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GK, thanks for your explanations. I had looked at the term on the web after my initial post, and realized that as you mentioned, the equity swap is a "financial derivative contract (a swap) where a set of future cash flows are agreed to be exchanged between two counterparties at set dates in the future" (still do not what exactly this long sentence mean, but noticed that the number of shares are notational, similar to that in the derivative of CFD (contract for difference)).

These smart big banks, including JPM and Citi, plays with other money and takes little risk of their own, and earn big money easily - 30 millionaires made (if the money gives to 30 different people) in a few weeks for managing the stage 2 placement/open office, 150 millionaires made in arranging RCF and H.Y.bond issuance. Given the 5% stake in SM they got as a very low cost, hopefully, Citi will take some risk to help backstop the insurance of the $500m initial bonds.

In the Equity Swap derivative contract, the share numbers are notational; similar to the number of shares in CFD. Citi would receive dividends from these, but no added voting rights.
We have seen convertible bonds, cornerstone investment, common shares, and talked about h.y.bonds, warrants, retail bonds, commercial loans, IPA guaranteed loans, and now more sophisticated Equity Swap. We are gradually become financial literaties well before many of us enjoyed some good value from them - hopefully the value will start to appear, soon.

It is great to see that CF and the bank he had worked for are still linked, with Citi becoming one of the largest II investors of SM. Citi is very good at H.Y.Bond (arranged the Fortescue H.Y.bond fundraising with CF as the bank advisory), with such engagement SM has got the support of the two largest banks in the U.S. and the world (together with other big ones (e.g., Norge bank and Quatar) in the world. This is of course very positive!

It is very interesting to know how the cash can be computed from the number of shares at different pre-determined dates - function of the share price at the time and the current share price?

The new shares to be issued with equity swap are around 100m shares, less than what CF had. Therefore, the dilution introduced by this is tiny.
Among the whole 5% percent, about 3% are new CB.
Were those from stage 2.1 or new? if new, then there would be some new dilution above those new CB issued on the 30th of April.

Has anyone found a good explanation of this Citi RNS (any post on this board or elsewhere)?

It seems that they bought some shares from the open market very recently (13-August-2019) to reach 35.4m shares (0.5057%); together with a deal with lots of ''equity swap" at certain date, and new CB (they did in Stage 2.1).
The whole arrangement of this is to cross the 5% threshold and trigger a positive RNS.

SM seems to many new shares pre-sold to Citi at certain further dates (with the number of shares fixed, while the cash to be raised would be based on the share price at those dates. Citi's involvement would enhance the market confidence to SM, although such fundraising would also introduce some dilution to existing shareholders.

As I have not seen any published article on the news yet, is the above understanding correct? or Anyone could provide a better explanation?

Chilting, yes, agree. As JPM mentioned in their report, the market will price in an equity call as a response to the withdraw. As a new firm placement and open offer became difficult to do distorted share price environment, CB would be the only choice and last resort. The key to enhance the confidence of the potential investors, with a more clearer message on its management of the construction risk and marketing risk, and especially on how these debt could be return using the cash flow from the mine. As the worse case scenarios is built in the price, if positive news arrives, a (big) relief rally can be expected.

A spokesman for the company explained that the trade war ramping up between the US and China had caused a negative impact on the market, prompting Sirius to postpone the bond issue. He said: "It's not a cancellation, construction is still going ahead, and we plan to reissue [the bonds] by the end of September."
https://www.whitbygazette.co.uk/business/sirius-minerals-reassures-investors-after-share-value-drops-1-9932081

Trump made the comments on the U.S. China trade war on the 2rd of August (a Friday). Due to the rising risk, safer investments, e.g., gold and investment grade bonds rises; While share prices on the major stock markets experienced a big drop, so was the high risk high yield bonds.

