Member Info for Bonz1957

My certificate arrived in Thurs post so you should have yours real soon.

Dealings in new shares began on 14/6, so if you hold via Crest they should be showing on your account by now. If you hold your shares in paper form then the new 'paper certificates will be dispatched by 25/6' so any day soon. http://sites.cantos.com/national-grid/10/announcement-may2010/public/content/other/BOL08765BO009_N_final.pdf

Not an easy one this. Hope one of the following helps: http://www.bgplc.com/ http://www.bg-group.com/InvestorRelations/ShareholderServices/Pages/Shares-privatisationanddemergers.aspx http://www.centrica.co.uk/index.asp?pageid=252 The next one is the best as it deals with NG but the file is corrupted and difficult to access. If you are unable to view the link then Google: 'national grid base cost'. You are looking for a PDF titled 'Capital Gains Tax (CGT)' from nationalgrid.com. The link is damaged, but if you click on 'Quick View' it gives you all the details of the merger with Lattice and the base costs of any NG shares you may have received from the leccy companies. It took me a while to find it for you but I'm glad I did as I now have a copy in my files for future reference. Best of luck!!!! I find the best way to avoid all of this is to sell less than £30k in a year and realise less than £10k profit, that way the Tax Man doesn't ask for any details. http://docs.google.com/viewer?a=v&q=cache:gWjTaUbdGb8J:www.nationalgrid.com/NR/rdonlyres/E885105E-EF1A-476C-803E-B19023825A22/41594/CapitalGainsTax.pdf+national+grid+base+cost&hl=en&gl=uk&pid=bl&srcid=ADGEESjbadTWNy_KJl8LQEVfp4Bwr07kd-IEUKfigITHgcO7YSBBKU7JQ_vw6c9mDJ2riubniK7FX3ID14NsHt-2Ob6Fr6QGAaTDYixAbP2Y2Dg9J8bDB_UDSwNWrJEGK3gVyWu7rG-S&sig=AHIEtbTGqcw1nBJ2n1a-VG6-SckQjTI0_Q

If you see the calculation in my last post below I think we are exactly where we should be given the fall in the FTSE and the dilution from the RI, but that is only my opinion so please DYOR. With the demise of BP and it's possible cut back in divs, NG will be one of the best yields around if it is able to keep it at 5.5-6% and grow it at 8% per year.

Think you are being a little unfair. The sp was always going to fall on the announcement of a RI, this is due to the extra shares being in circulation and the very low price you are being offered them at. The fact that you are away on holiday during a RI is hardly their fault - or should they have checked with you first?? There are always ways around that scenario, all you need is your allotment no. and an address to send the cheque to, which you can get from the registrars. And you have not lost the yield on the share. Although the actual div per share will be lower you will have more shares - assuming you took up the RI - so you will still receive the same amount in total. If you don't take up the RI then you will receive a cheque for your rights which will have been sold, so you will in effect have cashed in part of your investment and therefore will receive less of a total div. The div will remain around the 6% level which is one of the best around, and they have stated their intention to continue to grow the div at 8%. Pre the RI and market retrace the shares were trading at 660p. So 5 x 660p + 2 x 335p (RI) =3970/7 = 567p fair price after the RI. The market has fallen 15% since those pre RI highs which takes the price to 567p x 85% = 482p. Which is exactly where we are today. So how have we been screwed?? Am off now to put my chq for the RI in the post.

The yield, currently showing as 6.53% above in the figures below the graphs, changes with the share price. So for the same payout the higher the sp the lower the yield, and visa versa. A yield of 5.9% on todays sp would give you approx 29p per share as a total annual div, which is what I said in a previous answer to billbill relating to what the div would be likely to be after the RI. They have stated that they intend to grow this at 8% per year. What I have done by taking up the RI is to make sure that my % holding of the increased share capital has stayed the same as before. So if my total div last year was worth £900, then this year it will be worth say £970 - if it grows at 8%. I have 40% more shares from the RI but as the value of the div per share will have fallen I will receive the same total div as before. With time, as you say, this money that they have raised will be invested and hopefully lead to increased profits for them and an increased div for us. But this will take time. It is not possible for them to increase their investment next week when all the RI money is received, and immediately pay out an increased div at the end of the year. When their investments start to pay off they will be able to increase the div by more than their anticipated 8% and then we will see the sp increase. With time, if all goes well, the sp will be back up the pre-RI level of 660p and if they are able to keep the yield around 6% we would see a div of approx 40p. The div per share they will pay this year will be less than they paid last year because of the extra shares. But as the sp has fallen - from 660p pre RI to 500p now - the lower div they pay will still represent a yield of between say 5-6%. So if you took up the RI your total div take will be the same. If you didn't take up the RI your total div take will be lower but will still be around 6% on todays sp. If you bought in after the RI your yield will still be 6%, a lower div on a lower sp. Don't really know what else I can say to try and explain what happens to divs and yields after a RI. Guess we'll just have to wait and see what happens when they announce their next set of results and the next div. As ever I'm more than happy to be proved wrong.

Thanks for your confirmation that I haven't yet lost the plot!!!

Think you are confusing their aim to grow divs by 8% per year with the yield which is around 5.5-6%. They have never said that the yield would be 8% as that fluctuates with the sp. The last two divs they have paid were worth 38.49p, so with no RI if they intend divs to grow by 8% then next years would be 38.49 + 8% = 41.57p. As the yield depends on the share price if the sp doubles the yield would halve, but you would still get your 41.57p - 8% up on the previous year. With an extra 40% of shares obviously the money for divs is divided between more shares. If you were in before and took up you rights then your share of the company and the div pot would remain the same. You would have 40% more shares and receive about 30% less div per share but your total div received would be similar or slightly more than the previous year. As you say they have raised the money for investment not to pay it out on higher divs. The return that they will get for their investment will enable them - hopefully - to keep increasing divs year on year by 8% beyond 2013. Hope this answers your query.

