ING begins exchange offers, tender offer for subordinated securities

By Angela McDaniels

Tacoma, Wash., Dec. 12 - ING Groep NV began exchange offers in Europe and a tender offer in the United States for seven series of subordinated securities totaling €5.8 billion, according to a company news release.

In the tender offer, the company is offering 80% of par in cash for its $1 billion of perpetual noncumulative tier 1 securities and ING Capital Funding Trust III's $1.5 billion of perpetual noncumulative tier 1 securities.

In the institutional exchange offer, the company is offering

• New five-year pound sterling-denominated senior debt issued by ING Bank NV in exchange for ING's £600 million of perpetual noncumulative tier 1 securities. The offer price is 77%;

• New euro-denominated 3.25-year senior debt issued by ING in exchange for its €500 million of perpetual noncumulative tier 1 securities. The offer price is 74%; and

• New euro-denominated 3.25-year senior debt issued by ING in exchange for ING Verzekeringen NV's €1 billion of noncumulative lower tier 2 securities due May 2027. The offer price is 87%.

The spread will be 230 basis points over the equivalent sterling mid-swaps rate for the new sterling-denominated debt and 265 bps over the equivalent euro mid-swaps rate for the new euro-denominated debt.

In the retail exchange offer, the company is offering new euro-denominated five-year 4% senior debt issued by ING Bank in exchange for ING's €750 million of perpetual noncumulative tier 1 securities and its €1 billion of perpetual noncumulative tier 1 securities. The offer price is 58%.

ING expects to announce the results of the offers on Dec. 21.

According to the company, the prices being offered are higher than the secondary trading levels of the securities when the offer began.

The company said the offers are meant to proactively address uncertainty regarding future call options on these capital securities, which are subject to approval by the European Commission.

UBS Investment Bank is acting as structurer and lead dealer manager. Barclays Capital and ING are acting as joint dealer managers. The exchange agent is Lucid Issuer Services Ltd. (ing@lucid-is.com). The information agent for the tender offer is Global Bondholder Services Corp. (212 430-3774 for banks and brokers, others call 866 294-2200).

ING is a financial services company based in Amsterdam.

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