One day before the Trump's comment, US High Yield CCC Effective Yield was at 11.65% (1 August); while on Monday after the comment (5 August), the index jumped to 12.06%. On the day the SM bond to be closed if without the withdraw (9 August), the index value became 12.14%. I.e., (0.49%) nearly half a point jump before and after comment in the few days critical to the SM bond issuance. The even larger impact is on potential investors' sentiment, from risk on to risk avert.
Multiple articles before the event have indicated that due to extreme low interest rate, the investment grade bonds became unpopular; while quality high yield bonds have become increasingly popular. It was very unlucky that such event happened at this critical time to SM bond. https://ycharts.com/indicators/us_high_yield_ccc_effective_yield

The US High Yield CCC Effective Yield index has been on an upper trend since early May; The S&P U.S. High Yield Corporate Bond Index has also shown that interest rates of high yield bonds are in an upper trend. It might be unrealistic to expect the hgh yield bond interest rate to drop significantly in next a few weeks or months. What we may expect is that the market may settle down and investors may readjust their expectations (for them to realize that the jump could not continue, it may drop slightly some days after the event, be stabilized in the next few weeks, and back to its gradual upper trend). https://us.spindices.com/indices/fixed-income/sp-us-high-yield-corporate-bond-index

A round of Fed rate cut has already started, just before the planned issuance of the SM bonds. Its first cut was not as bigger as expected (i.e., only 0.25% rather than the widely expected 0.5%), which also brought disappointment to the potential investors of the first tranche of the SM bonds. However, it has become more and more clear that Feb would continue its cut and the next on in September might be bigger. Such new trend of the base interest rate cut by the central banks may improve the market condition for the high yield bonds (i.e., making them more appealing in comparison to the bank long term savings and the investment grade bonds).

Sirius said that the criticism from a competitor gave it “even greater confidence that we are on the right path”.

duracellAA, GK posted this today with the link
https://ycharts.com/indicators/us_high_yield_ccc_effective_yield

It is an index of US High Yield CCC Effective Yield. The average is my simple interpretation, as share index is normal a kind of (weighted) average of many shares in the category. CCC is one notch below Single B, but it may provide us some indication of the tread on the rate of H.Y.bond in similar ratings.

avocet, yes, more info in the rns would have been very helpful.
They did reveal the info to infer that there were enough takers before the Trump comment on the 2nd of August (Friday).
Then when the market reopen on the 5th of August, the index (i.e., the average rate) jump 0.28% from 11.78% to 12.06%.
It seemed that the average rate could rise further in next few days; Some potential investors retreated, and this made the success of the issuance in danger. It seems that to avoid a possible failure, SM/JPM decided to temperately withdraw, and to revisit later. Given the index value did have a further rise on the 7th to 12.21%, however, on the 8 August, it dropped to 12.04% (one day before the 9th when the bid close), the impact of the Trump event seems not as big as many had thought, or the market settled down quicker than many had expected. Looking backwards, it seems that if JPM/SM did not withdraw, the offer may still have a chance to success tomorrow (the 9th of August as planned). Let's have a look at the average rate tomorrow, to see if the rate drop further. But, we may agree to take a chance is not a good way to the execution by JPM/CF, i.e., to withdraw might be the right decision at the time.

GK, from the link on the H.Y. index you provided, we can see that the Trump trade war comment on the 2rd of August did cause a small jump on the index, but since then, the index seemed to have settled down - without moving further up and started to drop back slightly:

Aug. 8, 2019 12.04%
Aug. 7, 2019 12.21%
Aug. 6, 2019 12.03%
Aug. 5, 2019 12.06%
Aug. 2, 2019 11.78%
Aug. 1, 2019 11.65%
July 31, 2019 11.59%

The index was peaked at 13.71 in the December 2018 and then dropped to 10.67% in the 2rd May 2019, i.e., when the stage 2 solution announced. If SM and JPM did the H.Y.bond issuance in early May, the rate of SM bond might be lower. Hopefully, the rate will drop back to 11% and 10% range in next few weeks.

LITC, in addition to CF, you may also consider contact the RS and TS.
CF has a banker's mentality - the investors/shareholders at your own risk. He said multiple times publicly that he places the employee interest in his mine and those who purchased shares at their own risk.
I have no doubt that he will do his best to have the jobs kept and the mine built, and if the share diluted, he would try to compensate the shareholding employees with shares at null cost. He has the largest number of shares, however, few of them were bought using his own money (although his one year salary could pay the cost of the basis entitlement in stage 2.1 open offer, he did not buy any). The same is true to TS on not using his own money to buy the shares.
Only RS bought a lot, i.e., most parts of his holdings, using his money.
These are key management of the company, therefore, it might be better to contact them all.
As you can see, most of people on this board in these few days strongly support this shareholder's bond idea, and would be willing to take part in this fundraising for the critical $500m to have the value of our own shares saved, the senior debt event triggered, and the mine built.

