Recent Transactions
MORE
Warrants
US$242 Million
Calculation Agent
Warrants
€59 Million
Calculation Agent
Warrants
€116 Million
Calculation Agent
Warrants
€245 Million
Calculation Agent
Warrants
US$557 Million
Calculation Agent
Warrants
US$90 Million
Calculation Agent
Warrants
€198 Million
Calculation Agent
Convertible Bond + Warrants
US$14.8 Million
Calculation Agent
SPAC Warrants
US$225 Million
Independent Valuer
SPAC Warrants
US$225 Million
Calculation Agent
Warrants
US$241 Million
Calculation Agent
Warrants
US$624 Million
Calculation Agent
Warrants
€29.9 Million
Calculation Agent
Warrants
€150 Million
Calculation Agent
CALCULATION AGENCY FOR WARRANTS
The Calculation Agent is appointed by the issuer to perform the calculations required pursuant to the terms and conditions of the transaction.
- If appointed pre-issuance (which is the way we are asked by issuers to operate most of the time), ConvEx can also test the relevant provisions setting out those calculations to ensure these will operate as intended and provide support in drafting of the transaction documentation – and will be named in such documentation as the party formally responsible for performing such calculations (which are formal and binding on all concerned parties).
- If appointed post-issuance, ConvEx can still support the issuer without being named in the transaction documentation) in dealing with calculations under their transaction, operating (and providing guidance on) the documentation as drafted.
WHEN APPOINTED AS CALCULATION AGENT PRE-ISSUANCE, CONVEX DOES THE FOLLOWING:
BEFORE ISSUANCE
see moreDuring the life
see moreON EXERCISE
see more- We undertake a detailed review of the operability of the calculations set out in the terms and conditions, and, if requested to do so, provide comments to ensure that the calculations will be able to be performed:
- as intended and on the basis of clearly observable inputs, removing as much as possible any drafting ambiguity (and the associated risk of a dispute later on); and
- on a timely and accurate basis when they are needed during the life of the transaction.
- We can also assist the issuer and parties working on the transaction in identifying potential issues, for example scenarios in which a calculation might not produce the expected result, for example as a result of the interplay between multiple sections of the documentation.
- Because of our extensive experience we are normally able to find solutions from precedent transactions to help manage these issues, or otherwise can help to craft language that will solve the identified issues.
- We usually provide our comments to the law firms and/or banks working on the transaction, to enable them to take on board the results of our detailed review.
- Using public corporate actions data, we monitor (where possible) for corporate actions and other events which might trigger the need for a calculation to be performed under the terms and conditions of the warrants and notify the issuer as early as possible.
- We ensure that at all times the issuer understands, and is confident in the results of, the determinations we perform as Calculation Agent in accordance with terms and conditions.
- We can perform further calculation simulations as may be requested by the issuer in preparation for the final calculations
- We review the issuer’s draft notices to the market prior to publication, and assist (where relevant) with publication
- We can coordinate with the key information providers, to ensure that the instrument is updated in their systems following any calculations, supporting the issuer by minimising investor queries
- We assist our issuer clients in dealing with investor queries, either directly or with their Investor Relations team
- We are typically responsible for performing all settlement calculations when the warrants are exercised.
- This can include “vanilla” (i.e. share-settled) exercise settlement calculations (as well as more complex settlement calculations, such as net-share or cash settlement).
- Calculations are normally produced on a holder-by-holder basis, with a unique determination for each holder depending on the number of warrants they submit for exercise.
- We coordinate with the trustee/agent and the clearing systems (in each case as applicable) to ensure timely communication and delivery of the shares and/or cash to investors.
- We also support the issuer in answering queries from agents, clearing systems, and investors relating to settlement calculations.
- We take formal responsibility for performing all formulaic calculations required to be made in accordance with terms and conditions, while also ensuring the issuer understands what we are doing.
WHEN APPOINTED AS CALCULATION AGENT POST-ISSUANCE, CONVEX DOES THE FOLLOWING:
WHEN WE ARE APPOINTED
see moreDuring the life
see moreON EXERCISE
see more- We undertake a detailed review of the operability of the calculations set out in the terms and conditions, to ensure that we will be able to perform them on a timely and accurate basis when they are needed during the life of the transaction.
- If the issuer so wishes, we can also undertake a detailed review of all previous calculations (if any) performed prior to our appointment
- If we identify any areas of uncertainty or potential issues, we make note of these so that we can be aware in the event they arise later in the life of the transaction.
- Because of our extensive experience in performing calculations on equity-linked instruments, we are normally able to find solutions to help the issuer manage any issues that arise.
- Using public corporate actions data, we monitor (where possible) for corporate actions and other events which might trigger the need for a calculation to be performed under the terms and conditions of the warrants and notify the issuer as early as possible.
- We ensure that at all times the issuer understands, and is confident in the results of, the determinations we perform as Calculation Agent in accordance with terms and conditions (which the issuer remains formally responsible for, because the documentation does not give us formal responsibility).
- We can perform further calculation simulations as may be requested by the issuer in preparation for the final calculations
- We review the issuer’s draft notices to the market prior to publication, and assist (where relevant) with publication
- We can coordinate with the key information providers, to ensure that the instrument is updated in their systems following any calculations, supporting the issuer by minimising investor queries
- We assist our issuer clients in dealing with investor queries, either directly or with their Investor Relations team
- We support the issuer in performing all settlement calculations when the warrants are exercised.
- This can include “vanilla” (i.e. share-settled) exercise settlement calculations (as well as more complex settlement calculations, such as net-share or cash settlement).
- Calculations are normally produced on a holder-by-holder basis, with a unique determination for each holder depending on the number of warrants they submit for exercise.
- We coordinate with the trustee/agent and the clearing systems (in each case as applicable) to ensure timely communication and delivery of the shares and/or cash to investors.
- We also support the issuer in answering queries from agents, clearing systems, and investors relating to settlement calculations.
- We take formal responsibility for performing all formulaic calculations required to be made in accordance with terms and conditions, while also ensuring the issuer understands what we are doing.
INDEPENDENT EXPERT OPINIONS FOR WARRANTS
Many warrants include reference to a third party to be appointed in future to make certain determinations. Alternatively, such third party is sometimes appointed to support management or the board in a decision it is required to take, or to clarify some uncertainty (or settle a dispute). This might be referred to as an “Independent Advisor”, “Independent Expert”, “Independent Financial Advisor”, “Independent Investment Bank”, or several other names.
The need for an independent expert typically arises in the event of a calculation or other determination which is not set out formulaically in the terms and conditions of the instrument (including any complex determination which might have been seen as unlikely from the start, and as such no party was hired in advance to perform it), or in the event of multiple events triggering an adjustment to the exercise price occurring simultaneously, or more generally in the event of uncertainty (or a dispute) as to how a calculation should be performed.
Our extensive experience and knowledge of equity-linked securities documentation allows us to consider the formulaic provisions, but also to put them into a market context (including any applicable precedents) to assist in clarifying the original intent to arrive at a fair solution. We provide written opinions for the issuer’s reliance.
VALUATION FOR WARRANTS
Certain warrants may require the issuer to mark to market the instrument in their accounts over time, based on market movements.
When we provide valuations for our issuer clients, we approach these with a detailed understanding of the transaction documentation as well as trading of the instrument in the secondary market. As a result, our valuations are both technically accurate and reflect market levels for the instrument, rather than simply technical valuations based on unrelated market data.