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Bank of Cyprus gets shareholder OK to issue €645.33 million perpetual convertibles
By Angela McDaniels
Tacoma, Wash., April 2 - Bank of Cyprus PCL said it received shareholder approval to issue up to €645.33 million of convertible perpetual capital securities.
Shareholders voted on the issuance at an extraordinary general meeting on Thursday, according to a notice from the bank.
As reported in February, the convertibles will be issued via a rights offering, and holders of the bank's 7.5% convertible bonds due 2018 will be invited to subscribe for any leftovers.
Interest on the new convertibles will be fixed at 5.5% until June 30, 2014 and then float at a rate equal to six-month Euribor plus 300 basis points.
The convertibles will have a face value of €1.00 each and will be convertible into ordinary shares at €5.50 per share on March 15 through March 31 and on Sept. 15 through Sept. 30 of each year.
The last conversion period will occur in March 2014.
The convertibles have no maturity date, but they will be callable on any interest payment date from June 30, 2014 onward subject to the consent of the Central Bank of Cyprus.
The bank plans to list the convertibles on the Cyprus Stock Exchange and the Athens Exchange.
Subscription
The bank will offer €11 principal amount of convertibles for every 10 shares held. Shareholders who subscribe can pay either in cash or by exchanging an equal amount of 7.5% convertibles.
Other investors may apply to subscribe for any convertibles not subscribed for in the rights offering. Applications from 7.5% convertibles holders will be given priority.
Cyprus Investment and Securities Corp. Ltd. will be the lead manager.
Proceeds will be used to increase the group's tier 1 capital ratio to an estimated 10% as of Dec. 31, 2009 from 7.2% as of Dec. 31.
The issuer is a banking and financial services group based in Nicosia, Cyprus.
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