UTC only a trustee for bond

The UTC acted in its role as trustee in the EFCL bond transaction.

A bond trustee and its role are defined as follows: • An independent and impartial third party to the bond instrument who has a fiduciary responsibility to the bondholders which is discharged in accordance with the trust deed.

• A trustee has as its primary function a fiduciary responsibility to the bondholders which is discharged in accordance with an executed bond trust deed.

• The trustee neither finances nor is at any time liable to make any payments in relation to the outstanding balances of a bond issuer.

• A trustee serves as the representative of the bondholders and this role is entirely separate from that of an investor and of other fiduciary functions, such as the paying agent and bond registrar.

In layman’s language, the trustee acts as the “referee” between the two sides or teams which consist of the issuer of the bond (in this case EFCL) and the bondholders (which include banks, pension funds, insurance companies, mutual funds and individuals who hold the bond).

The trustee as “referee” uses the rules of the game, in financial lexicon referred to as the “trust deed”, to ensure that all terms and conditions are adhered to.

In this regard, the UTC as trustee was in no way liable to make any payments in lieu of the issuer, or “financed a call option” (in the words of the editorial) for the EFCL bond.

Rather, the UTC in its role as trustee followed the dictates of the trust deed to call a meeting of the bondholders.

It is the right of a bond issuer to make requests of the bondholders.

It is the right of the bondholders to approve or deny such requests.

If a request is made by an issuer, it is the duty of the trustee to convene a meeting of the bondholders to so deliberate, and to do this in line with what pertains in the trust deed.

In summary, we find the references made about the UTC in the editorial uninformed and inflammatory.

We wish that this unfortunate incident leads to a greater level of research and due diligence in financial reporting, as well as due care for the sterling reputation of the UTC, which has been hard earned over three and a half decades of service to the people of TT .

UNIT TRUST CORPORATION