Bank of Scotland seeks to buy back 9.375% subordinated bonds due 2021

By Angela McDaniels

Tacoma, Wash., March 26 – Bank of Scotland plc began a tender offer for its £500 million 9.375% subordinated bonds due May 15, 2021, according to a company filing with the London Stock Exchange.

The offer will end at 11 a.m. ET on April 3.

The purchase price will equal the value of all remaining payments of principal and interest due to be made up to and including the maturity date, discounted to the settlement date at a discount rate equal to the repurchase yield minus accrued interest.

The repurchase yield will be the annualized sum of the yield to maturity of the 1.5% U.K. government gilts due Jan. 22, 2021 plus 105 basis points.

The purchase price will be determined at or around 6 a.m. ET on April 4.

Holders will also receive accrued interest up to but excluding the settlement date, which is expected to be April 10.

Notes purchased in the offer will be canceled.

The dealer manager is Lloyds Bank Corporate Markets plc (+44 20 7158 1726, +44 20 7158 1719 or liability.management@lloydsbanking.com). The tender agent is Lucid Issuer Services Ltd. (+44 20 7704 0880 or bos@lucid-is.com).

Bank of Scotland is a banking and financial services company based in Edinburgh and a subsidiary of London-based Lloyds Banking Group plc.

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