KBK Capital Trust I issued 1,725,000 shares of mandatorily redeemable Trust Preferred Securities in 1998. The principal assets of the Trust are approximately $16.0 million in subordinated debentures issued by KBK Capital (now known as U.S. Growth Funds Corporation). The subordinated debentures, which are eliminated upon consolidation of the Trust with the Company, bear interest at a rate of 9.50% and mature in 2028, subject to extension or earlier redemption in certain events.
U.S. Growth Funds owns all of the common securities of the Trust and a subsidiary owns 1,577,853 TruPS shares (at 12/31/18).
The Preferred Securities are redeemable for cash, at the option of the Trust, in whole or in part, at a redemption price of $10.00 per share plus accumulated and unpaid distributions thereon. The Preferred Securities will also be redeemable upon the repayment either at maturity of the Debentures or as a result of the acceleration of the Debentures upon an event of default.
Distributions on the Preferred Securities are cumulative and accrue at 9.50% per annum on the sum of liquidation value thereof, plus unpaid distributions, which have been accrued in prior quarters. Accrued and unpaid distributions are reflected in accounts payable and other liabilities in the accompanying consolidated balance sheets.