ΤΡΑΠΕΖΑ ΚΥΠΡΟΥ Δ.Ε.Λ.
CONVERTIBLE CAPITAL SECURITIES ISSUE (TIER 1 CAPITAL)
CONVERTIBLE CAPITAL SECURITIES ISSUE (TIER 1 CAPITAL)
Nicosia, 25 February 2009
THIS ANNOUNCEMENT DOES NOT CONSTITUTE AN OFFER OR INVITATION TO SUBSCRIBE FOR ANY SECURITIES.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, IN ANY FORM, IN OR INTO THE UNITED STATES (INCLUDING ITS TERRITORIES AND DEPENDENCIES, ANY STATE OF THE UNITED STATES AND THE DISTRICT OF COLUMBIA), CANADA, AUSTRALIA, SOUTH AFRICA, OR JAPAN, OR TO ANY OTHER COUNTRY IN WHICH ACCORDING TO THE LAWS OF SUCH COUNTRY, THE OFFER MENTIONED IN THIS ANNOUNCEMENT IS ILLEGAL OR CONSTITUTES BREACH OF ANY APPLICABLE LAW, RULE OR REGULATION. THE SECURITIES MENTIONED HEREIN HAVE NOT BEEN, AND WILL NOT BE, REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY SECURITIES LAW OF ANY STATE OF THE UNITED STATES, AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES EXCEPT PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ?SECURITIES ACT."
At its meeting held today, the Board of Directors of Bank of Cyprus examined, among other matters, the structure of the Group's capital base.
The strategic priorities of the Group for the year 2009 focus on maintaining the Group's strong liquidity position, strengthening capital adequacy, and managing risk effectively.
According to the Group's audited financial statements as at 31 December 2008, the Capital Adequacy ratio (per Basel II requirements) stood at 11,2% and Tier 1 ratio at 7,2%. The core tier 1 ratio stood at 6,5%. The aforementioned ratios are considered satisfactory taking into consideration the Group's risk profile and its healthy balance sheet.
The Board of Directors, taking into consideration the negative economic environment and the importance of maintaining strong and competitive capital adequacy ratios and further strengthening them, has decided to propose to an Extraordinary General Meeting of the shareholders the following:
* Issue of convertible capital securities up to euro 645 million, to be offered via a priority right to subscribe to the existing shareholders, which the Group intends to name "Convertible Capital Securities".
* Appointment of The Cyprus Investment and Securities Corporation Ltd (CISCO) as Lead Manager of the issue.
Within the context of the above, the Bank will take all necessary actions for the approval of the issue by the relevant regulatory authorities.
The proposed issue will further strengthen the Group's tier 1 capital. Specifically, the Group's tier 1 ratio as at 31 December 2009 is expected to increase to 10% from 7,2% at 31 December 2008, based on the Group's strategic plan and taking into consideration the proposed amendments to the European Directive regarding the amount of hybrid capital which can be considered as tier 1 capital (35% of total tier 1 capital).
The proposed terms of the Convertible Capital Securities issue ("the Convertible Capital Securities") include, inter alia:
The Convertible Capital Securities will be issued at par in values of ?1 and multiples thereof.
The Convertible Capital Securities of nominal value euro 1 each, will be offered via a priority right to all registered shareholders in the ratio of euro 11 Convertible Capital Securities for every 10 shares held as at Record Date.
Shareholders may subscribe to the Convertible Capital Securities (based on the priority rights that will be allotted to them) either by paying the consideration in cash or by exchanging existing Convertible Bonds 2013/2018 of an equal nominal value.
The Convertible Capital Securities will bear a fixed annual interest rate of 5,5% for the first five years i.e. until 30 June 2014. In the event that the Convertible Capital Securities are not redeemed on 30 June 2014, the interest rate will be floating and will be equal to the 6-month Euribor in force at the beginning of each interest period plus 3,0%.
The Convertible Capital Securities may, at the option of the holder, be converted into ordinary shares during any Conversion Period. The first Conversion Period is 15-30 September 2010 and the Last Conversion Period is 15-31 March 2014. The Conversion Price has been set at euro 5,50 per ordinary share of nominal value euro 1,00.
Other investors (shareholders or non-shareholders) including the Convertible Bond 2013/2018 Bondholders may apply to subscribe for any unsubscribed Convertible Capital Securities (Rump) that may arise. The consideration for the subscription to the Rump Convertible Capital Securities could be paid in cash or by exchange of an equal nominal value of existing Convertible Bonds 2013/2018. In the Rump, placement applications from Convertible Bond 2013/2018 bondholders will be given priority over other investors' applications.
The Convertible Capital Securities have no maturity date. However, the Convertible Capital Securities may be redeemed in whole at the option of the Bank, at their principal amount together with any accrued interest, on 30 June 2014 or on any other interest payment date thereafter, subject to the prior consent of the Central Bank of Cyprus.
The detailed terms of the issue will be announced along with the invitation for the Shareholders' Extraordinary General Meeting which is scheduled for April 2nd 2009.
