What is an automatic exchange?

Under certain circumstances or qualifying events, the issuer of a Capital Trust Security may have the ability to repay the investor's principal not with a cash payment, but rather by automatically exchanging the Capital Trust Securities into another investment type, such as Perpetual Preferred Shares of the corporation. The exchange will occur, without the investor's consent, upon the occurrence of certainqualifying events. The Capital Trust's prospectus will contain all of the details surrounding the conditions need to trigger an automatic exchange, such as the qualifying events and the exchange ratio for every $1,000 of capital trust securities, etc. Following the automatic exchange, original holders of the trust units or notes will cease to have any claim or entitlement to interest or principal against the trust.


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