Ann: WAV/RULE: VCT070: VCT - Waiver from NZDX Lis

• Release Date: 18/06/12 10:30
• Summary: WAV/RULE: VCT070: VCT - Waiver from NZDX Listing Rule 11.1.1
• Price Sensitive: No
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VCT
18/06/2012 08:30
WAV/RULE

REL: 0830 HRS Vector Limited

WAV/RULE: VCT070: VCT - Waiver from NZDX Listing Rule 11.1.1

15 June 2012

NZX Market Supervision Decision
Vector Limited
 Application for Waiver from NZDX Listing Rule 11.1.1.

Background

1. Vector Limited ("VCT") is a Listed Issuer with ordinary shares Quoted on
the NZX Main Board and two series of bonds Quoted on the NZX Debt Market
("NZDX"), including unsecured subordinated capital bonds (VCT040) ("Capital
Bonds").

2. The existing terms of the Capital Bonds provide that the next Election
Date for the Capital Bonds is 15 June 2012 (the "Election Date").

3. From the Election Date, all Capital Bonds will be subject to certain
conditions (the "Conditions"), as notified to Capital Bond holders in the
explanatory notes accompanying their election notice, including the condition
that the Capital Bonds may only be transferred in minimum aggregate principal
amounts of $1,000 or such lesser amount as VCT may from time to time permit,
provided that following such transfer the transferee holds Capital Bonds with
a minimum aggregate principal amount of $5,000 (the "Transfer Restriction").

4. NZDX Listing Rule ("Rule") 11.1.1 provides that, subject to any
legislation and Rules 11.1.4 and 11.1.5, no Issuer shall impose, in its
Constitution or otherwise, any restriction on the right of a holder of a
Quoted Security to transfer that Security, or any restriction upon
registration of a properly completed transfer of Quoted Securities.

Application

5. VCT has applied to NZX Market Supervision ("NZXMS") for a waiver from Rule
11.1.1, so that it may include the Transfer Restriction in the Conditions.

6. In support of its application VCT makes the following submissions:

(a) The Transfer Restriction is consistent with Rule 11.1.4(b), which allows
an Issuer to decline to accept or register a transfer that results in a
transferee holding Securities less than a Minimum Holding (in the case of
Debt Securities being a principal amount of $5,000). The Minimum Holding rule
is intended to minimize the incidence of small parcels of Securities that
could lead to Issuers incurring disproportionately high administrative
expenses in relation to those parcels of Securities;

(b) If Capital Bond holders wished to transfer smaller parcels of Securities,
these could be transferred to a bank or a market participant (who would
aggregate them for transfer to other investors);

(c) Capital Bond holders are unlikely to benefit from the ability to transfer
or acquire parcels less than $1,000.  Any possible benefits would be
outweighed by the additional costs to VCT administrating the Capital Bonds;
and

(d) NZXMS has previously granted similar waivers to other issuers, including
on 17 June 2011 to Z Energy Limited in relation to its senior secured fixed
rate bond issue and on 25 August 2011 to Air New Zealand Limited in relation
to its fixed rate bond issue.

Rules

7. Rule 11.1.1 provides that:

"Subject to the provisions of any legislation, and to Rules 11.1.4 and
11.1.5, no Issuer shall impose, in its Constitution or otherwise, any
restriction on the right of a holder of a Quoted Security to transfer that
Security, or any restriction upon registration of a properly completed
transfer of Quoted Securities."

8. Rule 11.1.4 provides that:

 "An Issuer may decline to accept or register:

...

(b)  a transfer of Securities, if such registration, together with the
registration of any further transfer or transfers then held by the Issuer and
awaiting registration, would result in the proposed transferee holding
Securities of less than the Minimum Holding."

Decision

9. On the basis that the information provided to NZXMS is full and accurate
in all material respects, NZXMS grants VCT a waiver from Rule 11.1.1, to
allow it to include the Transfer Restriction in the Conditions.

Reasons

10. In coming to this decision, NZXMS has considered the following matters: ?

(a) NZXMS has had the opportunity to review and approve the explanatory notes
and election notice to ensure that the Transfer Restriction is clearly
disclosed;

(b) Debt Securities are generally not subject to the same degree of trading
activity as Equity Securities;

(c) A minimum transfer amount of $1,000 is a common restriction for Debt
Securities Quoted on the NZDX;

(d) The Transfer Restriction will alleviate the cost and administrative
burden incurred in situations where there are many holdings of a smaller size
or there is trading of the Capital Bonds holdings of less than $1,000; and

(e) There is precedent for this decision, including those decisions listed at
paragraph 6(d).

ENDS.
End CA:00223929 For:VCT    Type:WAV/RULE   Time:2012-06-18 08:30:05