Contact details in relation to the Convertible Capital Securities issue:
Cyprus
* The Cyprus Investment and Securities Corporation Limited (CISCO)
Tel. +357 22 121800 Fax. +357 22 338801
Greece
* Bank of Cyprus Investment Division
Tel +30 210 77 65 403, Fax +30 210 77 65 419
Nicosia, 25 February 2009
THIS ANNOUNCEMENT DOES NOT CONSTITUTE AN OFFER OR INVITATION TO SUBSCRIBE FOR ANY SECURITIES.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, IN ANY FORM, IN OR INTO THE UNITED STATES (INCLUDING ITS TERRITORIES AND DEPENDENCIES, ANY STATE OF THE UNITED STATES AND THE DISTRICT OF COLUMBIA), CANADA, AUSTRALIA, SOUTH AFRICA, OR JAPAN, OR TO ANY OTHER COUNTRY IN WHICH ACCORDING TO THE LAWS OF SUCH COUNTRY, THE OFFER MENTIONED IN THIS ANNOUNCEMENT IS ILLEGAL OR CONSTITUTES BREACH OF ANY APPLICABLE LAW, RULE OR REGULATION. THE SECURITIES MENTIONED HEREIN HAVE NOT BEEN, AND WILL NOT BE, REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY SECURITIES LAW OF ANY STATE OF THE UNITED STATES, AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES EXCEPT PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ?SECURITIES ACT."
At its meeting held today, the Board of Directors of Bank of Cyprus examined, among other matters, the structure of the Group's capital base.
The strategic priorities of the Group for the year 2009 focus on maintaining the Group's strong liquidity position, strengthening capital adequacy, and managing risk effectively.
According to the Group's audited financial statements as at 31 December 2008, the Capital Adequacy ratio (per Basel II requirements) stood at 11,2% and Tier 1 ratio at 7,2%. The core tier 1 ratio stood at 6,5%. The aforementioned ratios are considered satisfactory taking into consideration the Group's risk profile and its healthy balance sheet.
The Board of Directors, taking into consideration the negative economic environment and the importance of maintaining strong and competitive capital adequacy ratios and further strengthening them, has decided to propose to an Extraordinary General Meeting of the shareholders the following:
* Issue of convertible capital securities up to euro 645 million, to be offered via a priority right to subscribe to the existing shareholders, which the Group intends to name "Convertible Capital Securities".
* Appointment of The Cyprus Investment and Securities Corporation Ltd (CISCO) as Lead Manager of the issue.
Within the context of the above, the Bank will take all necessary actions for the approval of the issue by the relevant regulatory authorities.
The proposed issue will further strengthen the Group's tier 1 capital. Specifically, the Group's tier 1 ratio as at 31 December 2009 is expected to increase to 10% from 7,2% at 31 December 2008, based on the Group's strategic plan and taking into consideration the proposed amendments to the European Directive regarding the amount of hybrid capital which can be considered as tier 1 capital (35% of total tier 1 capital).
The proposed terms of the Convertible Capital Securities issue ("the Convertible Capital Securities") include, inter alia:
The Convertible Capital Securities will be issued at par in values of ?1 and multiples thereof.
The Convertible Capital Securities of nominal value euro 1 each, will be offered via a priority right to all registered shareholders in the ratio of euro 11 Convertible Capital Securities for every 10 shares held as at Record Date.
Shareholders may subscribe to the Convertible Capital Securities (based on the priority rights that will be allotted to them) either by paying the consideration in cash or by exchanging existing Convertible Bonds 2013/2018 of an equal nominal value.
The Convertible Capital Securities will bear a fixed annual interest rate of 5,5% for the first five years i.e. until 30 June 2014. In the event that the Convertible Capital Securities are not redeemed on 30 June 2014, the interest rate will be floating and will be equal to the 6-month Euribor in force at the beginning of each interest period plus 3,0%.
The Convertible Capital Securities may, at the option of the holder, be converted into ordinary shares during any Conversion Period. The first Conversion Period is 15-30 September 2010 and the Last Conversion Period is 15-31 March 2014. The Conversion Price has been set at euro 5,50 per ordinary share of nominal value euro 1,00.
Other investors (shareholders or non-shareholders) including the Convertible Bond 2013/2018 Bondholders may apply to subscribe for any unsubscribed Convertible Capital Securities (Rump) that may arise. The consideration for the subscription to the Rump Convertible Capital Securities could be paid in cash or by exchange of an equal nominal value of existing Convertible Bonds 2013/2018. In the Rump, placement applications from Convertible Bond 2013/2018 bondholders will be given priority over other investors' applications.
The Convertible Capital Securities have no maturity date. However, the Convertible Capital Securities may be redeemed in whole at the option of the Bank, at their principal amount together with any accrued interest, on 30 June 2014 or on any other interest payment date thereafter, subject to the prior consent of the Central Bank of Cyprus.
The detailed terms of the issue will be announced along with the invitation for the Shareholders' Extraordinary General Meeting which is scheduled for April 2nd 2009.
Contact details in relation to the Convertible Capital Securities issue:
Cyprus
* The Cyprus Investment and Securities Corporation Limited (CISCO)
Tel. +357 22 121800 Fax. +357 22 338801
Greece
* Bank of Cyprus Investment Division
Tel +30 210 77 65 403, Fax +30 210 77 65 419