Bank of Scotland reports tender results for four covered bonds series

By Jennifer Chiou

New York, Dec. 3 - Bank of Scotland plc announced the final results of its cash tender offer for any and all of four series of its euro or sterling covered bonds.

The offers expired at 11 a.m. ET on Dec. 2.

According to a filing with the London Stock Exchange, holders tendered the following:

• €861,942,000 of its €2 billion of outstanding 3.875% covered bonds due January 2014;

• €911.2 million of its €2 billion of 4.25% covered bonds due September 2014;

• £205.65 million of its £316 million of fixed-to-floating-rate covered bonds due December 2014; and

• €1,145,677,000 of its €2 billion of 4.75% covered bonds due January 2015.

The bank previously said that the tender offer will help Lloyds Banking Group plc manage its overall wholesale funding position and better optimize its stock of outstanding debt securities while maintaining a prudent approach to liquidity.

The purchase price for the 3.875% bonds is €1,004.25 per €1,000 principal amount of notes plus €34.50 of accrued interest.

The purchase price for the 4.25% bonds is €1,033.26 per €1,000 principal amount plus €8.62 of accrued interest.

The purchase price for the fixed-to-floating bonds is £1,000.77 per £1,000 principal amount plus £1.36 of accrued interest.

The purchase price for the 4.75% bonds is €1,053.25 per €1,000 principal amount plus €40.86 of accrued interest.

Pricing was set at 5 a.m. ET on Dec. 3, and settlement is expected on Dec. 6.

The consideration for the 4.25% bonds and 4.75% bonds was calculated by reference to a fixed spread of zero basis points over a benchmark security, which was the 2.5% German government bonds due October 2014 for the 4.25% bonds and the 3.75% German government bonds due January 2015 for the 4.75% bonds.

BNP Paribas (44 20 7595 8668 attn: liability management group or e-mail: liability.management@bnpparibas.com) and Lloyds Bank plc (44 20 7158 3981 attn: liability management group or e-mail: liability.management@lloydsbanking.com) were the dealer managers. Lucid Issuer Services Ltd. (44 20 7704 0880 attn: Sunjeeve Patel/Paul Kamminga or e-mail: bos@lucid-is.com) was the tender agent.

Bank of Scotland is based in Edinburgh. It began the offer on Nov. 25.

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