Insignia Financial (ASX:IFL) opted not to exercise an early redemption request from National Australia Bank (ASX:NAB) to redeem AU$200 million of subordinated loan notes, according to a Tuesday filing with the Australian bourse.
The notes, issued to fund Insignia's MLC Wealth acquisition from NAB, allow the bank to request early redemption from Nov. 30, 2024, but the company is not obligated to repay the notes until its maturity on May 31, 2026, the filing said.
By declining the request, Insignia triggers an increase in the coupon rate to 4% from 1%, with the additional return amount (ARA) locked at the volume-weighted average price (VWAP) of Insignia shares for the 30 days ended Feb. 28, the filing added.
With a current VWAP of AU$4.50, the ARA payable at maturity is estimated to be AU$53.5 million, the company said.
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