Bank of Cyprus has decided to exercise its option to redeem in whole the Capital Securities Series A at par. The redemption date is 20th February 2008. The Capital Securities Series A are of a total amount of CYP65 mln or EUR111 mln and are listed on the Cyprus Stock Exchange.
In addition, the Bank has decided to proceed with one or more issues of new capital securities (hybrid Tier 1 Capital) of a total value of CYP100 mln or EUR 172 mln, with an option to increase the amount to CYP150 mln.
During the period 5 – 20 December 2007, the Bank will proceed with the issue of new capital securities, which it intends to name “Capital Securities issue 12/2007â€. The intended issue will be based on an Information Memorandum which will be addressed to professional investors (as defined in Law 114(Ι)/2005), and to persons who will invest at least EUR50.000 each (or the equivalent amount in Cyprus Pounds), who may be interested in purchasing capital securities of Bank of Cyprus. The public offer of Capital Securities issue 12/2007 will be made in accordance with the provisions of articles 4(3)(a) and (c) of the Public Offer and Prospectus Law of 2005 of the Republic of Cyprus.
The terms of the Capital Securities issue 12/2007 include the following:
The Capital Securities will be issued in Cyprus Pounds at par in values of CYP100 or multiples of CYP100. The Capital Securities will be converted into Euro on 1/1/2008 using the fixed conversion rate of 0,585274.
The minimum amount of investment is CYP30.000.
The Capital Securities will pay interest every three months and will bear a fixed interest rate of 6,00% for the first two interest periods (that is for the first six months) and floating interest rate thereafter, which will be set at the beginning of each three-monthly period and will apply to the specific interest period.
The floating interest rate will be equal to the 3-month Euribor in force at the beginning of each interest period plus 1,25%. On the date of this announcement, the 3-month Euribor stood at 4,75%.
The rights and claims of the holders of Capital Securities have priority over the shareholders of the Bank.
No payment in relation to the Capital Securities will be payable unless the Bank is solvent and will continue to be solvent immediately following such a payment.
The Capital Securities have no maturity date. However, the Capital Securities may be redeemed in whole at the option of the Bank, at their principal amount together with any accrued interest, five years after their issue date or on any other interest payment date thereafter, subject to the prior consent of the Central Bank of Cyprus and provided that they will be substituted with tier 1 capital unless the Central Bank of Cyprus is satisfied that the Bank has sufficient capital adequacy.
If the Bank defers an interest payment for any reason then no dividend payment or any other payment will be permitted on the ordinary share capital or other Tier 1 securities of the Bank until the Bank next makes an interest payment on the Capital Securities.
The investors will always receive interest payments made in respect of the Capital Securities in cash. However, if the Bank defers an interest payment, then any such deferred interest payment must be satisfied by the Bank through the issue of ordinary shares.
The Bank intends to apply to the relevant authorities for the listing of the Capital Securities on the Cyprus Stock Exchange.
Bank of Cyprus has mandated The Cyprus Investments and Securities Corporation Ltd (CISCO) as Manager of the Capital Securities issue.
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