Standard Chartered 7.375 Pref (STAB) & Standard Chartered 8.25 Pref (STAC)
Posted: June 29th, 2024, 9:54 am
Standard Chartered 7.375 Pref (STAB) & Standard Chartered 8.25 Pref. (STAC)
I have been looking at the wording in the listing documents, articles, AGM, etc of these two Standard Chartered preference shares
Seems to me both STAB and STAC are well protected from any reduction of capital at par as the wording here states this is not possible on a “reduction" of capital "On a winding up or other return of capital (other than a redemption, reduction or purchase by the Company of any of its issued shares)"
I have copied & pasted the relevant pages from the listing particulars below (these are taken from 7.375 pref document but 8.25 pref are similar too)
I would be interested to know if anyone has opinions on this?
Perhaps I have missed something but I think not. As always, do your own research too!
Both STAB and STAC are currently yielding around 6.9% on the offer (after adjusting for accrued).
Also, In the May 2024 AGM the company were Authorised to buy prefs in market at up to 25% above market price (See pages 16 & 17 in link below for more detail). Seems a more generous premium than some other prefs (Aviva’s is authorised up to 5% above market price for instance)
https://av.sc.com/corp-en/nr/content/docs/SC-PLC-Notice-of-AGM-2024-and-Notice-of-Class-Meeting.pdf
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Copied form the LISTING PARTICULARS - Standard Chartered PLC - 100,000,000 7 3/8 per cent. Non-Cumulative Irredeemable Preference Shares
Page 27 - Capital
On a winding up or other return of capital (other than a redemption, reduction or purchase by the Company of any of its issued shares), the assets of the Company available to shareholders shall be applied, in priority to any payment to the holders of Ordinary Shares and in priority to or pari passu with the holders of any other class of shares in issue (other than shares which by their terms rank in priority to the Preference Shares in a winding-up or other return of capital), in payment to the holders of the Preference Shares of a sum equal to the aggregate of:
(i) an amount equal to the dividends accrued thereon for the then current dividend period to the date of the commencement of the winding up or other return of capital, but only to the extent that any such amount was, or would have been, payable as a cash dividend;
(ii) an amount equal to any dividend thereon which has been resolved to be paid on or after the date of commencement of the winding-up or other return of capital but which is payable in respect of a dividend period ending on or before such date; and
(iii) the amount paid up or credited as paid up in respect of the nominal value of such Preference Shares.
Page 76 - Capital
The preference shares are to carry the right on a winding up of the Company or other return of capital (but not, unless otherwise provided by their terms of issue, on a redemption, reduction or purchase by the Company of any of its share capital) in priority to any payment to the holders of Ordinary Shares to the repayment of the nominal capital paid up on the preference shares together with any premium determined by the Directors before allotment (together the "liquidation entitlement"), and to an amount equal to the dividend for the then current dividend period accrued to the date of commencement of the winding up.
I have been looking at the wording in the listing documents, articles, AGM, etc of these two Standard Chartered preference shares
Seems to me both STAB and STAC are well protected from any reduction of capital at par as the wording here states this is not possible on a “reduction" of capital "On a winding up or other return of capital (other than a redemption, reduction or purchase by the Company of any of its issued shares)"
I have copied & pasted the relevant pages from the listing particulars below (these are taken from 7.375 pref document but 8.25 pref are similar too)
I would be interested to know if anyone has opinions on this?
Perhaps I have missed something but I think not. As always, do your own research too!
Both STAB and STAC are currently yielding around 6.9% on the offer (after adjusting for accrued).
Also, In the May 2024 AGM the company were Authorised to buy prefs in market at up to 25% above market price (See pages 16 & 17 in link below for more detail). Seems a more generous premium than some other prefs (Aviva’s is authorised up to 5% above market price for instance)
https://av.sc.com/corp-en/nr/content/docs/SC-PLC-Notice-of-AGM-2024-and-Notice-of-Class-Meeting.pdf
---------------------------------------------------------------------------------
Copied form the LISTING PARTICULARS - Standard Chartered PLC - 100,000,000 7 3/8 per cent. Non-Cumulative Irredeemable Preference Shares
Page 27 - Capital
On a winding up or other return of capital (other than a redemption, reduction or purchase by the Company of any of its issued shares), the assets of the Company available to shareholders shall be applied, in priority to any payment to the holders of Ordinary Shares and in priority to or pari passu with the holders of any other class of shares in issue (other than shares which by their terms rank in priority to the Preference Shares in a winding-up or other return of capital), in payment to the holders of the Preference Shares of a sum equal to the aggregate of:
(i) an amount equal to the dividends accrued thereon for the then current dividend period to the date of the commencement of the winding up or other return of capital, but only to the extent that any such amount was, or would have been, payable as a cash dividend;
(ii) an amount equal to any dividend thereon which has been resolved to be paid on or after the date of commencement of the winding-up or other return of capital but which is payable in respect of a dividend period ending on or before such date; and
(iii) the amount paid up or credited as paid up in respect of the nominal value of such Preference Shares.
Page 76 - Capital
The preference shares are to carry the right on a winding up of the Company or other return of capital (but not, unless otherwise provided by their terms of issue, on a redemption, reduction or purchase by the Company of any of its share capital) in priority to any payment to the holders of Ordinary Shares to the repayment of the nominal capital paid up on the preference shares together with any premium determined by the Directors before allotment (together the "liquidation entitlement"), and to an amount equal to the dividend for the then current dividend period accrued to the date of commencement of the winding up.