Motability tenders for up to £150 million of 5.25% notes due 2016

By Susanna Moon

Chicago, May 27 – Motability Operations Group plc said it began a tender offer for up to £150 million of its £500 million 5.25% notes due Sept. 28, 2016.

The notes are guaranteed on a joint and several basis by Motability Operations Ltd. and Motability Hire Purchase Ltd.

Pricing will be set at 9 a.m. ET on June 9 by using the purchase yield of the 4% U.K. Treasury gilt due September 2016 plus a purchase spread of 15 basis points, according to a company notice.

The purchase price is intended to reflect a yield to maturity of the notes on the settlement date based on the purchase yield, the release noted.

The company will also pay accrued interest.

The tender offer is contingent on the new issue of euro-denominated guaranteed fixed-rate notes.

Holders must tender their notes under the offer by 11 a.m. ET on June 8, with settlement set for June 12.

Tender instructions must be submitted for a minimum nominal amount of at least £50,000 and in integral multiples of £1,000 after that.

Barclays Bank plc (+44 20 3134 8515 or eu.lm@barclays.com) and Royal Bank of Scotland plc (+44 20 7085 9972 or liabilitymanagement@rbs.com) are the dealer managers. Lucid Issuer Services Ltd. (+44 20 7704 0880 or motability@lucid-is.com) is the tender agent.

The offer is being conducted to optimize the company’s debt maturity profile, to refinance debt maturities in advance and take advantage of current favorable market conditions, the company said in the press release.

Motability is a Harlow, England-based government-chartered charity that helps provide qualified disabled individuals (civilian and military) with affordable lease or purchase financing for transportation – primarily modified automobiles or vans, but also motorized wheelchairs and scooters.

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