Each capital security represents an undivided preferred beneficial interest in the assets of Haven Capital. Each capital security that you own will entitle you to receive quarterly distributions as described in this prospectus. The underwriters are offering 2,200,000 capital securities at a price of $10.00 for each capital security, plus any accumulated distributions on the capital securities from May 26, 1999.
If you purchase any capital securities, you will be entitled to receive quarterly cash distributions at an annual rate of 10.25% of the liquidation amount of $10.00 for each capital security. You will be entitled to be paid distributions on March 31, June 30, September 30 and December 31 of each year, beginning June 30, 1999. The amount of each distribution will include amounts accrued up to the date the distribution is due. These payments are identical to the payments that we are required to make under the subordinated debentures.
We can, on one or more occasions, defer interest payments on the subordinated debentures for up to 20 consecutive quarters, unless an event of default exists under the subordinated debentures. We cannot defer interest payments beyond June 30, 2029, the stated maturity date of the subordinated debentures.
If we defer interest payments on the subordinated debentures, Haven Capital will also defer distributions on the capital securities. During this deferral period, the capital securities will still accumulate distributions at an annual rate of 10.25% of the liquidation amount of $10.00 for each capital security. Additionally, any unpaid distributions on the capital securities will accumulate additional distributions at the same rate, compounded quarterly, to the extent permitted by law. If Haven Capital defers your distributions, you will still be required to accrue interest income and include it in your gross income for U.S. federal income tax purposes, even if you are a cash basis taxpayer.
REDEMPTION OF THE CAPITAL SECURITIES
Haven Capital will redeem the capital securities when we pay the subordinated debentures at maturity on June 30, 2029. In addition, if we redeem some or all of the subordinated debentures before maturity, Haven Capital will use the cash it receives from the redemption of the subordinated debentures to redeem proportionately an amount of capital securities and common securities having an aggregate liquidation amount (the number of securities times $10.00) equal to the aggregate principal amount of the subordinated debentures that we redeem.
We can redeem some or all of the subordinated debentures at any time on or after June 30, 2009 and before June 30, 2029 at their principal amount plus any accrued and unpaid interest to the date of redemption. If we redeem any subordinated debentures on or after June 30, 2009, we will pay a premium that declines each year from 5.125% beginning on June 30, 2009 to 0% on or after June 30, 2019.
We can redeem all of the subordinated debentures at any time before June 30, 2029 at their principal amount plus any accrued and unpaid interest to the date of redemption if changes in the bank regulatory, investment company or tax laws occur that would adversely impact the status of Haven Capital, the trust securities or the subordinated debentures.
We may have to obtain regulatory approvals, including the approval of the Office of Thrift Supervision, before we redeem any subordinated debentures prior to maturity.