Megawide [MWIDE 3.02 1.0%] [link] disclosed a slate of tentative, PSE-approved dates for its P1.5-billion sale of Series 5 Preferred shares under the ticker, “”MW?5”. The offer period will run from March 28 to April 4, with a listing on April 17.
The preferred shares will carry a dividend rate of 7.9042%. MWIDE has said that it would use the proceeds to fully redeem the Series 2A Preferred Shares [MW?2A] shares.
The SEC approved had approved the sale back on February 28.
MB BOTTOM-LINE
As discussed before, this is a little bit of debt juggling that most companies will do when they start to issue preferred shares.
Basically, a competent organization will run a sale like this to acquire the funds needed to redeem an earlier series of preferred shares before the passage of time triggers a punishing step-up in the dividend rate.
The MW?5 shares “step-up” on the 3rd anniversary of the listing date, which (for now) is April 17, to the higher of 12.00% or a “simple average of the closing per annum rate of the 5-year BVAL.”
You can check the BVAL rates on the PDS website.
Without getting too far into the weeds, MWIDE is going to do whatever it can to pay those prefs off before the 3rd anniversary in 2026, to avoid paying at least 12% interest.
--