Title: Arizona Proposal to Authorize and Issue Subordinated Convertible Debentures: A Comprehensive Overview Introduction: The state of Arizona has put forth a proposal to authorize and issue subordinated convertible debentures, aiming to stimulate economic growth and infrastructure development. This detailed description will delve into the specifics of this proposal, highlighting its purpose, features, benefits, and the potential impact it may have on the state's financial landscape. Keywords: Arizona, proposal, authorize, issue, subordinated, convertible debentures, economic growth, infrastructure development, financial landscape. 1. Purpose of the Proposal: The primary objective of the Arizona proposal is to raise funds for investment in critical infrastructure projects, such as transportation systems, utilities, schools, and healthcare facilities. By issuing subordinated convertible debentures, the state seeks to access capital at competitive rates while allowing flexibility for future conversion into equity if necessary. Keywords: purpose, Arizona proposal, raise funds, investment, infrastructure projects, transportation systems, utilities, schools, healthcare facilities, subordinated convertible debentures, capital, conversion. 2. Features of Subordinated Convertible Debentures: Subordinated convertible debentures are financial instruments that offer unique characteristics to the investors. They possess the following primary features: a. Subordinated Ranking: These debentures represent a lower priority claim on the issuer's assets compared to other types of debt. In the event of issuer's insolvency, subordinated debenture holders would be repaid after senior creditors but ahead of equity holders. b. Convertible Option: Holders of these debentures have the option to convert their debt into equity shares of the issuer or its affiliated entities, under predetermined conversion terms and conditions. Keywords: subordinated convertible debentures, features, subordinated ranking, insolvency, senior creditors, equity holders, convertible option, conversion terms. 3. Benefits of Subordinated Convertible Debentures: The Arizona proposal to authorize and issue subordinated convertible debentures offers numerous benefits to the state and investors. These include: a. Lower Borrowing Costs: By choosing to issue subordinated convertible debentures, Arizona can potentially access capital at lower interest rates compared to traditional debt instruments due to the potential equity conversion feature. b. Flexibility in Capital Structure: The conversion feature provides flexibility to the state, allowing it to adjust its capital structure as per future needs. Conversion eliminates or reduces the burden of debt repayment. c. Attracting Diverse Investor Base: The inclusion of convertible options in the debentures appeals to investors seeking potential capital appreciation through conversion into equity. This broadens the state's investor base and enhances market demand for the debentures. Keywords: benefits, subordinated convertible debentures, lower borrowing costs, flexibility, capital structure, equity conversion, debt repayment, diverse investor base, capital appreciation. 4. Potential Types of Arizona Subordinated Convertible Debentures: While the proposal does not explicitly mention different types of subordinated convertible debentures, possible variations may include differing maturity periods, interest rates, conversion ratios, and associated terms and conditions. These variations can cater to the needs of various investors, promoting wider participation and enhancing the marketability of the debentures. Keywords: Arizona, subordinated convertible debentures, types, maturity periods, interest rates, conversion ratios, terms and conditions, wider participation, marketability. Conclusion: The Arizona proposal to authorize and issue subordinated convertible debentures aims to foster economic growth and infrastructure development within the state. By offering unique features and benefits, these debentures have the potential to attract investors, lower borrowing costs, and provide flexibility in the state's capital structure. As various types of subordinated convertible debentures are designed, Arizona's financial landscape may witness increased investment opportunities coupled with sustainable development. Keywords: Arizona proposal, subordinated convertible debentures, economic growth, infrastructure development, investors, borrowing costs, flexibility, capital structure, investment opportunities, sustainable development.
Arizona Proposal to authorize and issue subordinated convertible debentures
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If you want to issue instruments which can be converted into equity at future date and valuation then the most suitable instruments are Convertible notes and Convertible Debentures. The valuation report is not required if issued to domestic investors.
Companies can issue CCDs through a private placement offer u/s 42 of the Companies Act, 2013. ingly, issuance of Debentures will be categories as acceptance of Deposit under the provision of Companies Act, 2013.
Companies issue convertible debentures as fixed-rate loans, paying the bondholder fixed interest payments on a regular schedule. Bondholders have the option of holding the bond until maturity?at which point they receive the return of their principal?but, holders may also convert the debentures into stock.
The process of issuing a convertible debenture by a public company within its borrowing limits involves obtaining board approval, seeking shareholder authorization, preparing a prospectus, securing regulatory approval, and then conducting a public offering.
Convertible debentures are further classified as (A) Full Convertible Debentures, (B) Partly convertible Debentures. A resolution for conversion is approved in the board meeting. The shareholders as well as debenture holders' approval is taken for conversion. A special resolution is passed to that effect.
Compulsorily Convertible Debentures Step 1 ? Convene a board meeting for approval of issue of CCD to particular set of people. ... Step 2 ? Decide on the terms of issue and prepare the CCD agreement with all the important terms. Step 3 ? Open a new bank account which will only be used for deposit of this subscription account.
1. Call Board Meeting Form No. ... PAS- 5 Form No. ... Appointing a debt trustee and approving the debt trustee agreement. appointment of a specialist to approve an increase in borrowing authority, if necessary. To permit the establishment of a charge against the company's assets. Accept the debt instrument subscription agreement.
Issuance Process of Optionally Convertible Debentures Board Approval: The board of directors must pass a resolution to authorize the issuance of OCDs, including determining the terms, conditions, and the maximum number of debentures to be issued.
Hold Board Meeting and pass the Board Resolution for Conversion of CCD into Equity Shares along with approving Notice of Genernal Meeting for the approval of Shareholders of the Company. Hold General meeting of the Shareholders of the Company and pass the Special Resolution for Conversion of CCD into Equity Shares.