Turkiye Is Bankasi asks to convert 7.85% notes back to tier 2 capital

By Susanna Moon

Chicago, May 12 – Turkiye Is Bankasi AS said it began a consent solicitation for its $386 million of outstanding 7.85% subordinated notes due 2023.

The noteholders meeting has been set for June 6 in London.

Turkiye Is Bankasi is proposing to amend the 7.85% notes so that they are once again eligible for inclusion as tier 2 capital, according to a company announcement.

The notes stopped qualifying as tier 2 capital because of equity regulation amendments on March 31, the bank explained in the release.

Under the note terms, the exclusion constitutes a capital disqualification event and the notes become callable at par plus accrued interest.

Before exercising the call, the issuer said it is giving noteholders the option to approve the proposed amendments.

The issuer is offering an early consent fee of 0.5% to holders who submit instructions in favor of the measure by the early instruction deadline of 11 a.m. ET on May 25.

Holders may continue to submit their consents until the end of the solicitation at 11 a.m. ET on June 1.

If the measure fails, the issuer said it plans to call the notes after the meeting ends.

Specifically, the issuer is seeking to modify the note terms by

• Including a provision for the permanent write-down of the notes in whole or in part upon the occurrence of a non-viability event and related consequential changes; and

• Making other changes to align the conditions more closely with those of other issues of tier 2 notes by Turkish banks following the implementation of Basel III in Turkey.

The consent solicitation is only being made to holders who are non-U.S. persons under Regulation S. Ineligible noteholders include those who are Rule 144A holders or Regulation S holders who are U.S. persons.

BNP Paribas (+44 207 595 8668 or liability.management@bnpparibas.com) and Citigroup Global Markets Ltd. (+44 20 7986 8969 or liabilitymanagement.europe@citi.com) are the solicitation agents. Citibank, NA, London Branch (+44 20 7508 3867 or Exchange.gats@citi.com) is the tabulation agent.

Turkiye Is Bankasi is a lender based in Istanbul.

© 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.