Barclays sets reference yields for tender offer for 6.05%, 5.14% notes

By Angela McDaniels

Tacoma, Wash., April 8 - Barclays Bank plc announced the reference yields for the modified Dutch auction tender offer for its $2.25 billion of 6.05% fixed-rate subordinated notes due 2017 and $1.25 billion of 5.14% lower tier 2 notes due October 2020.

The reference yield is 0.677% for the 6.05% notes and 1.729% for the 5.14% notes, according to a company news release.

As previously reported, Barclays is offering to purchase up to $850 principal amount of the notes. The offer began March 26, and the cap was lowered from $1 billion on April 3.

The purchase price will be determined using the yield of a reference Treasury security plus a clearing spread, which will consist of a base spread less a clearing spread premium. A single clearing spread premium will be calculated for both series of notes.

The acceptable bid spread range is 210 basis points to 250 bps for the 6.05% notes and 195 bps to 235 bps for the 5.14% notes.

The reference Treasury is the 0.75% Treasury due Feb. 28, 2018 for the 6.05% notes and the 2% Treasury due Feb. 15, 2023 for the 5.14% notes. The reference yields were set at 2 p.m. ET on April 8.

The purchase price will include a $50 early participation amount for each $1,000 principal amount of notes tendered by the early participation deadline.

The company will also pay accrued interest up to but excluding the payment date.

The early participation deadline is 5 p.m. ET on April 8, and the tender offer will end at 5 p.m. ET on April 25. The settlement date is expected to be April 9 for notes tendered by the former deadline and April 30 for notes tendered by the latter deadline.

If the principal amount of notes tendered by the early participation deadline is more than $850 million, then the company will first accept all notes tendered prior to the early participation deadline with a bid spread that results in a bid premium less than the clearing spread premium and then all notes with a bid spread that results in a bid premium equal to the clearing spread premium on a prorated basis using a single proration factor across both series of notes.

If the tender offer is not oversubscribed at the early participation deadline but is oversubscribed at the expiration date, then the company will accept for payment all notes tendered after the early participation deadline but prior to the expiration deadline on a prorated basis using a single proration factor across both series of notes.

Holders who tender their 5.14% notes by the early participation deadline and whose notes are accepted will not receive the regularly scheduled interest payment scheduled for April 14.

The tender offer is subject to the satisfaction of some financing and other conditions.

The dealer manager is Barclays (212 528-7581, 800 438-3242 or liability.management@barclays.com). The tender agent is Global Bondholder Services Corp. (212 430-3774, 866 470-4200 or Info@gbsc-usa.com).

The unit of Barclays plc is based in London.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.