Novo Banco gives tender results for 12 note series, scraps proposals

By Wendy Van Sickle

Columbus, Ohio, July 28 – Novo Banco SA terminated its proposals related to several series of notes on Wednesday and then announced results of its tender offers for the notes, according to a notice.

The company received and accepted total tenders of €563.99 million notes under the offers.

The company announced the tender offers for 12 series of notes and the now-canceled proposals on July 9. Meetings for the notes will still take place, but holders will not be voting on an extraordinary resolution.

Under the proposals, the company was seeking approval of the extraordinary resolution that would allow for modifications to the terms and conditions to allow the issuer to redeem all of the securities remaining following completion of the offer.

Tender offers

Novo Banco accepted tenders in the following amounts for the notes:

• None of the €64,201,000 outstanding of the €150 million series 3 fixed-rate notes due January 2043 (ISIN: XS0869315241) for a purchase price of 99.5;

• None of the €26,127,000 of the €131,226,000 outstanding of €150 million series 4 fixed-rate notes due January 2043 (ISIN: XS0877741479) for a purchase price of 99.5;

• None of the €96,919,000 outstanding of €150 million series 3 fixed-rate notes due February 2043 (ISIN: XS0888530911) for a purchase price of 99.5;

• None of the €70,009,000 outstanding of €150 million series 6 fixed-rate notes due March 2043 (ISIN: XS0897950878) for a purchase price of 99.5;

• €430,000 of the €8,895,000 nominal amount outstanding, €1,836,539 amortized amount outstanding, of €300 million series 57 zero-coupon notes due July 2044 (ISIN: XS0439764191), issued by NB Finance Ltd. which replaced BES Finance Ltd. as original issuer, for a purchase price of 36;

• €26,127,000 of the €63.09 million nominal amount outstanding, €11,804,798 amortized amount outstanding, of €400 million series 20 zero-coupon notes due April 2046 (ISIN: XS1058257905) for a purchase price of 32.65;

• €54,515,000 of the €274,356,000 nominal amount outstanding, €44,947,671 amortized amount outstanding, of €400 million of series 18 zero-coupon notes due April 2048 (ISIN: XS1053939978) for a purchase price of 30.55;

• €27,239,000 of the €212,652,000 nominal amount outstanding, €33,686,163 amortized amount outstanding, of €300 million series 7 zero-coupon notes due October 2048 (ISIN: XS0972653132) for a purchase price of 29.5;

• €46,638,000 of the €291,449,000 nominal amount outstanding, €45,223,718 amortized amount outstanding, of €400 million series 11 zero-coupon notes due February 2049 (ISIN: XS1031115014) for a purchase price of 29.375;

• €258,567,000 nominal amount outstanding, €39,918,389 amortized amount outstanding, of €400 million series 12 zero-coupon notes due February 2049 (ISIN: XS1034421419) for a purchase price of 29.45;

• €149,153,000 of the €257,202,000 nominal amount outstanding, €34,760,557 amortized amount outstanding, of €400 million series 13 zero-coupon notes due February 2051 (ISIN: XS1038896426) for a purchase price of 26.8;

• €36,502,000 of the €112,485,000 nominal amount outstanding, €15,119,940 amortized amount outstanding, of the series 14 zero-coupon notes due March 2051 (ISIN: XS1042343308) for a purchase price of 26.7; and

• €33.37 million of the €297,335,000 nominal amount outstanding, €37,260,312 amortized amount outstanding, of €400 million series 19 zero-coupon notes due April 2052 (ISIN: XS1055501974) for a purchase price of 25.5.

Interest will also be paid.

As reported, to be eligible for the full purchase price, tendering security holders could not attend the relevant noteholders’ meeting or have any representation at the meeting.

Tenders may be scaled in relation to the maximum purchase amount.

Rationale

The bank received notice on June 16 that it will be required to comply with the minimum requirement on a consolidated basis at the level of 14.64% of total risk exposure amount by Jan. 1, 2022 and 22.78% of total risk exposure amount from Jan. 1, 2026 onwards.

While the securities were all issued under Portuguese law, banks are strongly encouraged to continue their efforts to introduce recognition clauses to existing contracts or replace instruments without such clauses to achieve further progress towards resolvability.

The bank intends to replace the securities with new notes to comply with the requirements for 2021 and optimize its cost and funding structure.

New notes

The bank intends to offer new euro-denominated senior preferred notes.

Tendering securityholders may be given preference in the allocation of the new notes.

Securityholders who deliver voting-only instructions will not be given any preference.

Details

The offers expired at 11 a.m. ET on July 28.

Settlement for the offers is Aug. 4.

Dealer managers for the offer are Credit Suisse Securities Sociedad de Valores SA (+44 0 20 7883 8763, liability.management@credit-suisse.com), Deutsche Bank AG (+44 0 20 7545 8011), J.P. Morgan AG (+44 0 20 7134 2468, liability_management_EMEA@jpmorgan.com) and Nomura Financial Products Europe GmbH (+44 0 20 7103 2454, liability.management@nomura.com).

The tender agent is Lucid Issuer Services Ltd. (+44 20 7704 0880, novobanco@lucid-is.com, https://deals.lucid-is.com/novobanco).

Novo Banco is a bank based in Lisbon.

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