Home' Trinidad and Tobago Guardian : July 25th 2013 Contents This week we will be addressing
some of the pertinent ques-
tions on investors minds
regarding the First Citizens
(the Bank) Initial Public Offer-
ing (IPO) of shares that opened
on July 15, 2013. Potential investors have been
given a four-week period to subscribe for
shares as the offer is scheduled to close on
August 9, 2013. The expected listing date is
the September 6, 2013.
A report issued on July 17 by international
rating agency Standard & Poor s (S&P) reaf-
firmed the First Citizens BBB+ credit rating
with a stable outlook. S&P listed strengths
of the bank as being owned by the Government
and its strong capitalisation levels.
The following Q&A seeks to address some
of the major queries from our clients.
Who will qualify to purchase
The ordinary shares are being offered only
to nationals of T&T, with the exception being
employees of the bank who reside outside of
T&T. Institutional investors in T&T, companies
registered in T&T, the National Insurance
Board, registered mutual funds and the T&T
Unit Trust Corporation, pensions and other
trust funds, credit unions and co-operatives,
and other investors such as the Commonwealth
Development Corporation and the trustees,
from time to time, of the Caribbean Investment
Fund also qualify.
How many shares will be coming to
A total of 48,495,665 shares in the bank
will be offered for sale at a value of $22 per
share. This represents approximately 19.3 per
cent of the total share capital of the Bank and
a value of approximately $1.1 billion.
In terms of total share capital, First Citizens
will represent approximately 5.0 per cent of
the T&T Composite Index (TTCI) once it
becomes listed. However, only 19.3 per cent
of total market capitalisation (1.0 per cent of
the TTCI) is being offered for sale (Exhibit 1).
What do I need to subscribe?
Clients with existing brokerage accounts
who wish to subscribe would need to present
• A valid form of Identification -
• T&T passport or drivers permit and birth
certificate or national id card and birth cer-
• A recent bank statement---as proof of
account number---only local savings and
chequing accounts will be accepted
• A completed subscription form to the FCB
IPO; available at all participating brokerage
• A T&T Central Depository (TTCD) account
You will be required to provide the following:
• Two valid forms of identification
• Proof of address: a utility bill or bank
statement (no more than 3 months old)
• A completed TTCD Agreement Form:
available at Bourse offices
How many shares can I purchase?
There is no minimum or maximum number
of shares that an investor can subscribe for.
However, in accordance with the prospectus
"Each individual investor who is a national of
T&T will be given the right to buy a guaranteed
minimum allocation of 50 shares."
In other words, in the case of over sub-
scription, those who have subscribed for more
than 50 shares are guaranteed to receive a
minimum of 50 shares. Those who have sub-
scribed for less than 50 shares will receive the
amount they have subscribed for.
Each employee of the bank can purchase
up to 5,000 shares at a 10 per cent discount
($20). Any additional shares can be purchased
at the offer price of $22. There will be a black-
out period of 90 days post listing during which
employees will not be permitted to sell shares
that were purchased at the discounted price.
Only one subscription per investor is allowed.
Multiple applications will be discarded. For
investors who have joint accounts but both
persons wish to purchase shares individually,
it is recommended that separate individual
accounts be used.
How will the shares be allocated?
In the event of oversubscription, the shares
are being allocated in descending order of pri-
ority as shown in Table 1.
Under no circumstances will more than
48,495,665 ordinary shares be allotted in total.
Allocations will be done on a pro-rated weight-
ed average basis within each category. Unsub-
scribed shares from any category will flow
into the subsequent category for allocation.
When will I know if I was
According to the prospectus, successful
applicants to the offer will be notified in writing
of their allocations no later than August 30,
2013 together with any refunds (via direct
deposits to the bank account provided) as
What kind of dividends can I
The dividend policy as outlined in the
prospectus will be to distribute to ordinary
shareholders an annual target dividend payout
percentage in the range of 45 per cent to 55
per cent of net profit after tax.
The target dividend payout rate will not be
changed without the prior approval of the
directors. It is expected that dividends will be
paid twice per year.
An interim dividend for the financial year
will be declared based on the six months finan-
cial results to March 31, 2013 after the close
of the Offer period.
Dividends will be paid to shareholders via
direct deposits using the account information
provided on the subscription form.
What does Bourse recommend?
At a price of $22, First Citizens will be
trading at a forward P/E of 9.4 times with an
expected dividend yield of 4.8 per cent based
on projections provided by the issuer. Bourse
recommends a buy.
Next week, we will be conducting an in
depth analysis and valuation of the stock for
For more information, investors can call
628-9100 or email fcbipo@boursefinancial.
com or visit us at any one of our offices.
Further information is also available on
Bourse's Web site at www.bourseinvest-
ment.com and Bourse Securities Ltd Face-
BG16 | COMMENTARY
BUSINESS GUARDIAN www.guardian.co.tt JULY 2013 • WEEK FOUR
Bourse Securities Ltd
First Citizens' IPO
This document has been prepared by Bourse
Securities Ltd, for information purposes only. Any
trade in securities recommended herein is done
subject to the fact that Bourse, its subsidiaries
and/or affiliates have or may have specific or
potential conflicts of interest in respect of the
security or the issuer of the security, including
those arising from (i) trading or dealing in certain
securities and acting as an investment advisor; (ii)
holding of securities of the issuer as beneficial
owner; (iii) having benefited, benefitting or to bene-
fit from compensation arrangements; (iv) acting as
underwriter in any distribution of securities of the
issuer in the three years immediately preceding this
document; or (v) having direct or indirect financial
or other interest in the security or the issuer of
the security. Investors are advised accordingly. Nei-
ther Bourse nor any of its subsidiaries, affiliates
directors, officers, employees, representatives or
agents, accepts any liability whatsoever for any
direct, indirect or consequential losses arising from
the use of this document or its contents or
reliance on the information contained herein. Bourse
does not guarantee the accuracy or completeness
of the information in this document, which may
have been obtained from or is based upon trade
and statistical services or other third party sources.
The information in this document is not intended
to predict actual results and no assurances are
given with respect thereto.
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