Housing Securities amends exchange offer for 8 3/8% debenture stock

By Susanna Moon

Chicago, Feb. 18 - Housing Securities 2 announced changes to the exchange offer for £72.55 million of the £180.85 million of 8 3/8% debenture stock 2019 issued by Housing Securities Ltd.

Investors had tendered £44,825,606 of the 8 3/8% debenture stock as of the close of business on Feb. 14, according to a company press release.

Stockholders now will receive the full payment regardless of when they participate in the offer. Originally, those who delivered their exchange instructions after the revocation deadline of noon ET on Feb. 14 would have received a payment reduced by 2%, a previous press release noted.

Also, exchange instructions received beginning Feb. 17 under the offer will be accepted in full until the offer cap is reached. The new issuer reserves the right not to accept any exchange instructions, the company noted.

Third, the principal amount of each holder's stock accepted for exchange will not be scaled down pari passu and on a pro rata basis if the target acceptance size is exceeded, the company said.

As previously announced, 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 exchange offer will end at noon ET on Feb. 26. The offer began on Feb. 4.

The voting instruction fee will be 0.15%.

Along with the offer, the company is asking stockholders to vote on a proposal to amend the terms of the stock.

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 proceeds of the stock issue were used to fund secured loans to 18 registered providers of social housing, the company previously said. 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 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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