Housing Securities gets holder approval to amend stock terms in connection with exchange offer

By Jennifer Chiou

New York, Feb. 27 - Housing Securities 2 announced that stockholders passed a proposal to amend the terms of the company's stock in connection with the previously announced exchange offer for £72.55 million of the £180.85 million of 8 3/8% debenture stock 2019 issued by Housing Securities Ltd.

As reported, investors had tendered £44,825,606 of the 8 3/8% debenture stock as of the close of business on Feb. 14.

As previously announced, the company was offering to issue new sterling-denominated fixed-rate secured bonds in exchange for £72.55 million principal amount of the existing stock.

The exchange offer ended at noon ET on Feb. 26. It began on Feb. 4.

The voting instruction fee will be 0.15%.

Along with the offer, the company asked stockholders to vote on the amendment at a meeting, which took place at 5 a.m. ET on Feb. 27.

According to a prior press release, stockholders will receive the full payment regardless of when they participate in the offer. Originally, those who delivered their exchange instructions after the revocation deadline of noon ET on Feb. 14 would have received a payment reduced by 2%.

Also, exchange instructions received beginning Feb. 17 under the offer were to be accepted in full until the offer cap is reached.

The principal amount of each holder's stock accepted for exchange was not to be scaled down pari passu and on a pro rata basis if the target acceptance size was exceeded.

The new issuer reserved the right not to accept any exchange instructions, the company already noted.

According to a filing with the London Stock Exchange, the payment of any voting instruction fee is conditional on the new issuer announcing that other conditions to the exchange offer have been satisfied or waived.

Pricing for the exchange offer will be set at 10 a.m. ET on March 3 to reflect the yield to maturity using the exchange yield, which will be the sum of the Stock Benchmark Gilt rate and the exchange spread of 100 basis points.

The proceeds of the stock issue were used to fund secured loans to 18 registered providers of social housing, the company previously said. Seven of the borrowers are asking to extend the maturity of their loans and lower the interest cost and, in some cases, to borrow additional amounts.

The new issue yield will be set using the bond benchmark gilt rate and a new spread of 120 bps.

The new issue price shall be as close as possible to 100% of the nominal amount of the new bonds.

The exchange offer is conditioned on a minimum amount of £38.5 million of net cash proceeds from the issue of additional new bonds and on a minimum of £72.55 million principal amount of the stock offered for exchange.

The dealer manager was Deutsche Bank AG, London Branch (+44 20 7545 8011, attn: liability management, email: liability.management@db.com). The receiving agent was Computershare Investor Services plc (corporate action projects, +44 0 870 707 1060, investorcentre.com/contactus).

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