KOH: "What can we do to publicize it? It's time to act, nobody reads those boards. What can we do to let them know? How can we make all the investors aware about our conversation (I assume very few actively follow boards like those)? Any ideas? We need some good PR here. Maybe we could start writing to newspapers / media giving them some good content to write (hundreds of desperate shareholders offering their support to struggling company) - they could make headlines out of it."

I suggest to establish a shareholder committee (on retail bond), and ask those who have had successful contact with Sirius (e.g., Fred and a few others) to send them this proposal to them (investor relation), and look forward to their response.

The Sirous share has been refered to as a retail share due to its large shareholder base, 85000 or more, one of largest in the uk. This was considered as a weakness, when the stability of the share price and the deep pocket support are the concern. However, if the retail bond can be managed togethet and linked to it shares, than it could become one Sirius strength. The key to this is that they put shareholder value, the interest of its large number of shareholders, in their heart (not just interest of their employees, i.e., not just job kept, mine built but PI'value excessively diluted or PI totally wiped out)

https://www.lseg.com/resources/perspectives-global-markets/raising-finance/rise-retail-bond

LITC, with this retail bond your shareholder bond idea becomes practically operational.

Myo, is your mentioned "Peoples bond" something similar to loan-based crowdfunding plus a "Peoples media campaign" to promote it?

" ... loan-based crowdfunding and equity-based crowdfunding are under the scope of the UK law. Financial Conduct Authority (FCA), the regulatory body introduced a set of regulations for the peer-to-peer sector in 2014"
https://en.wikipedia.org/wiki/Crowdfunding#Debt-based
There are quite a few peer to peer platform to do this sort of things.

Myo: "... Given the nature of the 'initial' bond.....(happy to be called wrong) I believe that it can't be promoted to anyone other than 'professional' investors...".

The largest II shareholder of Sirius, Pelham Capital (353.59m, 5.06%), sell fixed rate Bonds (with Minimum investment £1,000 Eligible within an ISA) as their major business. One possibility is to have Pelham organize this, i.e., to purchase the $500m with 13.5% coupon bonds from JPM, and then manage the sell/allocation/distribution of the notes to entitled sxx existing shareholders with a coupon 13% (the 0.5% left to it as fees).

Pelham Capital current sell fixed rate Bonds up to 3.50% AER. On their website, they said "We offer fixed rate Bonds that are specifically designed to provide you with highly competitive and consistent returns". It is true, as this moment, we cannot get 3.5% in savings. However, this is much lower than the 13% SM bond (which is secured and guaranteed one).

" ... loan-based crowdfunding and equity-based crowdfunding are under the scope of the UK law. Financial Conduct Authority (FCA), the regulatory body introduced a set of regulations for the peer-to-peer sector in 2014"

Another alternative:
Can SM collect this $5000m from loan-based crowdfunding ?

LITC: "... if the 85,000 pi's were offered to take up an on-average £5 K senior secured fixed-term loan note offering 13.5% annual interest, which would then unlock the $2.5bn JPM credit facility to take company to full production, I imagine those shareholders would snap them up in a blink of an eye!"

Great idea! Why not?
"Other types of securities, besides shares, can be offered publicly. Bonds, warrants, capital notes and many other kinds of debt and equity vehicles are offered, issued and traded in public capital markets. ...A public company may also offer and list other securities alongside its shares" (https://en.wikipedia.org/wiki/Public_offering)

This could be tried before the revisit to the H.Y.bond market.
One of the SM house brokers, Liberum/ShoreCapital/JPM, may help manage the issuance of a SM bond with a 13.5% coupon, in a way similar to they manage the open offer (every existing shareholder is entitled to take one $5000 worth note; plus some available excessive notes that every shareholder could apply for). If the issuance is not successful (i.e., $500m not reached), then the money will be fully returned; if successful, only those money for unsuccessful excessive applications will be returned. The raised $500m debt will be handed to JPM and they place in its escrow account for it to trigger the senior debt event. In this way, there will be no dilution to our shares, our existing shares are saved together with a secured guaranteed high yield note that we cannot get from any where.