"Peak TrENDS Trust" - Amex: PTT
Looking at the news items for PEAKF, I noticed they had references to
Amex symbol PTT as well as PEAKF on the Nasdaq. These turned out to
be shares in the "Peak TrENDS Trust", a Delaware trust that holds
Treasury securities, pays quarterly dividends, and, in May 2001,
terminates and converts into shares of PEAKF.
PTT currently has an NAV of ca. $16 per share, is quoted at 5 - 5 3/8,
and SEC filings are on Edgar under the name "Peak Trends Trust".
Below is a description of PTT taken from the N30D filing of 01/15/99.
Does anyone have any comments about these securities - in particular,
are there any pitfalls to watch out for, apart from the obvious one
of PEAKF possibly becoming valueless before 2001?
t.j
Peak TrENDS Trust
Summary Information
Each of the Trust Enhanced Dividend Securities ("TrENDS") of the Peak TrENDS
Trust represents the right to receive an annual distribution of $1.418, and will
be exchanged on May 15, 2001 for between 0.8696 and 1.0 ordinary share, $0.01
par value per share ("Common Stock") of Peak International Limited (the
"Company"). The annual distribution of $1.418 per TrENDS is payable quarterly on
each February 15, May 15, August 15 and November 15, commencing August 15, 1998
and ending May 15, 2001. The TrENDS are not subject to redemption.
The Trust was established to purchase and hold a portfolio of stripped U.S.
Treasury securities maturing on a quarterly basis through May 15, 2001, and a
forward purchase contract for Common Stock of the Company (the "Contract") with
Luckygold 18A Limited, a company incorporated in the British Virgin Islands,
which is a shareholder of the Company (the "Seller"). Mr. T. L. Li, the sole
shareholder of the Seller has guaranteed the delivery of the shares of Common
Stock covered by the Contract and the maintenance of collateral for the Seller's
obligations under the Contract. The trustees of the Trust do not have the power
to vary the investments held by the Trust.
The Trust's investment objective is to provide each holder of TrENDS with a
quarterly distribution of $0.354 per TrENDS and, on May 15, 2001 (the "Exchange
Date"), a number of shares of Common Stock per TrENDS computed as follows: (1)
if the average daily closing or last sale price of the Common Stock in the
Nasdaq National Market for the 20 trading days immediately preceding the
Exchange Date (the "Reference Market Price") is less than $18.1125 but equal to
or greater than $15.75, the holder will be entitled to receive a number of
shares of Common Stock per TrENDS the value of which, when multiplied by the
Reference Market Price, is equal to $15.75; (2) if the Reference Market Price
per TrENDS on the Exchange Date is equal to or greater than $18.1125, the holder
will be entitled to receive 0.8696 shares of Common Stock per TrENDS; and (3) if
the Reference Market Price per TrENDS on the Exchange Date is less than $15.75,
the holder will be entitled to receive 1.0 share of Common Stock per TrENDS. The
exchange ratios are subject in each case to adjustment upon the occurrence of
certain events. Holders will receive a cash adjustment in lieu of any fractional
share of Common Stock distributable in respect of their aggregate holdings of
TrENDS. Under the Contract, instead of delivering shares of Common Stock, the
Seller may elect, not later than 20 trading days prior to the Exchange Date, to
pay cash in an amount per TrENDS equal to the Reference Market Price multiplied
by the number of shares of Common Stock determined under the above formula. If
the Seller should make that election, holders of TrENDS will receive cash
instead of shares of Common Stock on the Exchange Date.
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