RBS prices exchange offer for £300 million notes issued by Bishopsgate

By Susanna Moon

Chicago, April 5 - The Royal Bank of Scotland plc said it priced the exchange offers for £300 million of 5.1075% guaranteed asset-backed fixed-rate notes due Sept. 28, 2037 issued by Bishopsgate Asset Finance Ltd.

RBS offered to issue £600 million 5.125% guaranteed notes due Sept. 28, 2037 issued by Thames Water Utilities Finance plc and irrevocably and unconditionally guaranteed by Thames Water Utilities Ltd., Thames Water Utilities Holdings Ltd., Thames Water Utilities Cayman Finance Ltd. and Thames Water Utilities Cayman Holdings Ltd.

The bank accepted £204,708,000 of the Bishopsgate notes and will deliver £203,305,000 of the Thames notes, according to a press release Thursday. The exchange ratio is 0.993276. The exchange bid-side benchmark gilt rate is 3.218%. It was based on the 4.25% U.K. Treasury note due 2036.

The existing notes spread was determined based on the nominal amount of existing notes that are offered for exchange as set out below:

• 160 basis points for up to £49,999,000;

• 159 bps for £50 million to £99,999,000; and

• 158 bps for £100 million or more.

Pricing for the existing notes is as follows: the notes yield is 4.8556%; the notes price is 103.607; and the notes consideration is 106.356%.

Pricing for the Thames notes is as follows: the notes yield is 4.8248%; the notes price is 104.317%; and the notes consideration is 107.076%.

RBS explained the rationale for the exchange offer in a previous release. The bank executed several bilateral trades in the open markets with noteholders seeking to switch their notes for the Thames notes, reducing the amount of notes to £205,168,000.

RBS received enquiries from other holders also considering the switch and were "cognizant" of the fact that more exchanges could reduce the nominal outstanding amount to less than £200 million, the release said.

Settlement is expected to occur on April 12.

RBC Europe Limited (+44 20 7029 7486 or e-mail: liability.management@rbccm.com) and Royal Bank of Scotland plc (+44 20 7085 5991 or e-mail: liabilitymanagement@rbs.com) are the dealer managers. Lucid Issuer Services Ltd. (+44 20 7704 0880, fax +44 20 7067 9098 or e-mail: bishopsgate@lucid-is.com, attn: Sunjeeve Patel / David Shilson) is the exchange agent.

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