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RBS - Preferred Tender Announced
What I don't understand in the RBS I-IV are Trust Preferreds, meaning there is an intercompany debt obligation that they can't default or suffer cross-acceleration/def... on their other debt. In addition, they are pari passu with the non-cumulative preferreds meaning if RBS pays a dividend on one, it pays a dividend on all. The Trust Preferred can't sit on cash in the trust and must distribute the cash in the form of dividends. Net-Net, there is proviso that says they cut off the dividend unless "legally obligated", so my thinking is they will need to keep paying the dividend. Where am I off on my logic and understanding?
Apr 27, 2010. 01:18 AM
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