Commonwealth Bank of Australia today announced a new product to give Telstra 2 share owners an alternative to paying the final instalment of $3.05 per share (or $2.90 for investors eligible for the loyalty discount) due on November 2nd 2000.
'T2 Extensions' is a product of the Commonwealth Bank of Australia, offered to the public through Commonwealth Securities (ComSecTM) the Commonwealth Bank Group's wholly owned broking subsidiary and Australia's leading stockbroker.
T2 Extensions are a warrant which, in effect, work like a loan. All payments on T2 Extensions are deferred until May 2002 enabling clients to establish the direction of the share price in that period. The key feature of T2 Extensions is that clients can also decide not to make the final payment at the end of the 18 month period. Payment will only be required if clients wish to take up their Telstra shares. The cost of the T2 Extension is $3.90 per share.
Paul Rickard, Director of ComSec comments, "We are delighted to be bringing this offering to the market as we believe it will alleviate a lot of anxiety for T2 shareholders who looking for an alternate way to fund their Telstra 2 investment. Importantly, I think the T2 Extensions demonstrate our commitment to making relevant services accessible for Australian investors".
"As more Australians adopt a do-it-yourself approach to investing, we are supporting them with services that make navigating difficult choices simpler. This product is for investors holding as little as 400 T2 instalments due in November. Other competitive offerings in the market focus on the higher end investor. The T2 Extensions gives Telstra shareholders 18 months to interpret the direction Telstra takes and at the end of the extension period they will be better equipped to make their decision," he added.
T2 Extensions will also be listed on the ASX and may be traded at any time during the 18 month extension period.
Successful applicants to the T2 Extension offer will continue to enjoy any benefits of share ownership throughout the 18 month period, including dividend payments and potential franking credits and capital growth. For those eligible for a loyalty bonus of 15 cents per instalment, these will be used to purchase additional T2 Extensions.
The closing date for T2 Extension applications will be 25 October 2000 for ComSec CHESS sponsored clients.
Clients wanting further information about the T2 Extensions should visit the ComSec website at www.comsec.com.au to download an Offering Circular. Alternatively, they can contact 13 15 19 to request one through the mail.
Commonwealth Bank of Australia ABN 48 123 123 124 is the issuer of the T2 Extensions and Commonwealth Securities Limited ABN 60 067 254 399 is the broker to the issue. Potential investors should seek their own professional advice in relation to investing in T2 Extensions. Investors circumstances vary and the above information does not take into account the particular circumstances of the person who reads it. References to Telstra are solely for the purposes of identifying shares to which the T2 Extensions relate. Telstra has not been involved in the preparation of or authorised the publication of this notice.
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