Corporate Actions and Securities Processing
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CORPORATE ACTIONS AND SECURITIES PROCESSING
corporate actions that affect the equities or debt your company issues are the most important transactions you will conduct. They carry a high profile, high risk and high value.
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Cash/Stock Election
A widely-held international corporation sought to spin off a company in which it had held a majority stake for 5 years.
The challenge
The corporation's shareholder account base totalled in the hundreds of thousands. In this voluntary tender offer, each shareholder would need to elect to receive either common stock in the company being spun off, cash or a combination of stock and cash.
Like most corporate action processing projects, this assignment carried the risk of high-volume transaction processing in a short time frame. Speed can reduce accuracy in many processes that involve people. Additionally, the risk of distributing payments improperly to tendering shareholders affects all parties to a corporate action, from the exchange agent to the transfer agent to the issuer.
The issuer choose Colbent as its corporate action service provider.
The Colbent solution
As we do with every project we take on, Colbent assumed the risk associated with this voluntary corporate action. We do this for several reasons:
- Our people are experienced in executing all manner of corporate actions. They've encountered every nuance and learned to anticipate "speed bumps" in the process.
- Our powerful data processing systems have the capacity to handle such large-volume assignments, and the power to complete them quickly.
Our staff leveraged their years of corporate actions experience and Colbent's dedicated technolgy to convert files from the transfer agent, mail letters of transmittal, and accurately collect, track and compute all elections from both registered and street shareholders. Colbent closely scrutinized all elections, enabling us to make sound decisions regarding proration and distribution.
The result
Colbent executed this assignment with same-day processing and up-to-the-minute client reporting. Payments and credits were sent immediately after acceptance with 100% accuracy, mitigating risk to the issuer and, most importantly, their shareholders.