Q: Hi
I am sorry to have to ask another question about the recent WTS issue of CSU.
I currently own 7 * $100 Unsecured SUB FLTG RT SI with a date of Mar 31 2040 and with a cost of $765 and a MV $955. I also CSU.RT of 40 with MV @ .75 and recently received notification of WTS of 40 at no value. My question is what must I do by Sept 29 if hang onto my current debentures will they lose value ? do I have to do something with the 40 CSU.RT that I have or the 40 WTS just issued. Should I just sell the current debentures on the open market. Totally confused by this despite reading all the recent questions and answers on your website.
Thanks
Kathy
I am sorry to have to ask another question about the recent WTS issue of CSU.
I currently own 7 * $100 Unsecured SUB FLTG RT SI with a date of Mar 31 2040 and with a cost of $765 and a MV $955. I also CSU.RT of 40 with MV @ .75 and recently received notification of WTS of 40 at no value. My question is what must I do by Sept 29 if hang onto my current debentures will they lose value ? do I have to do something with the 40 CSU.RT that I have or the 40 WTS just issued. Should I just sell the current debentures on the open market. Totally confused by this despite reading all the recent questions and answers on your website.
Thanks
Kathy
5i Research Answer:
Both the warrants and the rights are completely optional and nothing has to be done. The warrants do not have any utility until CSU announces a redemption of its current debentures. The rights allow a holder to buy debentures, with 3.03 rights being needed to subscribe for $100 in debentures, at a premium price. If an investor wants more debentures, then they can exercise the rights and pay to get more debentures. If not, they can sell their rights prior to expiry, but in most cases the amount received will be negligible (trading at 11c), and if the amount does not at least cover any trading commission we would just let these expire. If and when the warrants are listed a decision can be made on those.