- TIMPB are hybrid securities: Equities 6.75% NON-CUMULATIVE RESET PREFERENCE - type of hybrid security is known as "dollar value conversion". This is the more recent style of hybrid where conversion is virtually determined at maturity not at issue. The face value, usually $100, effectively buys you shares at the market price on the date of conversion.
Typically, dollar value conversion hybrid securities have the following elements: · a set dividend rate over a fixed period (reset period) which at the end of that period can be reset for a new dividend rate and new fixed period;
* issued at $100; · * the holder has the ability to take the new reset terms, convert or, on rare occasions, redeem the face value; · * the holder can convert into the shares at a discount to the current ordinary share price; · * the conversion ratio is into a dollar amount of shares eg $100 worth of the underlying equity.
Due to the variable conversion ratio, the price of these hybrids generally does not react to movement in the share price and hence they are seen as more akin to fixed interest securities. The delta in this circumstance is considered to be 0.
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NJ
TIM Price at posting:
17.5¢ Sentiment: Buy Disclosure: Held
