Egg Banking tenders for 6.875% subordinated notes, 7.5% callables

By Jennifer Chiou

New York, Feb. 15 - Egg Banking plc announced the start of a modified Dutch auction offer for its £200 million of 6.875% subordinated notes due 2021 and its £250 million of 7.5% perpetual upper tier II callable notes.

The notes have a subordinated guarantee from Citigroup Inc.

The offer for up to £275 million of the securities is part of the company's balance sheet management following completed divestitures during 2011. The aim of the offer is to reduce repayments going forward.

Egg said that it will determine a separate purchase price for each series of notes. It will also pay accrued interest to the settlement date.

The company added that it will accept non-competitive offers before others.

The offer will end at 11 a.m. ET on Feb. 23, and pricing will be set the following day.

Settlement is anticipated for Feb. 29.

The dealer manager is Citigroup Global Markets Ltd. (+44 20 7986 8969; attention: liability management group at liabilitymanagement.europe@citi.com). The tender agent is Citibank NA (+44 20 7508 3867; attn: exchange team at exchange.gats@citi.com).

The British internet bank is based in Derby and London, England.

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