Terms and Conditions for 2008 Ontario Savings
Bonds
Types
- The Bonds will be issued in three types: Variable-Rate Bonds,
Step-Up Bonds and Fixed-Rate Bonds (collectively the "Bonds").
Form and Denomination
- The Bonds will be issued in fully registered form in
denominations of $100 and integral multiples of $100.
Status
- The Bonds will be direct obligations of the Province of Ontario
(the "Province") and the principal amount of and interest on the Bonds
will be a charge on and payable out of the Consolidated Revenue Fund of
the Province.
Registrar
- Computershare Trust Company of Canada in the City of Toronto
(together with any successor or replacement registrar called the "Registrar")
has been appointed by the Province as registrar for the Bonds to maintain
a register (the "Register") in the City of Toronto for the names and
addresses of the registered holders of the Bonds and particulars of the
Bonds held by them respectively and in which transfers or exchanges of Bonds
may be registered.
Ownership Eligibility
- The Bonds may only be acquired for or by a beneficial owner
who is at the time of acquisition:
- an individual normally residing in Ontario and
having an Ontario address;
- a corporation, society, non-profit association or
other organization having a permanent establishment in
Ontario; or
- a beneficiary of
- a Registered Retirement Savings Plan,
Registered Retirement Income Fund, Deferred
Profit Sharing Plan, Employee Benefit Plan,
Registered Education Savings Plan, or Registered
Pension Plan, or
- an estate or other trust
where that beneficiary meets the requirements of (a) or
(b) above.
The Province shall have the right to cancel any Bonds
acquired by or for a beneficial owner who does not at the
time of acquisition meet the ownership eligibility
requirements.
Maximum Ownership Limit
The maximum principal amount of Bonds that may be purchased
for or by a beneficial owner during the Selling Period is
$500,000 or such other amount established by the Province during
the Selling Period (the "Dollar Limit"). The Dollar Limit
shall not apply to purchases of Bonds in the secondary market.
When Bonds are beneficially owned jointly, the maximum permitted
principal amount will be the Dollar Limit multiplied by the
number of joint beneficial owners. The Province shall have the
right to require redemption of any Bonds acquired in excess of
the Dollar Limit.
Interest
Variable-Rate Bonds
The Minister of Finance (the "Minister") or other authorized
officer of the Province will set the interest rate per annum
payable on the Variable-Rate Bonds for the six month period
commencing June 21, 2008 on or before June 2, 2008 and may set
and reset the interest rate for the Variable-Rate Bonds from
time to time prior to maturity, by written notice to the
Registrar. The Province will set the interest rate payable on
the Variable-Rate Bonds for any period at least three Business
Days prior to the commencement of the period. Interest will
cease to accrue on the Variable-Rate Bonds on June 21, 2015
(the "Maturity Date" for the Variable-Rate Bonds).
Step-Up Bonds
The Minister or other authorized officer of the Province
will set the interest rates (the "Set Interest Rates ")
payable on the Step-Up Bonds for the term of the Step-Up Bonds
on or before June 2, 2008 and may reset the interest rates
for the Step-Up Bonds from time to time, by written notice to
the Registrar. The interest rates payable on the Step-Up
Bonds shall not be less than the Set Interest Rates. Interest
will cease to accrue on the Step-Up Bonds on June 21, 2013
(the "Maturity Date" for the Step-Up Bonds).
Fixed-Rate Bonds
The Minister or other authorized officer of the Province
will set the interest rate payable on the Fixed-Rate Bonds for
the term of the Fixed-Rate Bonds on or before June 2, 2008 and
may reset the interest rate for the Fixed-Rate Bonds at any
time before June 21, 2008, by written notice to the Registrar.
Interest will cease to accrue on the Fixed-Rate Bonds on
June 21, 2011 (the "Maturity Date" for the Fixed-Rate Bonds).
Unless a registered holder elects by written notice to the
Registrar to have interest paid by direct deposit to a
specified account within Canada, interest will be paid by
cheque mailed to the address of the registered holder in the
Register. The registered holder may change interest payment
arrangements by written notice delivered to the Registrar
except on June 21 or December 21, each a redemption date
( “Redemption Date”), or during the immediately preceding 15 days.
