! You are not logged in Advisor login Not registered? Register here
Knowledge Centre

Question

What happens on the Maturity Date?

AnswerRating

Approximately 20 Business Days before the Maturity Date, the Issuer will notify Investors of the upcoming Maturity by sending them a Maturity Notice. At Maturity there are two options available to Investors. These options are:

Option 1:
Elect to accept physical delivery of the Delivery Parcel; or

Option 2:
Elect to take advantage of the Agency Sale Arrangement to sell the Delivery Assets and receive the Sale Proceeds.

If Investors do not choose either option, YIELDS2 will automatically default to Option 1. However, please note that Costs and Taxes, including brokerage, will be deducted from the Final Value before delivery of the Delivery Parcel. The option that is likely to be best for an Investor will depend on the Investor's own personal and financial circumstances. Therefore, we suggest you consult your financial adviser in the regard.

Option 1 - Taking physical delivery of the Delivery Parcel
If an Investor wishes to take physical delivery of the Delivery Parcel, they must return the Maturity Date, specifying details of their Settlement Account.

If the Investor does not provide details of their Settlement Account or fails to return the Maturity Notice, then the Issuer will substitute the Delivery Assets for shares listed on the ASX and physically deliver these shares to an Australian nominee to hold on behalf of the Investor.

If physical delivery applies, the Issuer or its nominee will purchase the relevant Delivery Assets (less any Costs and Taxes) and transfer the Delivery Parcel on the Settlement Date either to their Settlement Account or to an Australian nominee.

Option 2 - The Agency Sale Arrangement
If an Investor wishes to take advantage of the Agency Sale Arrangement to dispose of the Delivery Assets and receive the Sale Proceeds, an Investor must:

  • elect the Agency Sale Arrangement option on the Maturity Notice; and
  • return the Maturity Notice to the Issuer by Market Close no later than 10 Business Days prior to the Maturity Date.
Under the Agency Sale Arrangement the Issuer will accept physical delivery, on the Investor's behalf, of the Delivery Parcel on the Maturity Date and will then sell the Investor's Delivery Parcel as the Investor's agent. The Issuer will pay the Investor the Sale Proceeds (equal to the number of Delivery Assets sold multiplied by the Closing Price or the best price achieved by the Issuer's best endeavours) by cheque or directly into the Investor's Nominated Account. Payment will be made within 10 Business Days of the Settlement Date or as soon as reasonably practicable thereafter.
Rating by users

Links

Rate this answer

Was this article useful? Rate it!

Design/Development Copyright © 2007 Future Medium Pty Ltd