Bank/Insurance Capital Securities (AT1/RT1)

• Capital Securities with an equity conversion feature typically include a broad range of events which can require a change to the conversion price or exchange property, including
  • Dividends/distributions
  • Equity or equity-linked capital raising
  • Stock splits and consolidations

Most capital securities will change from a fixed coupon to a floating one following the first reset date, if not called. If the floating rate references LIBOR or Swap Rates, the transaction may need our services as Independent Expert for Benchmark Replacement

• ConvEx is highly experienced, having worked on nearly 30 AT1 and RT1 securities.
• When ConvEx is named as Calculation Agent in the terms and conditions of the instrument, issuers benefit from our experience in ensuring their documentation avoids known problems, and we are also responsible for performing the calculations when needed
• Being named up-front allows us to provide this service proactively and at a much lower cost than appointing an Independent Expert or adviser after problems have already arisen

• In the event of a dispute or uncertainty as to a calculation, ConvEx can provide advice or independent expert support
• Our extensive capital markets experience and knowledge of securities documentation allows us to consider the formulaic provisions, but also to put them into a market context to assist in clarifying the original intent to arrive at a fair solution
• Where needed we can provide written opinions for the issuer’s reliance

• If you have issued an instrument without naming a calculation agent in the documentation, ConvEx can be appointed after the fact as Calculations Adviser, to provide a similar level of service as we do to our Calculation Agency clients, providing the service proactively