RBS accepts £4.28 billion of notes in exchange offer, tender offers

By Angela McDaniels

Tacoma, Wash., April 29 - Royal Bank of Scotland Group plc released further details about the exchange offer for some of the group's upper tier 2 debt securities and the tender offers for some of the group's preference shares, trust preferred securities and tier 1 notes.

The amount of tendered securities received was announced on April 28. RBS Group has since determined the exchange prices for the exchange offer and decided how many notes to accept.

The company accepted a total of £4.28 billion of securities in the offers.

According to a company news release, RBS will issue the following in the exchange offer:

• C$732.395 principal amount of new 5.875% senior unsecured notes in exchange for each C$1,000 principal amount of Royal Bank of Scotland plc's 5.37% fixed-/floating-rate undated subordinated callable step-up notes. Holders tendered C$226.26 million of these notes;

• $601.974 principal amount of new 5% senior unsecured notes in exchange for each $1,000 principal amount of National Westminster Bank plc's primary capital floating-rate notes, series A, primary capital floating-rate notes, series B, and primary capital floating-rate notes, series C, and RBS Group's undated floating-rate primary capital notes.

Holders tendered $138.78 million, $63.7 million, $26.34 million and $56.61 million of these notes, respectively;

• £1,008.308 principal amount of new 6.875% senior unsecured notes in exchange for each £1,000 principal amount of National Westminster's 11.5% undated subordinated notes. Holders tendered £20,534,000 of these notes;

• £1,008.81 principal amount of new 6% senior unsecured notes in exchange for each £1,000 principal amount of RBS' 9.5% undated subordinated bonds. Holders tendered £41,852,000 of these bonds;

• €801.435 principal amount of new 3.625% senior unsecured notes in exchange for each €1,000 principal amount of National Westminster's floating-rate undated subordinated notes and fixed-/floating-rate undated subordinated notes. Holders tendered €89.44 million and €222,383,000 of these notes, respectively;

• £810.713 principal amount of new 6% senior unsecured notes in exchange for each £1,000 principal amount of National Westminster's 7.625% undated subordinated step-up notes. Holders tendered £74,455,000 of these notes;

• £857.062 principal amount of new 6.875% senior unsecured notes in exchange for each £1,000 principal amount of National Westminster's 7.125% undated subordinated step-up notes. Holders tendered £72,257,000 of these notes;

• £810.713 principal amount of new 6% senior unsecured notes in exchange for each £1,000 principal amount of RBS' 7.375% fixed-rate undated subordinated notes. Holders tendered £65.33 million of these notes;

• £800.705 principal amount of new 6% senior unsecured notes in exchange for each £1,000 principal amount of RBS' 6.25% fixed-rate undated subordinated notes. Holders tendered £66.11 million of these notes;

• £786.481 principal amount of new 6.875% senior unsecured notes in exchange for each £1,000 principal amount of RBS' 5.625% fixed-rate undated subordinated notes. Holders tendered £181,714,000 of these notes;

• £826.813 principal amount of new 6.875% senior unsecured notes in exchange for each £1,000 principal amount of RBS' 6.2% fixed-rate undated subordinated notes. Holders tendered £152,660,000 of these notes;

• £786.481 principal amount of new 6.875% senior unsecured notes in exchange for each £1,000 principal amount of RBS' 5.625% fixed-rate undated subordinated notes. Holders tendered £267.58 million of these notes;

• £800.705 principal amount of new 6% senior unsecured notes in exchange for each £1,000 principal amount of RBS' 5.125% fixed-rate undated subordinated notes and 6% fixed-rate undated subordinated notes. Holders tendered £123,539,000 and £81,615,000 of these notes, respectively;

• €801.435 principal amount of new 3.625% senior unsecured notes in exchange for each €1,000 principal amount of RBS' 5.125% fixed-/floating-rate undated subordinated notes. Holders tendered €21.48 million of these notes;

• €681.219 principal amount of new 3.625% senior unsecured notes in exchange for each €1,000 principal amount of RBS' floating-rate undated subordinated notes. Holders tendered €73,214,000 of these notes;

• £786.481 principal amount of new 6.875% senior unsecured notes in exchange for each £1,000 principal amount of RBS' 5.5% fixed-rate undated subordinated notes. Holders tendered £225,087,000 of these notes; and

• £780.687 principal amount of new 6% senior unsecured notes in exchange for each £1,000 principal amount of RBS' 5% fixed-rate/floating-rate undated subordinated callable step-up notes. Holders tendered £189.11 million of these notes.

