Citycon delays pricing, settlement of tenders for euro, krone notes

By Sarah Lizee

Olympia, Wash., Nov. 18 – Citycon Oyj has decided to postpone the pricing and settlement of its offer to purchase any and all of its €500 million 3.75% notes due 2020 and to purchase a capped amount of the €300 million 2.375% guaranteed notes due 2022 and the €350 million 2.5% guaranteed notes due 2024 of Citycon Treasury BV.

Additionally, the company decided to postpone the acceptance deadline and payment date of its separate conditional Dutch tender offer for up to NOK 900 million of the NOK 1.25 billion bonds due March 1, 2021 issued by Citycon Treasury.

As of the expiration time at 11 a.m. on Nov. 15, €143,063,000 of the 3.75% notes, €91,734,000 of the 2.375% notes and €33,832,000 of the 2.375% notes had been tendered under the euro tender offers. Additionally, NOK 1.1 billion of the bonds had been tendered under the Dutch tender offer.

The offeror said it has decided to postpone the final results, pricing and payment date of the offers until Nov. 19, due to the pending satisfaction of the financing condition for the euro notes. Previously, Citycon had said it expected to issue €400 million of new subordinated fixed- to reset-rate capital securities on or before Nov. 21.

The company said it expects to announce pricing by no later than Nov. 19. Pricing was previously scheduled to be set by 4 a.m. ET on Nov. 18. Settlement was expected for Nov. 21.

As previously reported, the company is tendering for the following euro series:

• Any and all of the €218,674,000 3.75% notes due 2020, with pricing to be set using a purchase yield of negative 0.2% for an expected purchase price of 102.336;

• A capped amount of the €300 million 2.375% guaranteed notes due 2022, with pricing to be set using the interpolated mid-swap rate plus 65 basis points; and

• A capped amount of the €350 million 2.5% guaranteed notes due 2024, with pricing to be set using the interpolated mid-swap rate plus 140 bps.

Should the settlement date change, the purchase price for the 3.75% notes will be recalculated.

Citycon said it will first accept any and all of the tendered 2020 notes, and, if the total amount payable for the 2020 notes is less than €250 million, it will accept a capped amount of tendered 2022 and 2024 notes.

The cap will be no greater than €250 million less the total amount payable for the 2020 notes accepted for purchase.

The offeror said it will determine the allocation of the offer cap between the 2022 and 2024 notes.

The company said the purpose of the tender and new issue is to reduce its leverage and optimize its capital structure.

Tendered 2022 and 2024 notes accepted for purchase will be subject to proration.

The net proceeds of the new notes will be used, among other things, to purchase notes under the tender offer.

The Dutch tender offer process is being conducted as a reverse Dutch auction, where the offeror through the arranger, Danske Bank A/S, receives offers from the bondholders on a confidential basis for sales of desired volumes at desired prices to the offeror.

All bondholders were invited and eligible to provide offers for sale of all or a portion of their bonds.

The deadline to submit offers was 11 a.m. ET on Nov. 15.

Danske Bank (+45 33 64 88 51, liabilitymanagement@danskebank.dk) and UBS Europe SE (+44 20 7568 1121, ol-liabilitymanagement-eu@ubs.com) are the dealer managers.

Lucid Issuer Services Ltd. (+44 20 7704 0880, citycon@lucid-is.com) is the tender agent.

Citycon is a Helsinki, Finland-based property investment company with a focus on retail centers.

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