NOT
FOR RELEASE, PUBLICATION OR DISTRIBUTION (A) IN OR INTO OR TO ANY
PERSON LOCATED OR RESIDENT IN THE UNITED STATES, ITS TERRITORIES
AND POSSESSIONS (INCLUDING PUERTO RICO, THE U.S. VIRGIN ISLANDS,
GUAM, AMERICAN SAMOA, WAKE ISLAND AND THE NORTHERN MARIANA ISLANDS,
ANY STATE OF THE UNITED STATES AND THE DISTRICT OF COLUMBIA) (THE
"UNITED STATES" OR THE "U.S.") OR TO ANY "U.S. PERSON" AS DEFINED
IN REGULATION S UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OTHER THAN A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT OR (B) IN OR INTO ANY OTHER JURISDICTION WHERE IT IS UNLAWFUL
TO RELEASE, PUBLISH OR DISTRIBUTE THIS
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] 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/.
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
Tel: +44 207 885 8888
Debt Capital Markets
Email: Primary.Debt@sc.com
/ SCBCapitalMarketsNotice@sc.com
Tel: +44 207 885 8888
Group Media Relations
Shaun Gamble
Email: shaun.gamble@sc.com
Tel: +44 7766 443 662