Convertible meaning

Before assessing whether certain aspects of the income tax and National Insurance contributions (NICs) regimes apply, and if an alternative tax treatment can be chosen, it is vital first to identify the existence of a restricted security in the first instance...

In this issue: Debt capital markets Daily and weekly news alerts New Q&As Useful information Debt capital markets Key points from UK prospectus regime reform consultation On 26 July 2024, the Financial Conduct Authority released a consultation paper setting out proposed reforms to the UK prospectus regime. The proposals would have material implications for initial public offerings and secondary equity issuances where securities are to be admitted to trading on a UK regulated market, such as the main market of the London Stock Exchange, or on a UK multilateral trading facility, including the Alternative Investment Market...

Original news Hosking and another v Apax Partners LLP [2016] EWHC 1986 (Ch), [2016] All ER (D) 193 (Jul) The Companies Court refused an application by the joint liquidators to pause the English proceedings they had commenced, pending the outcome of earlier litigation in the United States. The court decided that a stay was not justified and set out several reasons for that conclusion: It was not appropriate to censure the defendants for blameworthily bringing about parallel proceedings. Any judgment in the US case would not bind the defendants. The fraud allegations ought to be addressed at the earliest sensible opportunity. Nonetheless, a short stay until 3 October 2016 was ordered for case management purposes, given the imminent US ruling on forum non conveniens, which could encourage additional defendants to consent to being joined to the English claim. What was the background to the case? The company was indirectly controlled by a consortium of investors that included the defendants....

The carrier, operating services linking cities across Florida and the Caribbean, entered bankruptcy on 30 December 2024. It explained that opting to transition to a different aeroplane maker severely upended its operations when the replacement supplier failed to consistently provide and timely deliver new aircraft. The company’s funded liabilities are divided between equity owner Versa Capital Management’s US$211m of second-lien borrowings and US$186m in convertible notes held by Brigade Capital Management, which is receiving advice in the matter from Nelson Mullins Riley & Scarborough LLP. Brian P Hall Smith Gambrell Hall serves as a partner with Smith Gambrell and leads the firm’s finance, banking and restructuring practice, based out of its Atlanta office...

Premier Oil is among a number of oil and gas companies that have reassessed their funding options to cope with the effects of an extended period of low crude prices. Brexit impact From exit day (31 January 2020), the UK ceased to be an EU Member State. Nevertheless, under the Withdrawal Agreement, the UK entered an implementation period, during which EU law continued to apply. In many Brexit SIs, references to exit day should be construed as referring to IP completion day (the end of the implementation period, defined in clause 39 as 31 December 2020 at 11.00 pm), unless that wording is expressly disapplied by the relevant SI. For more detail, see News Analysis: Brexit—impact of the Withdrawal Agreement and European Union (Withdrawal Agreement) Act 2020 for R&I lawyers, and Brexit Bulletin—key updates, research tips and resources. While schemes do not fall within the scope of the Recast Regulation on Insolvency, their later recognition frequently depends on Brussels I (recast) (see below and Practice Note: Brexit—impact on...

What is a long-term incentive plan? As set out in the Practice Note: What is a long-term incentive plan?, the awards most frequently delivered under a long-term incentive plan (LTIP) typically comprise: conditional share awards (often referred to in the US as restricted stock units (RSUs)) nil-cost options share appreciation rights (SARs) forfeitable shares, sometimes described as restricted stock A brief summary outline of the likely capital gains tax (CGT) treatment on disposals of shares obtained on the vesting of each LTIP award type is set out below. For more detail and background on the different award types available under an LTIP, see Practice Note: Structure of a long-term incentive plan—Types of awards for further guidance. Please note that this Practice Note proceeds on the basis that, at acquisition of the shares or otherwise on vesting of the LTIP awards, the employee has been fully subject to income tax and, where the shares are readily convertible, national insurance...

What does this Practice Note cover? This Practice Note sets out an explanation of warrants (often termed securitised derivatives) and considers: what warrants are types of warrants key warrant terminology how warrants are listed and offered how warrants are documented, and the differences between warrants and comparable instruments What are warrants? A warrant is a tradeable security that grants the holder the right, but not the obligation, to: buy or sell a specified asset (the underlying asset, or simply the underlying) at a specified price (the exercise price or strike price) on a specified date or dates (the exercise date(s)) A warrant is a type of derivative—its value is derived from the underlying asset and offers exposure to that value without owning the asset. They are sometimes described as securitised derivatives, ie derivatives embodied in securities. A warrant is not a debt security and so has no principal...

£ [ insert number ] [ insert rate ]% convertible [ subordinated ] redeemable loan notes 20[ insert year ] [ insert name of issuer ] Dated [ insert day and month ] 20[ insert year ] Parties [ Insert name of issuing company ], incorporated in England and Wales under number [ insert company number ], whose registered office is at [ insert address ] (the Issuer) Background The Issuer has determined to create up to a maximum nominal amount of £[ insert number ] [ insert rate ]% convertible [ subordinated ] redeemable loan notes, to be constituted as set out in this document...

£[ insert number ] [ insert rate ]% convertible [ subordinated ] redeemable loan notes 20[ insert year ] [ insert name of issuer ] This Instrument bears the date [ insert day and month ] 20[ insert year ]. Parties [ Insert name of issuing company ], incorporated in England and Wales under number [ insert company number ], whose registered office is at [ insert address ] (Issuer) background The Issuer has determined to establish up to a maximum nominal amount of £[ insert number ] [ insert rate ]% convertible [ subordinated ] redeemable loan notes, which shall be constituted in accordance with the provisions set out in this document...

[ On letterhead of the Investor ] Strictly private and confidential [ insert Company name ][ insert Company address ]Date: [ insert date ] SUBJECT TO CONTRACT Dear Directors, Proposed investment of Loan Notes in [ insert name and registered number of company ] (Company) 1 Introduction 1.1 Following our recent conversations, this letter outlines the key terms and conditions on which we have agreed to proceed with an investment by way of loan notes to be issued by the Company (the Proposed Investment). 1.2 The provisions in this letter are not comprehensive and, save for this paragraph 1.2 and paragraphs 5, 6, 7, 8 and 9, are subject to contract and are not intended to be legally binding on the parties. No party shall be legally obliged to proceed with the Proposed Investment unless and until a formal written loan note instrument has been entered into. 2 Loan notes 2.1 The Company shall...