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Trust PFD default?
I beleive the origional symbol was FJA
Ran up against something Ive never seen. Perhaps you or someone on the thread knows and has some input. the PFD was the trust PFD as per below;
SECURITY DESCRIPTION: Merrill Lynch Depositor Inc., PPLUS Class A, 7.10% Callable Trust Certificates, PPLUS Trust Series EQ-1 with a stated amount $25 per certificate, and which are redeemable on or after 6/1/2012 under the call warrants at $25 plus accrued and unpaid interest. The underlying securities are the 7.995% Notes due 6/1/2036 issued by Embarq Corp. (NYSE: EQ). The certificates pay distributions of 7.10% ($1.775) per annum semi-annually on 6/1 & 12/1 to holders of record on the business day immediately prior to the payment date. Distributions paid by the certificates are interest and as such are NOT eligible for the 15% tax rate on dividends and is also NOT eligible for the dividend received deduction for corporate holders. Ratings of the certificates at the IPO are BBB- by S&P and Baa3 by Moody’s. See page S-46 of the prospectus for a discussion of the tax considerations of the PPLUS certificates. See the IPO prospectus for further information on the PPLUS Certificates and the call warrant provisions by clicking on the ‘Link to IPO Prospectus’ provided below. The CenturyTel acquisition of EMBARQ was completed on July 1, 2009. |
Then they excersized their option and...
March 13, 2013 -- NOTICE IS HEREBY GIVEN that, pursuant to the terms of the Series Supplement dated June 14, 2007, which incorporates the terms of the Standard Terms for Trust Agreements, dated as of May 29, 2007, between Merrill Lynch Depositor, Inc., as Depositor and The Bank of New York Mellon, as Trustee, the Trustee has not received a notice of exercise from the holder of the warrants to purchase the outstanding PPLUS Trust Certificates Series EQ-1. Under the terms of the Trust Agreement, if the Call Warrant Holder chooses not to exercise the Call Warrants within 10 days after notice is given, the holders of Class A and Class B Certificates will receive Underlying Securities in kind, subject to appropriate minimum denominations of the Underlying Securities. The Trustee will divide the principal amount of Underlying Securities (and any cash proceeds) between the Classes in accordance with the Allocation Ratio and distribute each Class' portion to such Class' Certificateholders pro rata to each Certificateholder's last address as it appears in the Certificate Register. If any Underlying Securities are not so distributed, the Trustee shall sell the Underlying Securities not so distributed and a pro rata portion of the Related Assets held by the Trust, and any liquidation proceeds shall be divided between the Classes in accordance with the Allocation Ratio. Each Class' portion shall be deposited into such Class' Certificate Account and distributed pro rata to such Class' Certificateholders. The Underlying Securities and the proceeds will be distributed on March 18, 2013.
What we got was $20 of a note with a coupon of 7.995% and a bit over $3 in cash. That doesnt add up to the origional $25. Is that a default? Were there not enough bonds to cover the trust? certianly gives trust PFD's a new element of risk. Looks like I'm out a bunch of money, but honestly just calling around to see if I can get the story.
Anyone know the situation?
