Corporate action events
CONS: Consent
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CONS is a consent solicitation: the issuer or another party asks holders to approve a proposal, typically a change to a bond’s terms, in writing and without calling a meeting. Holders consent, refuse, abstain or do nothing, and may receive a fee for consenting.
- Code
- CONS
- Usually announced as
- VOLU
What CONS means
Changing a bond’s terms needs the approval of a set share of its holders. A consent solicitation collects that approval by written instruction within a deadline, which is faster and cheaper than a meeting. Typical proposals are covenant changes, waivers, maturity changes or approval of a merger of the issuer.
To attract votes the issuer often pays a consent fee to holders who consent, sometimes a higher early fee for consents received before an early deadline. If the required majority is reached, the change binds every holder. Consent is often combined with an exchange or tender offer, where the consent is given as part of accepting the offer.
When you see it
- An MT564 with
:22F::CAEV//CONSand:22F::CAMV//VOLU, optionsCONY(consent),CONN(do not consent),ABSTandNOAC. Expect the market deadline and the account servicer’s response deadline, often a record date and period of action, and a payment date when a consent fee is paid (the Singapore column of the SMPG grid sets these out). A consent fee rate can be given as:92a::SOFEand the type of consent as:22F::CONS//CTRM(change in terms) or//DUPY(due and payable). - Differences: BMET is a physical bondholder meeting, and Euronext notes that CONS can be used instead of BMET. When a consent is attached to another event such as TEND or EXOF, that event can carry
:22F::ADDB//CONSinstead of a separate CONS event.
What to do next
- Collect the client decision and instruct with an MT565 before the response deadline, earlier if an early consent fee is offered. Consented bonds may be blocked until the solicitation ends.
- When the result is announced, check whether the proposal passed, update the bond terms if it did, and reconcile any consent fee paid in the MT566 against the bonds you consented.