ING updates take-up rates for retail, institutional exchange offers

By Susanna Moon

Chicago, Dec. 23 - ING Groep NV said it has now completed the offers announced on Dec. 12, with a total of 60% of holders accepting its tender offer in the United States and its institutional exchange offer in Europe.

ING updated the take-up rates for institutional exchange and retail offers in a press release Friday.

As previously reported, the company began an institutional exchange offer and a retail exchange offer in Europe and a tender offer in the United States for seven series of subordinated securities totaling €5.8 billion.

ING said on Dec. 21 that 66% of holders accepted the offers.

The tender offer and the institutional exchange offer ended on Dec. 20.

Tender offer

In the tender offer, the company offered 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.

As previously reported, the take-up rate was 65% for ING's securities and 64% for ING Capital's securities.

Institutional exchange offer

In the institutional exchange offer, the company offered

• 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 was 77% and the take-up rate was 89%;

• 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 was 74% and the take-up rate was 66%; 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 was 87% and the take-up rate was 52%.

The spread was 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.

ING previously said the tender offer and institutional exchange offer will generate an after-tax capital gain of about €515 million, including related hedge results and estimated transaction costs.

Retail exchange offer

In the retail exchange offer, the company offered 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 was 58%.

The take-up rate was 42% for the first series of perpetuals and 43% for the second series of perpetuals.

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

The company said the offers were 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 was the structurer and lead dealer manager. Barclays Capital and ING were the joint dealer managers. The exchange agent was Lucid Issuer Services Ltd. (ing@lucid-is.com). The information agent for the tender offer was 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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