REG - Standard Chrtrd PLC - Notice to ADR Holders of 6.409% Preference Shares

Standard CharteredAnnouncement

27/03/2024 18:30

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RNS Number : 5954I  Standard Chartered PLC  27 March 2024

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ANNOUNCEMENT.

27 March 2024

STANDARD CHARTERED PLC
(a public limited company incorporated in England and Wales)

Announcement on Standard Chartered PLC's 6.409% non-cumulative redeemable
preference shares (the "6.409% Preference Shares") represented by American
Depositary Shares ("ADSs")

On 4 January 2023, Standard Chartered PLC (the "Company") announced that a
proposal to transition the dividend rate for the 6.409% Preference Shares from
a three month U.S. dollar LIBOR-based rate to a compounded SOFR-based rate had
not been approved, and so would not be implemented.

On 19 June 2023, the Company announced that, as from the dividend period
commencing 31 July 2023, the dividend rate payable on the 6.409% Preference
Shares would be calculated by reference to the three month synthetic U.S.
dollar LIBOR rate. The three month synthetic U.S. dollar LIBOR rate is
calculated using three month CME Term SOFR plus the three month
ISDA-recommended credit adjustment spread.

As the publication of three month synthetic U.S. dollar LIBOR is due to cease
from 30 September 2024, the Company announces that it intends to commence
proceedings in the High Court of Justice of England and Wales (the "Court") to
seek a binding declaration on the use of an alternative benchmark rate to
calculate the dividend rate payable on the 6.409% Preference Shares (the
"Proceedings").

The Company currently anticipates commencing the Proceedings on or around 10
April 2024 and intends to request that the Proceedings be heard on an
expedited basis, as the Company would like to provide investors with clarity
and certainty on the dividend rate payable on the 6.409% Preference Shares
following the cessation of the publication of three month synthetic U.S.
dollar LIBOR.

It is for the Court to determine the most suitable alternative benchmark rate.
To assist the Court in its consideration of this matter, the Company intends
to present the Court with evidence about various alternative rates. The
Company considers that three month CME Term SOFR plus the three month
ISDA-recommended credit adjustment spread, as is currently used to calculate
three month synthetic U.S. dollar LIBOR, would be the most suitable
alternative rate. Accordingly, the Company intends to invite the Court to
approve the use of this rate for the calculation of the dividend rate payable
on the 6.409% Preference Shares. Term SOFR is a forward-looking rate that has
been widely accepted as the alternative benchmark rate for U.S. dollar LIBOR
in the U.S. and the U.K. The FCA has indicated that it considers synthetic
U.S. dollar LIBOR to be a fair and reasonable approximation of U.S. dollar
LIBOR's likely economic outcome. 1  (#_ftn1) The Company has been using
synthetic U.S. dollar LIBOR to calculate the dividend rates payable on the
6.409% Preference Shares as from the dividend period commencing on 31 July
2023 and considers that it would be appropriate to continue to use the same
methodology.

The Company is committed to identifying an alternative benchmark rate that
fairly reflects the terms of the 6.409% Preference Shares.

JPMorgan Chase Bank, N.A. (the "Depositary") holds the role of depositary
under the deposit agreement dated 8 December 2006 (as amended from time to
time) establishing the ADSs representing the 6.409% Preference Shares (the
"Deposit Agreement"). The 6.409% Preference Shares are currently held by a
nominee of the Depositary, Guaranty Nominees Limited (the "Nominee").

However, neither the Depositary nor the Nominee (in those capacities) holds
any economic interest in the 6.409% Preference Shares. Their role is
essentially to hold the 6.409% Preference Shares for the benefit of, and to
pass on payments and documents to, holders of the ADSs. Further, under the
terms of the Deposit Agreement, neither the Depositary nor the Nominee is
under any obligation to appear in, prosecute or defend any action, suit or
other proceeding in respect of the 6.409% Preference Shares or the ADSs.

The Company has informed the Depositary of the Proceedings. Given that the
Nominee is the sole registered holder of the 6.409% Preference Shares, it will
be a necessary defendant in the Proceedings. However, in light of the above,
the Company does not expect that either the Depositary or the Nominee will
take an active role in the Proceedings. The Nominee will be named as the
defendant as a procedural matter only.

The holders of the ADSs are not members of the Company and will not therefore
be named by the Company as defendants in the Proceedings. However, recognising
their economic interest in the 6.409% Preference Shares, the Company has
provided the holders of the ADSs with additional information about the
Proceedings which is available on the Company's website at
https://www.sc.com/en/investors/credit-ratings-fixed-income/capital-securities-in-issue/
(https://www.sc.com/en/investors/credit-ratings-fixed-income/capital-securities-in-issue/)
. The Company invites the holders of the ADSs to notify it using the contact
details provided below if they intend to participate in the Proceedings.

This announcement is released by the Company and contains information that
qualified as inside information for the purposes of Article 7 of Regulation
(EU) No 596/2014 as it forms part of the domestic law of the U.K. by virtue of
the EUWA ("UK MAR"), encompassing information relating to the 6.409%
Preference Shares described above.

The Company does not, at this stage, intend to comment further on the
Proceedings.

 

Debt Investor Relations

Email: Investor.Relations@sc.com (mailto:Investor.Relations@sc.com)
 
 

Tel: +44 207 885 8888

 

Debt Capital Markets
Email: Primary.Debt@sc.com (mailto:Primary.Debt@sc.com) /
SCBCapitalMarketsNotice@sc.com (mailto:SCBCapitalMarketsNotice@sc.com)
 

Tel: +44 207 885 8888

 

Group Media Relations

Shaun Gamble

Email: shaun.gamble@sc.com (mailto:shaun.gamble@sc.com)

Tel: +44 7766 443 662

 1  (#_ftnref1) Paragraph 3.66 of the FCA's Consultation Paper CP22/21:
"Consultation on 'synthetic' US dollar LIBOR and feedback to CP22/11" dated
November 2022.

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