ConvEx is the leading provider of calculation agency services to issuers of convertibles and equity-linked securities.
Throughout their life, convertible/exchangeable bond instruments will typically require multiple calculations to be undertaken to adjust the conversion price upon the occurrence of certain events and/or to determine what needs to be delivered to bondholders upon conversion/redemption. Issuers are responsible for ensuring that all these calculations are performed correctly and in a timely manner to meet their obligations under the Terms & Conditions of the instrument, and such adjustments are carefully watched by convertible bond investors
CONVERSION PRICE ADJUSTMENTS:
Convertible/exchangeable bonds typically include a broad range of events which can require a change to the conversion/exchange price, including payment of dividends, raising of additional equity or equity-linked capital, stock splits and consolidations
FLEXIBLE OR COMPLEX SETTLEMENT:
An increasing number of convertibles/exchangeables also include flexible settlement alternatives upon conversion and/redemption of the instrument, by delivering either cash, shares or a combination – the determination of the relevant amount of shares and/or cash to be delivered to bondholders is based on complex price-setting processes and formulas
ConvEx provides a report to the issuer every time a calculation is required, ensuring the issuer stays on top of its obligations.
By appointing ConvEx, the issuer will:
- Minimise risk of errors by obtaining external, expert assistance from an independent third party
drastically cut the time and internal resources allocated to performing the relevant calculations
- Have ConvEx take responsibility for the calculations – in the absence of a Calculation Agent such responsibility solely lies with the issuer
- Have support of a name trusted by the market
Unique among calculation agents, our service is:
- Expert – all calculations are performed in-house by professionals with convertible bonds structuring experience with deep understanding of these markets and who understand and can explain the rationale and mechanics behind the adjustments
- Pro-active – we work with our clients before the adjustment event occurs
- Interactive – we show our clients how the calculation will be performed – no surprises
- Advisory-based – we work with our clients to ensure they understand what we are doing
- Cost-efficient – as a specialist firm, we price our services very competitively
Independent Financial Adviser / Independent Expert
The vast majority of equity-linked securities envisage the use of an Independent Financial Adviser or Independent Expert to opine on the fair treatment of bondholders in unforeseen situations. As the leading independent financial institution of international repute in this market, ConvEx is able to provide these expert opinions efficiently and inexpensively in most situations.
Independent advice and valuation
In a relatively illiquid market, with most securities traded OTC, it can sometimes be difficult to identify the real price of the bonds. This can be particularly important for issuers with mark-to-market obligations in their accounts. ConvEx reviews the prices from a variety of market participants, providing the company with a valuation in which it can be confident, including of the bifurcated derivative components. ConvEx is also able to assist issuers with the valuation of private instruments issued in the context of e.g. M&A or restructuring situations, where no market price is available.
ConvEx also provides general advisory services on convertible/exchangeable bonds including structuring, pricing, accounting and restructuring of such instruments.