By Angela McDaniels
New York, Sept. 14 - The Republic of Turkey said it will repurchase $1.056 billion of notes in connection with the modified Dutch auction for its 11 3/8% notes due 2006, 10% notes due 2007, 10½% notes due 2008, 9 7/8% notes due 2008, 12% notes due 2008, 12 3/8% notes due 2009 and 11¾ % notes due 2010.
Noteholders who exchanged their notes will receive a number of new 7% global notes due 2016 equal to the price of the old notes divided by the price of the new notes, rounded down to the nearest $1,000 with the remainder paid in cash.
The exchange offer began on Sept. 6 and ended at 11 a.m. ET on Sept. 13.
Turkey estimated that it will issue $1.17 billion of new notes due in exchange for the old notes and sell an addition $330.28 million of the notes for cash.
The issue price for the new notes is $991.52 per $1,000 principal amount. The price was calculated on 8 a.m. ET on Thursday using a spread over the 10-year dollar interest rate swap benchmark.
The clearing spread for the modified Dutch auction was 183 basis points.
The old note price for each series was set to give a yield to maturity equal to the spread for that series over the interpolated dollar swap rate to the maturity of that series as calculated at 11 a.m. ET on Thursday.
The spread is negative 30 basis points for the 11 3/8% notes, plus 10 basis points for the 10% notes, plus 20 basis points for the 10½% notes, plus 30 basis points for the 9 7/8% notes, plus 45 basis points for the 12% notes due, plus 80 basis points for the 12 3/8% notes and plus 110 basis points for the 11¾% notes.
Noteholders will also receive interest up to but excluding the settlement date.
Roughly $6.35 billion of the old notes remain outstanding.
The new bonds will be issued in minimum denominations of $100,000 and noteholders who hold less than $100,000 principal amount of any series of notes will receive cash in lieu of the new bonds.
Citibank NA was exchange agent for the offering (44 20 7508 3867 or exchange.gats@citigroup.com). Citigroup (800 558-3745 or 212 723-6108 in the United States or 44 20 7986 8969 in London) and Goldman Sachs International (866 627-0391 or 212 250-2955 in the United States and 44 20 7552 5754 or 44 20 7774 5982 in London) wee joint dealer managers.
Table 1: Old bond prices and exchange ratios
Old notes Price Exchange ratio
11 3/8% notes due 2006 $1,010.29 1.018931
10% notes due 2007 $1,042.35 1.051275
9 7/8% notes due 2008 $1,059.62 1.068682
10½% notes due 2008 $1,060.96 1.070034
12% notes due 2008 $1,130.04 1.139705
12 3/8% notes due 2009 $1,157.75 1.167652
11¾% notes due 2010 $1,178.84 1.188922
Table 2: Amount of bonds accepted and outstanding
| Old bond | Bonds | Bond purchased | New notes | Old bonds
|
| exchanged | with cash | to be issued | remaining
|
| 11 | 3/8% notes due 2006 | $186.50 million | $455,000 | $190.02 million | $813.04 million
|
| 10% notes due 2007 | $51.78 million | $604,000 | $54.43 million | $547.61 million
|
| 9 | 7/8% notes due 2008 | $92.97 million | $879,000 | $99.33 million | $1.26 billion
|
| 10½% notes due 2008 | $213.75 million | $93,000 | $228.71 million | $886.15 million |
|
| 12% notes due 2008 | $52.80 million | $182,000 | $60.16 million | $546.88 million |
|
| 12 | 3/8% notes due 2009 | $205.53 million | $200,000 | $237.63 million | $1.046 billion
|
| 11¾% notes due 2010 | $251.86 million | $245,000 | $299.43 million | $1.25 billion
|
| TOTAL | $1.053 billion | $2.66 million | $1.17 billion | $6.35 billion
|
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