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Housing Securities offers to exchange £72.55 million of 8 3/8% debenture stock for new bonds
By Susanna Moon
Chicago, Feb. 4 - Housing Securities 2 plc began an exchange offer for £72.55 million of the £180.85 million 8 3/8% debenture stock 2019 issued by Housing Securities Ltd.
Along with the offer, the company is asking stockholders to vote on a proposal to amend the terms of the stock, according to a company press release.
Pricing for the exchange offer will be set at 10 a.m. ET on March 3 to reflect the yield to maturity using the exchange yield, which will be the sum of the Stock Benchmark Gilt rate and the exchange spread of 100 basis points.
The company is offering to issue new sterling-denominated fixed-rate secured bonds in exchange for £72.55 million principal amount of the existing stock.
The proceeds of the stock issue were used to fund secured loans to 18 registered providers of social housing, the company noted. Seven of the borrowers are asking to extend the maturity of their loans and lower the interest cost and, in some cases, to borrow additional amounts.
The offer will end at noon ET on Feb. 26.
Stockholders who deliver their exchange instructions after the revocation deadline of noon ET on Feb. 14 will receive a payment that is reduced by 2%, the release noted.
The voting instruction fee will be 0.15%.
The new issue yield will be set using the bond benchmark gilt rate and a new spread of 120 bps.
The new issue price shall be as close as possible to 100% of the nominal amount of the new bonds.
The exchange offer is conditioned on a minimum amount of £38.5 million of net cash proceeds from the issue of additional new bonds and on a minimum of £72.55 million principal amount of the stock offered for exchange.
A meeting will be held at 5 a.m. ET on Feb. 27.
The dealer manager is Deutsche Bank AG, London Branch (+44 20 7545 8011, attn: liability management, email: liability.management@db.com). The receiving agent is Computershare Investor Services plc (corporate action projects, +44 0 870 707 1060, investorcentre.com/contactus).
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