Nice to hear from you, and thank you for your kind words. I would never dream of giving anyone advice on what to buy or sell, but hopefully I can offer people a general view of the market and advise on what their options may be, especially with rights issues. Happy investing.

With 40% more shares in circulation the next two divs should be in the region of 29.7p as NG have stated that they intend to grow the payout at 8% per year. On todays sp that would give a very reasonable yield of 5.9%, which of course would fall as - hopefully - the sp increases.

Hope it pays off for you. Just think in the long term 465p for a NG share will look like a bargain. Is there another 20% to be made out of Gold??

I take on board all that say, although not sure I agree that they are raising money just to pay a good dividend. If they plan to invest £22bn over 5 years and are currently generating £3.5bn+ ayear from ongoing operations then the £3.2bn from the RI plugs the gap without adversely affecting their credit rating. As long as we continue to see growth and a div of around 6% then I shall be quite happy. I have enough problems in my portfolio with the oil spill from BP and the threat of strikes from BT. Please don't make me worry about another of my shares!!! At their current level of 500p I have 7 shares worth £35, have paid £6.70 for 2 of them, giving me an equivalent price of 566p for the original 5. This is 13% below the 650p they were a month ago, which coincidentaly is the same % the FTSE is down over the same period. Hopefully with a little more certainty back in the markets, once we have sorted out the PIIGS, N & S Korea, the Gov't cuts, etc, etc, I fully expect this to be trading back over the 600p level soon IMHO.

From what I have read I was under the impression that the reason for this RI was to raise funds towards their proposed £22bn investment over the next 5 years in progressing a plan to set up a transmission network for all of the low carbon electricity production. Both large scale, and the increase in small domestic production ie solar and wind power. The funds raised will enable them to persue this plan without having to compromise their debt/equity ratio and keeps their credit rating at 'A'. I am looking into having a wind turbine installed on my property by the coast. The new Government subsidies - assuming they are not part of the current cuts - are very favourable, both in terms of being paid for all I produce, whether I use it or not, and also additionally being paid for all I export back to the grid.

If you wanted to participate in the RI you still can. You can buy nil-paids NG.N - currently trading at 128.75 - and then pay the 335 cash call. That way, as sid said you will also get the 25p div.

Crashed and Burned!!!!! I actually made reference to the shares going ex-div in a previous post, but it didn't cross my mind that that would be the diff between nil-paid+335 and the current sp. OOPS What a Wally.

As today is the first day the nil-paids have traded they may not have them on their system yet. But it is definitely worth a quick call to check that they will appear on your account, and to ask them when you need to have the 335p's in the account, and then get the money in a day early to make sure you don't miss out.

You cannot buy the rights. The rights are what you were entitled to if you held shares on 19/5. What you can do is to buy the nil-paids - currently trading at 133p - and then arrange to credit 335p into your account by the due date. You will need to speak to Halifax, say that you want to buy the nil-paids, code: NG.N, and ask them when they want you pay in the 335p. Different brokers will have different dates that they want the money by, and this is likeky to be different to the date that your chq would need to be received if you held your shares in certificated form. So please speak to your broker to get details of their timescale. BUT, do remember that just buying the nil-paids entitles you to NOTHING. You still have to pay the 335pcash call for each nil-paid that you buy. Good luck.

The nil paids are currently trading at 129p, add the 335p required to exercise the right and you have a share for 464p. They are currently trading at 489 so a 25p profit. I know there are dealing charges to take into account but it still seems to be a no brainer. Do not recall such a price difference with the recent Lloyds and Nat Express RI's. Please feel free to shoot me down in flames if I've missed something obvious!!!

Now you have your nil-paids you have FOUR choices. 1) You can take up those rights by paying 335p per share, either by chq by the due date if you hold in certificated form, or by arranging to put cash into your broker account. 2) You can arrange to sell all of your nil-paids, these have the code NG.N and are currently trading at 126.75. 3) You can arrange to sell some of your nil-paids in order to raise enough cash to purchase the remainder of the rights. This is called 'Tail Swallowing' and at current prices you would need to sell approx 73%. 4) You can do nothing. In this case at the end of the RI, NG will arrange to have your nil-paids sold and will send you a chq for the proceeds less their costs. Of course if you think this is a good opportunity to invest in a solid company then of course you can buy more nil-paids. BUT remember you have to pay the 335p call by 11th June - I think - please allow time for your payment or chq to arrive by the due date.

My view on the immediate fall in sp after the RI was announced was that it was largely due to being marked down due to the fact that new investors buying in after the announcement would not be eligible for the RI. I think it will be interesting to see how the nil-paids fare when they start trading tomorrow morning, that will give a pretty good indication of how the markets favour this RI. They have stated that they intend to grow the div at 8% until 2012, after which the benefits of this infrastructure investment will provide further growth for shareholders. Steve Holliday CEO states that the main reason for this RI is to help fund an anticipated £20+bn investment programme over the next 5 years without harming their current financial footing. As you say it will be hard to track this in a very volatile market, but as I am in this for the long term I will sit on what I have and possibly look to increase my holding. It would be very nice if this performed as well after the RI as my take-up of the recent Nat Exp RI has turned out.