Bank South Pacific announced that it has launched an issue of mandatory convertible notes to “sophisticated” investors in Fiji.
Post Courier
Wed, 10 Mar 2010
PORT MORESBY, PNG ---- Bank South Pacific announced that it has launched an issue of mandatory convertible notes to “sophisticated” investors in .
The notes have a three year term, a coupon of 7 per cent and are mandatorily convertible to Fiji Class Shares on maturity in 2013 and in certain circumstances at earlier dates.
The issue is for a minimum subscription of $F5 million but BSP may accept oversubscriptions depending on the level of demand.
The notes have been issued on the basis of 10 shares for one note and priced at $F5.25 per note. This equates to K7.67 per note at the dollar selling rate of 1.44. In the five trading days to last Thursday, the volume weighted average price of BSP shares on POMSoC was 74t.
The notes will be issued by BSP Convertible Notes Limited, a special purpose company registered in and a wholly owned subsidiary of BSP established for the single purpose of acting as the issuer of the notes and subsequent class shares.
The class shares to be issued on conversion of the notes are a special class of shares that are denominated in dollars but give a holder certain economic rights based on the ordinary shares of BSP.
They will receive an equivalent dividend expressed in dollars, have equivalent rights with BSP shareholders in winding up and will have their rights adjusted to reflect capital reconstruction events that might apply to BSP in the future.
BSP chief executive officer Ian B. Clyne explained that this type of issue had been reasonably common in other parts of the developed world, more notably between and .
However, he pointed out that this is the first of issue of this type and structure to be launched in the Pacific. “It is”, he said, “an important development in capital market activity in the region. The issue has required close consultation by BSP with Bank of Papua New Guinea and the Reserve Bank of where BSP has fully complied with all conditions for approval.”
Application has been made for the notes to be listed on the South Pacific Stock Exchange and when converted, to also list the underlying class shares.
BSP chairman Noreo Beangke said that the issue of the notes evidenced a new maturity of capital markets in the Pacific and it indicated the capacity of regulators in the region to capably deal with the more complex capital market transactions.
