are around for the long haul, these Preferreds will rise in price to where their yield is commensurate with the market place.
vip, that was a greatt post.... my concern is after the downsizeing will they become a viable co. reguard less im sitting on 26. 4 blocks of res.r which i have no intention of selling a single share... aat this point, divvys pay my bills.. i just droped 48 bucks at dean and delucas 23 of it for a slice of standing rib roast which was on the chewy side but tastey...