Capital One gives final results for exchange offer for 6.75% notes

By Toni Weeks

San Luis Obispo, Calif., June 17 - Capital One Financial Corp. said it received tenders for $762,906,000 principal amount of its $1,341,045,000 of outstanding 6.75% senior notes due 2017 in its exchange offer for any and all of the notes that expired at 11:59 p.m. ET on June 14. The offer began May 22.

The amount is slightly up from the $758,866,000 principal amount of notes that were tendered by 5 p.m. ET on May 31, the early participation date.

Capital One has accepted or will accept all of the old notes that were tendered for exchange, according to a press release.

As previously reported, the company offered new senior notes due 2023 and cash in exchange for the 6.75% notes.

The interest rate on the new notes is 3.5%. The new issue yield on the new notes is 3.544%, and the new notes value is $1,095.94. These amounts were determined by reference to the bid-side yield of the 1.75% Treasury note due May 15, 2023 at 11 a.m. ET on June 3, which was 2.094%.

The total exchange price is $1,210.66 for each $1,000 principal amount of notes tendered by the early participation date. It will be paid in the following manner: $1,100.00 principal amount of new notes and $114.72 of cash, which is equal to the total exchange price minus the new notes value.

The exchange price is $1,190.66 for each $1,000 principal amount of notes tendered after the early participation date but prior to the offer expiration. It will be paid in the following manner: $1,100.00 principal amount of new notes and $94.72 of cash.

The prices were determined by reference to the yield of the 0.625% Treasury security due April 30, 2018 plus a spread of 65 basis points.

The company will also pay accrued interest up to but excluding the settlement date, which was June 6 for notes tendered by the early participation date and is expected to be June 18 for notes tendered after that time. In the case of notes exchanged on the final settlement date, this amount will be reduced to reflect embedded interest on the new notes.

The exchange offer is conditioned on a minimum of $500 million principal amount of new notes being issued in exchange for old notes. The company said previously that the amount of notes tendered by the early participation date satisfied this condition.

D.F. King & Co., Inc. (800 290-6427 or, for banks and brokerage firms, 212 269-5550) was the information agent.

Capital One is a financial services company based in McLean, Va.

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