Perpetual Equity Preference Shares (PEPS)
BOQ PEPS are Perpetual Equity Preference Shares which entitle holders to discretionary, preferred, non-cumulative semi-annual floating rate dividends that are expected to be fully franked. The payment of dividends is subject to certain conditions including availability of profits and the Directors’ discretion.
Bank of Queensland issued BOQ PEPS to provide Bank of Queensland with Non-Innovative Residual Tier 1 Capital as part of its ongoing capital management.
On Friday, 14 December 2007, Bank of Queensland (BOQ) announced that the offer of BOQ Perpetual Equity Preference Shares (BOQ PEPS) that closed on 10 December 2007 was heavily oversubscribed. As a result, BOQ exercised its option to raise A$50 million in oversubscriptions and, therefore, raised A$200 million of new capital.
Bank of Queensland may, with the prior written approval of APRA, choose to redeem the BOQ PEPS on the fifth anniversary of the Issue Date, or on each subsequent Dividend Payment Date, or following the occurrence of a Tax Event or Regulatory Event. After a change of control event, the BOQ PEPS will be redeemed or converted, subject to certain conditions.
BOQ PEPS rank subordinate to all creditors (including depositors) and current RePS holders, equal with current S1RPS holders, and in priority to Ordinary Shareholders.
Moody’s has indicated a credit rating of Baa1 for BOQ PEPS. Standard & Poor’s has indicatively rated BOQ PEPS as BBB-.
PEPS are listed on the Australian Stock Exchange under the code BOQPC and are only available to investors through purchase on the exchange.
Full Terms and Conditions of BOQ PEPS are contained in the Prospectus for the issue of Bank of Queensland Perpetual Equity Preference Shares (“BOQ PEPS”) (PDF 2100kb).
Reset Preference Shares (RePS)
Reset Preference Shares (RePS) issued by Bank of Queensland are a form of hybrid capital. As hybrid capital, RePS are a deeply subordinated security which ranks lower than straight subordinated debt in a liquidation scenario and resembles debt from the perspective that they pay a regular fixed or floating rate dividend. Similar to common equity, however, investor payments are contingent on a range of performance criteria, including a satisfactory level of distributable profits and capital.
Under current APRA guidelines, hybrid equity instruments of up to 20 per cent of total Tier 1 capital can be issued as part of the Tier 1 capital of the Bank.
The dividend rate was reset on 15 October 2005 and will be 5.1240% per annum. On a fully franked basis this rate equates to 7.32% or 1.90% above the five year swap rate. Full details are contained in the attached Terms and Conditions for Reset Preference Shares (PDF 166kb).
RePS are listed on the Australian Stock Exchange under the code BOQPA and are only available to investors through purchase on the exchange.
RePS VWAP and conversion to ordinary shares
The Volume Weighted Average Sale Price of Ordinary Fully Paid Shares sold on the ASX during the 20 business days preceding (but not including) 15 October 2005 was $12.3657. The discounted figure used to calculate the number of Ordinary Fully Paid Shares was $12.0565 ($12.3657 less the 2.5% conversion discount).
The Bank also confirms that 925,789 Ordinary Fully Paid Shares have been issued as a result of the 111,633 RePS converted on 17 October 2005.
Special General Meetings - 1 August 2005
Resolutions were passed at the Special General Meetings to alter the terms of non-cumulative Reset Preference Shares (RePS).
Following are copies of the documents relating to the Special General Meeting:
Series 1 Reset Preference Shares (S1RPS)
Details of the S1RPS offer, including the Information Memorandum and Terms and Conditions, can be found in the Series 1 Reset Preference Shares booklet (PDF 260kb).
In accordance with the relevant terms and condition, Bank of Queensland exchanged all issued S1RPS for fully paid Ordinary Shares in Bank of Queensland on 20 October 2008. For more information please access the S1RPS Exchange Notice (PDF 30kb) released by the Australian Securities Exchange.