Convertibles / Exchangeables

• Anti-dilution adjustments
• Settlement calculations
• Calculation Agency
• Independent Expert
• Calculations Adviser

Anti-dilution adjustments

• Convertible/exchangeable bonds and 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

Settlement calculations

• Many convertibles, exchangeables and capital securities include flexible settlement alternatives for the issuer upon conversion and/redemption of the instrument, by delivering either cash, shares or a combination thereof
• 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 is able to manage its delivery obligations
• In hiring ConvEx to perform settlement calculations, issuers:
• minimise the risk of errors by obtaining external, expert assistance from an independent third party drastically cut the time and internal resources
• outsource responsibility for the calculations to ConvEx
• have the support of a name trusted by the market

Calculation Agency

• 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

Independent Expert

• 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

Calculations Adviser

• 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