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  1. #81
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    I haven't looked through the complete document, but if converted to shares, these shares in Kiwi Bank will be held by KCFL, and we would be paid dividends if/as KCFL are paid dividends by KB. KCFHA holders would not become Kiwi Bank shareholders.
    That's how I read it (but haven't spent much time on it).

  2. #82
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    That's interesting, Grimy, but I wonder how the conversion would work, given that there isn't any market or market price for Kiwibank shares. Perhaps $1 of KCFHA notes becomes $1 of Kiwibank capital?

    Incidentally, we seem to have strayed from ANBHB here!

  3. #83
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    Here we go;
    CONVERSION: If Kiwibank is required to convert some or all of the Kiwibank Perpetual Bonds held by KCFL into Ordinary Shares, the number of Ordinary Shares to be issued to KCFL will be determined by dividing (i) the total of the principal amount of the Kiwibank perpetual Bonds being converted by (ii) the value per share of the existing Ordinary Shares. The value per share of the existing Ordinary Shares will be determined by dividing (i) the value of Kiwibank's net tangible assets by (ii) the number of existing Ordinaru Shares on issue. Unless Kiwibank appoints an independent expert to determine the market value, Kiwibank will determine the value of its net tangible assets by reference to its most recent management accounts and such other information as Kiwibank reasonably considers appropriate.
    However, if this would result in the value per share being zero or a negative number, the value of Kiwibank's net tangible assets will be deemed to be $1 million for the purposes of determining the value per share. Kiwibank is not obliged to appoint an independent expert and it may not be practicable to do so in the circumstances to enable conversion to occur when required.

    So. I guess that didn't really help! There is more information on how Kiwibank in consultation with the RBNZ determine how many bonds would be converted, but my fingers are getting tired!

    Short answer is if the bonds ever have to be converted to shares in Kiwibank (which bond holders will not own), we'll be told the conversion figures at the time.

    Now back to ANBHB!

  4. #84
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    Update on ANZ Capital Notes

    We are writing to update you on your mandatory convertible perpetual subordinated notes (Capital Notes) issued by ANZ Bank New Zealand Limited (ANZ).

    ANZ has been informed by the Reserve Bank of New Zealand (RBNZ) that locally incorporated banks cannot pay dividends on ordinary shares and should not redeem capital notes during the COVID-19 crisis. This decision by the RBNZ was taken to further support the stability of the New Zealand financial system during this period of economic uncertainty.

    ANZ’s capital position remains strong, with total capital of $13.4 billion or 13.6% of risk weighted assets at 31 December 2019.

    This decision meant that on 2 April 2020 ANZ announced on the NZX that the Capital Notes would not be redeemed on the Optional Exchange Date (25 May 2020). In addition, on 17 April 2020 ANZ announced on the NZX that it was not going to exercise its option to convert the Capital Notes into Australia and New Zealand Banking Group Limited (ANZBGL) shares on the Optional Exchange Date.

    The RBNZ’s decision does not affect ANZ’s ability to pay interest on the Capital Notes. Interest is scheduled to be paid quarterly in arrears, is subject to ANZ’s discretion and other conditions as set out in the investment statement, and is non-cumulative.

    The interest rate on the Capital Notes will continue to be 7.20% per annum up until the next interest payment date on 25 May 2020. The interest rate on the Capital Notes will then reset on 25 May 2020 and each quarterly interest payment date thereafter to the sum of the three month bank bill rate plus a margin of 3.50% per annum. We will advise the interest rate for each quarter through a NZX announcement.

    The three month bank bill rate is a wholesale benchmark interest rate, which is determined by market conditions each business day. As a guide, the three month bank bill rate on 20 April 2020 was 0.3733%, meaning the interest rate on the Capital Notes would have been 3.8733% if the interest rate had been set on 20 April 2020.

    As a reminder, the terms of the Capital Notes provide for their mandatory conversion into ordinary shares of ANZBGL on 25 May 2022 (subject to conditions as set out in investment statement). ANZBGL’s shares are listed on the NZX and ASX. Further information on the mandatory conversion will be made available by ANZ to holders of the Capital Notes prior to 25 May 2022.

  5. #85
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    With the mandatory conversion date coming up on the 25th of May next year I am waiting to hear whether these will be repaid then, or prior - 25th Feb 2022? - Won't be happening this month as the record date is today, so only leaves the 25th Feb or 25th May for something to happen.
    With Kiwi Bank repaying their KCFHA bonds this month I was half expecting ANZ to do the same.
    Chris Lee & Partners in a recent newsletter seemed to think repayment may happen before 2022 as well.
    I don't know if ANZ can do anything on dates other than the two remaining dates mentioned, but perhaps as they see the change in stance of the Reserve Bank (which allowed KB to repay their bonds this month) as a regulatory event they can.
    I did start looking through the original documents again this morning, but decided I'll probably receive the repayment before I finish reading it........

  6. #86
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    Repayment date 31st December 2021 - the good old regulatory event clause came through.....
    Last edited by Grimy; 23-11-2021 at 03:29 PM.

  7. #87
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    Pay Day! I've got a few companies on my watchlist, but in no particular hurry to do anything. I usually run pretty much fully invested, but it might not be a bad time to have a little cash for any mis-pricing that may come along.

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