The baffling terminology of shares

A few days ago, Standard Bank sent us the following public offer regarding Nedbank Group Ltd Preference Shares (NBKP):

“Nedbank Group Ltd intends issuing non-core Tier 1 perpetual, non-cumulative, non-redeemable, non-participating preference shares by way of a public offer to raise ZAR1 billion. The Nedbank preference shares will pay a dividend of 75 percent of the prime interest rate.

Details of the offer:

JSE share code : NBKP
Offer price : R9.90
Subscription amount : Minimum R100 009.80 and increments of R9.90 thereafter
Response deadline for subscriptions : Tuesday, 25 August 2009 at 12:00
Proposed listing date : Wednesday, 9 September 2009″

I’m afraid that I had to ask him to read it to me twice. And it still didn’t make any more sense to me.

Particularly the bit about non-core Tier 1 perpetual, non-cumulative, non-redeemable, non-participating preference shares”.

I guess to a professional share trader these terms probably make perfect logical sense. But to me they don’t. If you know what they mean, PLEASE enlighten me?

We also had a good giggle at the MINIMUM subscription amount of R100,009.80. Honestly, if I had that much spare money lying around, I probably wouldn’t invest it in something that had quite so many “non’s” in its title.

The world of finance.

Sometimes, it’s like a parallel non-intersecting universe to the one in which I live.

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