Each of the Variable-Rate Bonds, the Step-Up Bonds and the
Fixed-Rate Bonds will be issued in two forms: Annual Interest
Bonds and Compound Interest Bonds.
Annual Interest Bonds
Simple interest is payable on Annual Interest Bonds, on
June 21, 2009 and every June 21 thereafter up to and including
the Maturity Date for the Bonds or such earlier date on which
the Bonds are redeemed, at the rate set for the Bonds for the
relevant period.
Compound Interest Bonds
Interest on Compound Interest Bonds is compounded annually,
on June 21, 2009 and every June 21 thereafter up to and including
the Maturity Date, at the rate set for the Bonds for each relevant period.
Interest on Compound Interest Bonds accumulates, and is payable, on:
-
the Maturity Date for the Bonds, or
-
in accordance with paragraph 23, when exchanged for Annual
Interest Bonds, or
- if the Bonds are redeemed on a Redemption Date
Joint Holders
Where a Bond is registered in more than one name, the principal
of and interest payable on the Bond shall be paid to or to the order
of all joint registered holders, failing written instructions from
them to the contrary. Such payment shall constitute a valid
discharge to the Province and the Registrar. If paid by cheque,
the cheque shall be sent to the address of the joint holder whose
name stands first in the Register. In the case of the death of one
or more joint registered holders, the principal of and interest on
any Bonds registered in their names may be paid to the survivor or
survivors of such holders and such payment shall constitute a valid
discharge to the Province and the Registrar.
Cancellation
The purchaser may cancel a Purchase Application at any time prior to
the close of business on the expiry or termination of the Selling Period
by providing written notification along with a copy of the Purchase
Application to the branch of the Sales Agent where the purchaser
originally submitted the application.
Redemption Prior to Maturity
The Sales Agents are the redemption agents (the “Redemption Agent”)
for the Bonds. The Variable-Rate Bonds and the Step-Up Bonds are
redeemable prior to maturity at the option of the registered holder
on June 21 or December 21 for their full principal amount by endorsing
the reverse side of the tear-off redemption portion of the Bonds
(the “Payment Instrument”) and presenting and surrendering the Bonds
to be redeemed to a Redemption Agent on or before the fourteenth day
following the Redemption Date. The Payment Instrument must be attached
to the Bonds at the time of surrender otherwise the Bonds will be void.
Redemption of book-based Bonds will be processed according to the
investment dealer’s operating procedures. Interest will accrue on the
Bonds and be paid up to and including the Redemption Date regardless of
whether the Bonds are surrendered for redemption before or after such
date. The Fixed-Rate Bonds are not redeemable prior to maturity except
in accordance with paragraph 18 of these Terms and Conditions.
For December 21 redemptions of Annual Interest Bonds and for June
21 and December 21 redemptions of Compound Interest Bonds, accrued
interest will be paid by the Redemption Agent. For June 21 redemptions
of Annual Interest Bonds, including at maturity, accrued interest will
be paid by the Registrar in accordance with paragraph 10 of these Terms
and Conditions. December 21 redemptions of Annual or Compound Interest
Bonds will be calculated on a semi-annual basis, regardless of the
actual number of days in the period.
Bonds can be redeemed upon death of a beneficial owner, upon
presentation and surrender of the Bonds to the Registrar with such
other documentation as may be reasonably required by the Registrar.
However, any requests for redemption received during the 15 days
immediately preceding a Redemption Date may not be able to be processed
until the Redemption Date. Interest will accrue on the Bonds and
be paid up to and including the date of redemption.
Interest computed for a period of less than one year, other
than the computation of regular half-yearly interest, shall be
calculated on the basis of the actual number of days in the period
and a year of 365 days.
In order to redeem a portion of the principal amount of a Bond,
the registered holder must first exchange the Bond for the equivalent
principal amount of smaller authorized denominations which will
include the amount to be redeemed in accordance with paragraph 22 of
these Terms and Conditions.
Business Day
Payments in respect of principal of and interest on the Bonds
shall only be made on a day other than a Saturday, Sunday or
statutory holiday in Ontario (a "Business Day") and if any date
for payment is not a Business Day, payment shall be made on the
next following Business Day and no further interest shall be paid
in respect of the delay in such payment. In the event that the
fourteenth day following a Redemption Date is not a Business Day,
then for the purposes of paragraph 16 of these Terms and Conditions,
the Bond may be presented and surrendered on the Business Day next
following the fourteenth day.
