Credit Agricole gets early exchange tenders of £383.45 million notes

By Wendy Van Sickle

Columbus, Ohio, June 7 – Credit Agricole SA said it took in tenders of £383,445,000 of notes by the early deadline of its offer to exchange any and all of its outstanding legacy undated deeply subordinated additional tier 1 fixed-rate resettable sterling notes for an equivalent principal amount of its new undated deeply subordinated additional tier 1 fixed-rate resettable sterling notes, according to a news release.

The new bonds have similar economic terms as the existing notes, except that the Libor-linked mid-swap rate is replaced with a Sonia-linked mid-swap rate.

Until the reset interest rate on or around the first call date of June 23, 2026, the existing and new notes bear interest at 7.5%.

The reset rate of interest for the new notes will apply a Sonia-linked five-year mid-swap rate, adjusted by an ISDA-based adjustment spread of 27.66 basis points to reflect the economic difference between Libor and Sonia rates. The margin will remain 453.5 bps.

The terms and conditions of the new notes are updated to qualify as additional tier 1 capital under current banking regulations, including the introduction of a contractual recognition of bail-in clause, following the departure of the United Kingdom from the European Union. The existing notes are grandfathered as additional tier 1 capital until June 28, 2025, but not thereafter.

Further, the new notes contain some technical changes to align them with current market practices for securities of their type, including changing the voting majority required for consent to modifications of the terms to a 75% majority from a unanimous majority.

The offer was announced on May 20, and the early deadline was noon ET on June 4.

The issuer will pay holders who submitted their notes for exchange by the early deadline an early participation premium of £1 per £1,000 principal amount.

Holders will also receive £15.90 of accrued interest per £1,000 principal amount.

The offer will remain open until noon ET on June 18.

The offer was subject to a £250 million minimum condition, which condition has been met.

Credit Agricole is a cooperative bank based in Montrouge, France.

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