Hybrids
The outlook for many 'ordinary' shares is just that, rather ordinary. The economic climate is less than robust in many key economies. Profit growth is on the cards for only a few companies.
So what do investors want? Limited capital downside, a yield and equity upside.
What can deliver on these requirements? Hybrids can.
Hybrids are debt securities (or securities similar to debt, eg preference shares) which carry an interest rate (or something similar, like a preferred dividend) but which give the holder the right to participate in share price growth through conversion to ordinary shares.
Tax and accounting treatments continue to change. The Allens Arthur Robinson Capital Markets Group is on top of those changes and the legal issues.
The legal issues include:
- whether any of the following are needed: changes to the company's constitution, shareholder approvals, ASIC modifications or Listing Rule waivers
- what sort of disclosure document must be prepared; and
- what sort of trust deed is required.
Experience you can count on
The Allens Hybrids team has been involved in many hybrid securities offerings and is well placed to provide efficient and experienced advice. In particular, the Allens Hybrids team advised Westpac on AXA's A$600m Kangaroo tier 1 hybrid note issue, Macquarie Airports Group on the A$444 million jumbo offering of hybrid securities issued by Macquarie Airports Reset Exchange Securities Trust, Burns Philp on its renounceable rights offering of converting preference shares, St.George Bank on its innovative A$300 million offering of non-cumulative, resetting, non-redeemable convertible preference shares (known as PRYMES), Amcor on its A$400 million offering of perpetual resetting convertible notes (called PACRS), and the Southern Cross FLIERS Trust on its acquisition of Floating IPO Exchangeable Reset Securities (or FLIERS) and its subsequent A$600 million offer of units in the Trust which mirrored the terms of the FLIERS.
