RBS begins two separate sets of tender offers for several note series

By Susanna Moon

Chicago, Jan. 3 - Royal Bank of Scotland plc began separate tender offers for several series of outstanding notes.

In the first set of offers, the company is tendering for its $492,313,000 floating-rate notes due 2013, $1,073,055,000 3.4% senior notes due 2013, $252,822,000 3.25% senior notes due 2014, $1,532,382,000 4.875% senior notes due 2014, $1,198,792,000 4.875% senior notes due 2015, $171,801,000 5% senior notes due 2015 and $1,158,364,0003.95% senior notes due 2015.

The total purchase price for each $1,000 principal amount of the outstanding notes will be fixed or set using a reference U.S. Treasury security plus a spread as follows:

• $1,014.50 for the floaters due 2013;

• 0.125% Treasury notes due December 2014 plus 10 basis points for the 3.4% notes;

• 0.125% Treasury notes due December 2014 plus 40 bps for the 3.25% notes;

• 0.125% Treasury notes due December 2014 plus 60 bps for the 4.875% notes due 2014;

• 0.250% Treasury notes due December 2015 plus 65 bps for the 4.875% notes due 2015;

• 0.250% Treasury notes due December 2015 plus 65 basis points bps for the 5% notes; and

• 0.250% Treasury notes due December 2015 plus 80 basis points bps for the 3.95% notes.

Pricing for the six series of fixed-rate notes will be based on a yield to maturity using the bid-side price of the reference Treasury note at 9:30 a.m. ET on Jan. 10 plus the fixed spread. The purchase price will be the present value per $1,000 principal amount of all remaining payments of principal and interest on the notes to maturity, discounted to the settlement date using the repurchase yield minus accrued interest.

The company also will pay accrued interest.

The offers will end at 12:30 p.m. ET on Jan. 10, with settlement slated for Jan. 14.

Global Bondholder Services Corp. is the tender agent. RBS Securities Inc. (attn.: liability management, 877 297-9832 or collect 203 897-4825) is the global arranger and lead dealer manager. J.P. Morgan Securities LLC (866 834-4666, collect 212 834-2494 or email: yankee.team@jpmorgan.com) and RBS Securities Inc. are the joint dealer managers.

Second set of offers

In the second set of offers, RBS is tendering for its €1 billion 4.75% notes due Jan. 4, 2014, S$110 million floating-rate notes due March 31, 2014, S$390 million 2.85% notes due March 31, 2014, €1,051,474,000 outstanding €1.25 billion 4.875% notes due July 15, 2015, €1 billion 4.25% notes due May 11, 2016, €740.99 million outstanding €1 billion 4.75% notes due May 18, 2016, €1,607,070,000 outstanding €2 billion 4.875% notes due Jan. 20, 2017, £728,896,000 outstanding £882,777,000 6.375% notes due April 29, 2014, £437,339,000 outstanding £519,943,000 6% notes due May 17, 2017 and CHF 350 million 2.75% notes due Oct. 8, 2015.

The total purchase price will be fixed for the following three series of notes:

• €1,041.00 per €1,000 principal amount of the 4.75% notes due 2014;

• S$253,000 per S$250,000 principal amount of the floaters due March 31, 2014; and

• S$254,500 per S$250,000 principal amount of the 2.85% notes.

For the remaining notes, pricing will be set using the reference rate plus a fixed spread as follows:

• Interpolated mid-swap rate plus 50 bps for the 4.875% notes due 2015;

• Interpolated mid-swap rate plus 35 bps for the 4.25% notes;

• Interpolated mid-swap rate plus 60 bps for the 4.75% notes due 2016;

• Interpolated mid-swap rate plus 80 bps for the 4.875% notes due 2017;

• 5% U.K. Treasury Gilt due 2014 plus 85 bps for the 6.375% notes;

• 1.75% U.K. Treasury Gilt due 2017 plus 145 bps for the 6% notes; and

• Interpolated mid-swap rate plus 50 bps for the 2.75% notes.

The offers will end at 11 a.m. ET on Jan 10. Pricing will be set at 4 a.m. ET on Jan. 11.

Lucid Issuer Services Ltd. is the tender agent (+44 20 7704 0880, attn.: David Shilson/Sunjeeve Patel, email: rbs@lucid-is.com). Royal Bank of Scotland plc (+44 20 7085 8056, attn.: liability management group, email: liabilitymanagement@rbs.com) is the global arranger and lead dealer manager. J.P. Morgan Securities plc (+44 20 7134 3414, attn.: liability management group, email: emea_lm@jpmorgan.com) and RBS are the joint dealer managers.

The company is tendering for U.S. dollar, euro, pounds sterling, Singapore dollar and Swiss franc senior notes "to optimize its overall liability composition and mix and future interest expense with reference to the overall reduction in its balance sheet, while maintaining a prudent approach to liquidity," according to a press release.

The financial services company is based in Edinburgh.

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