Summary of Arguments for Mandatory Payment Triggers: ING and Aegon Hybrids

This is a summary of the arguments so far that may hinder the EC's burden shouldering policy for hybrid security owners (sharing is a political catch phrase, sort of like a campaign slogan, which misleads rather than informs):

1. Any payment made to the Dutch government by Aegon and ING on Junior Securities in May 2009 would trigger a Mandatory Payment Event. (any payment by Aegon would have gone through its majority shareholder, ING directly to the State)

A. Argument: Since the Junior Securities provide for annual payments, with a semi-annual payment in May as a short version of the annual payment to merely align the annual payment schedule to May, then the equivalent payments on the hybrids would be for four quarters. More on ING and AEGON Mandatory Payment Events/Alternative Payment Mechanism: (4 payments=6/15/2009; 9/15/2009; 12/15/2009 and 3/15/2010) The contrary argument would be to align the semi-annual payment with just two quarters (two payments: 6/15/2009 & 9/15/2009). (Added: see subsequent post on Aegon: Nail on the Head for Aegon Mandatory Payment Event? and see subsequent Post on ING's payment to the Dutch State in May 2009: Sold 1/2 INZ (see disclaimer)/ING Paid the Dutch State in May 2009 )

2. Any purchase of a Junior Security Triggers the Mandatory Payment provisions. Pay Back Dutch Government=Buying Junior Security=Mandatory Payment Event/Bond Investing Process

3. Argue that Alternative Interest Satisfaction Mechanism has to be followed by Aegon to pay a dividend required to be deferred by the Hugo Chavez wannabes in the EU.

If and when a deferral takes place in violation of one of the above, then I would hope that institutional investors would take all appropriate legal actions immediately in the U.S. courts.

(added 8/28/09: I found this statement in a recent Aegon filing relevant to the last sentence in the original post: "The United States and the Netherlands do not currently have a treaty providing for the reciprocal recognition and enforcement of judgments (other than arbitration awards) in civil and commercial matters. Judgments of US courts, including those predicated on the civil liability provisions of the federal securities laws of the United States, may not be enforceable in Dutch courts. Therefore, our shareholders that obtain a judgment against us in the United States may not be able to require us to pay the amount of the judgment unless a competent court in the Netherlands gives binding effect to the judgment. It may, however, be possible for a US investor to bring an original action in a Dutch court to enforce liabilities against us, our affiliates, directors, officers or any expert named therein who reside outside the United States, based upon the US federal securities laws." Pages S 12-13 www.sec.gov/