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FRB25 - Notice Requesting Written Consent from FRB25 Noteholders by way of an Extraordinary Written Resolution
FirstRand Bank Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1929/001225/06)
Issuer code: FRII
Bond Code: FRB25 ISIN: ZAG000157512
(FRB)
NOTICE REQUESTING WRITTEN CONSENT FROM FRB25 NOTEHOLDERS BY WAY OF AN
EXTRAORDINARY WRITTEN RESOLUTION
FirstRand Bank Limited (the “Issuer” or “FirstRand Bank”) issued, in aggregate, R3,461,000,000.00
Additional Tier 1 Capital Notes with the stock code FRB25 (ZAG000157512), under its
ZAR100,000,000,000.00 Domestic Medium Term Note Programme dated 1 November 2018, pursuant
to Applicable Pricing Supplements with issue dates of 19 March 2019, 18 April 2019 and 5 July 2019
(“FRB25 APSs”). The Issuer hereby gives notice to all Noteholders holding Notes with the stock code
FRB25 (the "Relevant Noteholders"), issued by the Issuer under its ZAR100,000,000,000.00 Domestic
Medium Term Note Programme dated 1 November 2018 (the "Programme Memorandum") in
accordance with Condition 20 (Amendment of these Conditions) of the Programme Memorandum
governing the Notes (the "Conditions"), that the Issuer proposes to amend the Conditions of the Notes
with the stock code FRB25 (the "Relevant Notes" or the “FRB25 Notes”) as set out in Annexure B to
the Notice disseminated by Strate Proprietary Limited (“Strate”) (the "Proposed Amendments") and
requests the consent of the Relevant Noteholders by extraordinary written resolution ("Extraordinary
Written Resolution") of Noteholders holding not less than 66.67% in Nominal Amount of the Relevant
Notes Outstanding in the FRB25 Series of Notes.
Capitalised terms and expressions used and not otherwise defined herein, shall bear the meanings
ascribed thereto in the section of the Programme Memorandum titled "Interpretation".
WHEREAS
1. The Relevant Notes in their current form are accounted for as a liability and, because they are
Additional Tier 1 Notes, are written off if a ‘Trigger Event’ occurs. The distinguishing feature
between notes classified as equity and those classified as a liability is that, in addition to the
standard ‘Trigger Event’ that states that the instruments will be written off at the discretion of
the “Relevant Authority” (currently the Prudential Authority), instruments accounted for as a
liability include an additional trigger event – i.e. are written off when the Issuer’s Common Equity
Tier 1 (CET1) ratio equals or is lower than 5.875% (the “Hard-Trigger”). Following feedback
from the year end accounting process the Issuer was required to account for the Relevant Notes
as equity instead of as a liability, given that the redemption and coupon payments are at the
discretion of the Issuer. Therefore, it is no longer necessary to include the additional Hard-
Trigger in the FRB25 APSs.
2. It would be more advantageous to the Relevant Noteholders, if the Relevant Notes are to be
accounted for as equity instead of a liability, as this will remove the additional Hard-Trigger,
effectively reducing the circumstances in which a write off could occur. The trigger that provides
for the Relevant Notes to be written off at the discretion of the Relevant Regulator would remain
(as it is applicable to both equity and liability accounted notes).
3. The Issuer therefore wishes to amend item 43 of the FRB25 APSs to reflect that the Relevant
Notes will be accounted for as equity instead of as a liability. This will result in a change of the
definition of “Trigger Event”, to, the earlier of:
a) a decision that a Write Off, without which the Issuer would become non-viable, is
necessary as determined by the Relevant Authority; or
b) a decision to make a public sector injection of capital without which the Issuer would
become non-viable as determined by the Relevant Authority.
4. In terms of Condition 20 (Amendment of Conditions), the Issuer may amend the Conditions with
the prior sanction of an Extraordinary Resolution of Noteholders.
5. The Issuer accordingly requests that the Relevant Noteholders approve the Extraordinary
Written Resolution (set out below) to amend the Conditions of the Relevant Notes.
"It is hereby resolved by the Noteholders by Extraordinary Written Resolution that the terms
and conditions of the FRB25 Notes be amended in accordance with Annexure B to the notice
requesting this extraordinary written resolution with effect from the date on which the Issuer
receives confirmation that Noteholders holding not less than 66.67% in value of the aggregate
Outstanding Nominal Amount of the FRB25 Notes have voted in favour of the Proposed
Amendments."
6. The Extraordinary Written Resolution will automatically be approved and passed in relation to
the FRB25 Notes if and when Relevant Noteholders holding between them Relevant Notes
representing at least 66.67% in value of the aggregate Outstanding Nominal Amount of the
FRB25 Notes have voted in favour of the Proposed Amendments. There are no restrictions
imposed on the Relevant Noteholders in respect of voting for and passing of the Extraordinary
Written Resolution.
7. The date that the Issuer has selected to determine which Noteholders recorded in the Register
will receive this notice, is Friday, 27 September 2019. The Noteholders are required to sign the
Extraordinary Written Resolution and deliver a signed copy thereof by not later than 17h00 on
Thursday, 31 October 2019 as set out in paragraph 9 below.
8. In terms of Condition 21.3, a Noteholder may by an instrument in writing (a "proxy form") signed
by the Noteholder or his duly authorised agent or, in the case of a juristic person, signed on its
behalf by a duly authorised officer, appoint any person (a "Proxy") to act on its behalf in
connection with any proposed resolution. A person appointed to act as Proxy need not be a
Noteholder. A proxy form is attached as Annexure C to the notice disseminated by Strate for
those Noteholders who wish to be represented by proxy in responding to this request for
approval. Please note that the proxy form must be delivered to the relevant Central Securities
Depository Participant and the Issuer, together with or prior to the delivery of the signed
Extraordinary Written Resolution of that Noteholder.
9. The signed Extraordinary Written Resolution must be lodged with the relevant Central
Securities Depository Participant for each Noteholder (that provided such Noteholder with this
notice) by no later than Thursday, 31 October 2019, as follows:
(a) in respect of the relevant Central Securities Depository Participant, a copy of such
Extraordinary Written Resolution must be e-mailed to the relevant Central Securities
Depository Participant (with the original to follow shortly thereafter); and
(b) on receipt of the Extraordinary Written Resolution the relevant Central Securities
Depository Participant will notify Strate of the total Nominal Amount Outstanding of the
Relevant Notes that have either signed the Written Special Resolution and voted for or
against the Extraordinary Written Resolution or abstained from voting, by e-mail to
Strate-CDAdmin@strate.co.za.
10. A copy of each signed Extraordinary Written Resolution must also be e-mailed to the Issuer,
for the attention of Mrs Delia Patterson at the following email address:
Delia.Patterson@rmb.co.za and provide a copy to the attorneys of the Issuer, Edward Nathan
Sonnenbergs Inc. for the attention of Amal Nagia at the following email address:
anagia@ensafrica.com.
The Annexures to the notice, being the proposed written resolution, the supplement to the FRB25 APS
and the proxy form are available in the notice disseminated by Strate.
3 October 2019
Debt Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Date: 03/10/2019 11:30:00
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