Hong Kong’s FWD gets consents to amend five of six note series so far

By Marisa Wong

Los Angeles, July 1 – FWD Ltd. announced early results of its consent solicitation for three series of notes, and FWD Group Ltd. also issued early results of its separate consent solicitation for three other series of notes.

As of the electronic consent deadline under each solicitation at 11 a.m. ET on June 30, FWD Ltd. received the necessary consents to amend two series of its notes and FWD Group obtained the required consents to amend all three series of its notes.

As a result, no meetings will be held for the five series for which sufficient consents have already been received. Only a meeting is scheduled for FWD Ltd.’s 5% notes due 2024.

The main purpose of each consent solicitation is to substitute the issuer with PCGI Intermediate Holdings Ltd.

As of the start of the consent solicitations on June 17, the assets of PCGI Intermediate primarily consist of its holding of shares in the FWD entities.

PCGI Intermediate had submitted a draft registration statement with the Securities and Exchange Commission for an initial public offering of American Depositary Shares. In connection with that, FWD intends on restructuring its outstanding debt so that all of that debt is either transferred to PCGI Intermediate or otherwise refinanced.

FWD Ltd. solicitation

FWD Ltd. is asking holders to approve some amendments to its $325 million 5% notes due 2024 (ISIN: XS1106513762), its $250 million 6¼% subordinated perpetual capital securities (ISIN: XS1520804250) and its $200 million 5½% subordinated perpetual capital securities (ISIN: XS1748857379).

The company is proposing amendments to the following:

• Relevant conditions relating to the substitution of the issuer with PCGI Intermediate;

• The definition of “change of control;

• A condition of the 5% notes due 2024 to allow for resolutions to be passed by way of electronic consent through the clearing systems by or on behalf of holders of at least 75% in aggregate principal amount of the 2024 notes; and

• A condition of the 5% notes due 2024 to amend the cross-acceleration threshold to $20 million from $10 million.

Approval of the proposed changes requires consents from a majority of at least 75% of the outstanding amount of each series.

For the 5% notes due 2024, holders will vote on the proposed changes at a meeting. For the two perpetual series, holders already voted on the extraordinary resolution by way of circulation resolution by electronic consent.

The meeting for the 5% notes due 2024 will be held at 12:15 a.m. ET on July 9. No meetings will be held for the 6¼% perpetuals or the 5½% perpetuals.

The meeting requires a quorum of at least two voters representing at least three-quarters of the aggregate principal amount of the relevant series. If the meeting is adjourned, the quorum will drop down to one-quarter of the aggregate principal amount.

The company is offering an early consent fee of 0.45% for the 5% notes due 2024, 0.15% for the 6¼% perpetuals and 0.45% for the 5½% perpetuals. Holders who delivered consents by the early consent deadline at 11 a.m. ET on June 30 are eligible to receive the early consent fee.

The company will pay consent fees of 0.1%, 0.05% and 0.1% for the 5% notes due 2024, 6¼% perpetuals and 5½% perpetuals, respectively, for consents delivered after the early deadline.

FWD Group solicitation

FWD Group is seeking consents to amend its $750 million zero-coupon subordinated perpetual capital securities (ISIN: XS1628340538), $900 million 5¾% subordinated notes due 2024 (ISIN: XS2022434364) and $600 million 6 3/8% perpetual capital securities.

The company is proposing to make changes to the following:

• Relevant conditions relating to the substitution of the issuer with PCGI Intermediate.; and

• A condition of the 5¾% notes due 2024 to amend the cross-acceleration threshold to $20 million from $10 million.

Approval of the proposed changes requires consents from a majority of at least 75% of the outstanding amount of each series.

Holders already voted on the extraordinary resolution by way of circulation resolution by electronic consent.

Meetings were scheduled to begin at 1 a.m. ET on July 9 but will no longer be held.

Each meeting would have required a quorum of at least two voters representing at least three-quarters of the aggregate principal amount of the relevant series.

The company is offering an early consent fee of 0.3% to holders who delivered consents by the early consent deadline at 11 a.m. ET on June 30.

The company will pay a consent fee of 0.1% for consents delivered after the early deadline.

Details

Both consent solicitations expire at 11 a.m. ET on July 6.

Hongkong and Shanghai Banking Corp. Ltd. (+852 3941 0223, +44 20 7992 6237, liability.management@hsbcib.com) is the solicitation agent for both consent solicitations.

Morrow Sodali Ltd. (+44 20 8089 3287, +852 2319 4130, fwd@investor.morrowsodali.com, https://bonds.morrowsodali.com/fwd) is the information and tabulation agent.

Hong Kong-based FWD is the insurance business of investment group Pacific Century Group.

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