Blue Sky sets out policy for Pips on HBOS deal
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Blue Sky will not confirm what stock will replace HBOS but has suggested it is likely to be Standard Chartered.
Last week's turmoil in the UK stockmarket saw HBOS shares to fall to 182p, dipping below the strike prices of the first two issues of Blue Sky's Pips, which are 226p and 195p respectively.
The HBOS share price currently has to return to 645p in the original plan and 557p in the second plan by maturity in 2014 for capital to be repaid in full. If it fails to do so, capital is lost on a 1 per cent for 1 per cent basis in the value of the individual worst-performing stock from its original level.
A Blue Sky spokesperson says in the event of an HBOS and Lloyds TSB deal, the merged stock will have to return to "an adjusted strike price" by 2014 in order for investors to regain their full capital.
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