RBS Group accepted a total of £2,256,544,661 principal amount, or 54.58%, of the outstanding notes eligible for exchange.

RBS will issue a total of $171,801,000 of the 5% notes, £739,033,000 of the 6.875% notes, £519,943,000 of the 6% notes and €316,927,000 of the 3.625% notes.

Holders will also receive accrued interest.

Settlement of the exchange offer is expected to occur on May 17.

Tender offers

RBS Group also announced that it accepted a total of £2,025,680,747 principal amount of notes in the tender offer.

The company accepted the following:

• €828.55 million of RBS Group's €1.3 billion 7.0916% non-cumulative preference shares, series 3. The purchase price is 65% of par;

• £695,558,000 of Argon Capital plc's £750 million 8.162% perpetual non-cumulative securities, series 100. The purchase price is 68% of par;

• C$279,311,000 of RBS Group's C$600 million 6.666% fixed-/floating-rate undated callable step-up tier 1 notes. The purchase price is 72% of par; and

• €465,011,000 of RBS Group's €1.25 billion 5.25% non-cumulative preferred securities, series 2. The purchase price is 57% of par.

Holders will also receive accrued distributions.

RBS Group planned to purchase no more than £2 billion of securities in the tender offers. It said that in the case of the last series of securities at which some but not all tendered securities could be accepted before the offer limit was exceeded, it would accept all the tenders of that last series of securities if doing so would not cause the £2 billion cap to be exceeded by more than £100 million.

Holders also tendered the following securities, which were not accepted for purchase:

• €480,547,000 of RBS Group's €1.25 billion 5.5% non-cumulative preferreds, series 1. The purchase price was to be 57% of par;

• €126,758,000 of RBS Capital Trust C's €500 million 4.243% fixed-/floating-rate non-cumulative trust preferred securities. The purchase price was to be 63% of par;

• £76,035,000 of RBS Capital Trust D's £400 million of 5.6457% fixed-/floating-rate non-cumulative trust preferreds. The purchase price was to be 65% of par;

• $67,254,000 of RBS Capital Trust B's $750 million 6.8% non-cumulative trust preferreds. The purchase price was to be 61% of par;

• €164,086,000 of RBS Capital Trust A's €1.25 billion 6.467% non-cumulative trust preferreds. The purchase price was to be 65% of par.

• £44,778 of RBS Group's £400,000 5.5% cumulative preference shares. The purchase price was to be 70% of par;

• £30,181,278 of National Westminster's £140 million 9% non-cumulative preference shares, series A. The purchase price was to be par;

• £26,154 of RBS Group's £500,000 11% cumulative preference shares. The purchase price was to be par; and

• £112,105,000 of RBS Group's £200 million 7.387% non-cumulative convertible preference shares, series 1. The purchase price was to be par.

The securities are listed in order of acceptance priority level.

The exchange offer and the tender offers were subject to the approval of RBS Group shareholders at a general meeting scheduled for April 28. The necessary approval was received.

Settlement of the tender offers is expected to occur on May 4.

The global arranger and lead dealer manager is RBS (+44 20 7085 5862/6513/6754/8056/3781), the lead dealer managers are Merrill Lynch International and Morgan Stanley & Co. International plc (+44 20 7995 3715 or +44 20 7677 5040), and the dealer manager is HSBC Bank plc (+44 20 7991 5874 or +44 20 7779 2468/7777 1333).

Lucid Issuer Services Ltd. (+44 20 7704 0880) is the exchange and tender agent, and Equity Transfer & Trust Co. (416 361-0152) is the Canadian exchange agent.

RBS is the Edinburgh-based holding company for a banking and financial services group.

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