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Corporate action events

BMET: Bond Holder Meeting

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BMET announces a meeting of the holders of a bond, called to vote on resolutions such as changes to the terms, a waiver of a default or a restructuring. Holders can vote for or against, abstain, or appoint a proxy.

Code
BMET
Usually announced as
VOLU

What BMET means

A bond’s terms can usually only be changed with the approval of a set majority of its holders. When the issuer or the trustee wants a change, for example to extend the maturity, reduce the coupon, swap the bonds for new ones or waive a breach, it calls a bondholder meeting. The meeting has a quorum, and if it is not reached an adjourned meeting may follow.

Voting rights depend on the nominal amount held on the record date set for the meeting. A resolution passed at the meeting binds all holders of the bond, including those who did not vote, so the outcome can change the economics of every position.

When you see it

  • An MT564 with :22F::CAEV//BMET, announced as VOLU in the SMPG Event Interpretation Grid, with voting options such as CONY (vote in favour), CONN (vote against), ABST (abstain), PROX (appoint a proxy), SPLI (split votes) and NOAC. Expect the meeting date and place, a record date, the market deadline and your account servicer’s response deadline.
  • Similar events: CONS collects the same kind of approval in writing without a meeting, and some markets use CONS instead of BMET. MEET, OMET and XMET are shareholder meetings; CMET is a court-ordered meeting.
  • In ISO 20022, BMET is not one of the corporate action event types used in seev.031. It is a meeting type in the general meeting messages: seev.001 (meeting notification) Mtg/Tp = BMET.

What to do next

  • Send the client the resolutions and the deadline. If the client votes, send an MT565 with the voting option and the nominal amount before the account servicer’s response deadline. Bonds voted are often blocked until the meeting.
  • Watch for an adjourned meeting if the quorum is not reached, and for the follow-up event that carries out the resolution, such as a maturity extension (EXTM), an exchange (EXOF) or a consent fee payment.

Where it appears in MT and ISO 20022

MT (ISO 15022)

  • MT564 sequence A (GENL): :22F::CAEV//BMET, with :22F::CAMV//VOLU.
  • MT565, MT567 and MT568 sequence A: :22F::CAEV//BMET.

MX (ISO 20022)

  • Not a value of CorpActnGnlInf/EvtTp/Cd in seev.031 to seev.039: the ISO 20022 corporate action event type code lists leave BMET out.
  • seev.001 Meeting Notification: Mtg/Tp = BMET (MeetingType4Code); votes are sent with seev.004 (meeting instruction).