Exchanges
Bonds may be exchanged at any time for an equivalent principal
amount of Bonds of the same type and in the same form in authorized
denominations by presenting and surrendering the Bonds to be
exchanged to the Registrar. For any exchange, the Registrar shall
not be required to deliver more than five certificates for each of
up to three authorized denominations of Bonds. No exchanges will
be permitted on a Redemption Date or during the immediately
preceding 15 days.
Compound Interest Bonds may be exchanged at any time prior
to maturity for an equivalent principal amount of Annual Interest
Bonds of the same type by presenting and surrendering the
Compound Interest Bonds to be exchanged to the Registrar. No
exchanges of Compound Interest Bonds for Annual Interest Bonds
will be permitted on a Redemption Date or during the immediately
preceding 15 days.
The Registrar will pay on the exchanged Bonds:
- compound interest for the period from June 21, 2008
to the June 21 prior to the date of the exchange, plus
- simple interest, if applicable, to the date of the
exchange.
Simple Interest on the principal amount of the Annual
Interest Bonds received for exchanged Compound Interest Bonds
will accrue from the June 21 prior to the date of the exchange.
Transfers
24. Subject to the requirements of paragraphs 5 and 6 of
these Terms and Conditions being satisfied by presentation of
documentation satisfactory to the Registrar, a Bond may be
transferred by the registered holder by completing a transfer
form and then presenting and surrendering the Bond to the
Registrar for registration in the name of the transferee.
No transfers will be permitted on a Redemption Date or during
the immediately preceding 15 days.
Mutilated, Defaced, Destroyed, Stolen or Lost
Bonds
If a Bond becomes mutilated, defaced, destroyed, stolen
or lost, the Registrar will, at the request of the registered
holder, issue a new Bond in replacement of the mutilated,
defaced, destroyed, stolen or lost Bond upon receipt by the
Registrar of:
- in the case of a mutilated or defaced Bond, the
mutilated or defaced Bond; and
- in the case of a destroyed, stolen or lost Bond
- evidence satisfactory to the Province and Registrar that
the Bond was destroyed, stolen or lost, and
- an indemnity bond issued by a surety company
satisfactory to the Province and the Registrar, in such form
as the Province may require where the cost of the indemnity
arising from the above transaction is borne by the
registered holder.
Not Bound by Trust
Neither the Province nor the Registrar shall be bound to see
to the execution of any trust affecting the ownership of any
Bond or be affected by notice of any equity that may be
subsisting in respect of a Bond. Payments to or to the order
of the registered holder of the Bonds shall discharge the
liability of the Province and the Registrar to the extent of
the sum paid.
Purchases
The Province, may at any time, purchase Bonds in the open
market or by tender or by private contract at any price.
Governing Law
The Bonds are governed by and shall be construed in
accordance with the laws of the Province of Ontario.
Notice
The personal information collected by or on behalf of the
Ontario Financing Authority (“OFA”) in connection with the Ontario Savings
Bonds program is collected under the authority of the
Capital Investment Plan Act, 1993, S.O. 1993, c.23 [s.30(1)], and the
Financial Administration Act, R.S.O. 1990, c. F.12 [ss. 20, 21]. This
information will be used by the OFA and its registrar, fiscal agent,
transfer agent, paying agent and order administrator and the Ministry of
Finance in the administration of the Ontario Savings Bond program.
Questions about the collection of personal information in
relation to Ontario Savings Bonds may be directed to: Manager,
Customer Service Centre, Ministry of Finance, 33 King Street W.,
Oshawa, Ontario L1H 8H5. Telephone: 1-800-263-7965 (general
enquiries), 1-800-668-5821 (service in French), 1-800-263-7776
(TTY).
Income Tax Forms
The Registrar will deliver a T5 tax form to registered holders
on or prior to February 28 each year, for the interest attributable
to the previous calendar year.
Dealing with Registrar
Bondholders may contact the Registrar for transfers, exchanges
and other purposes at:
Computershare Trust Company of Canada
100 University Avenue, 9th Floor
Toronto, Ontario M5J 2Y1
Attention: Bondholder Services
Tel: 1-800-433-3596
Fax: 1-888-453-0330
Internet:
osb@computershare.com
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