Bradford & Bingley wraps tender for 2¾%, 4 7/8% bonds; call issued

By Susanna Moon

Chicago, March 1 – Bradford & Bingley plc said holders had tendered CHF 198.81 million of its CHF 250 million 2¾% series 7 covered bonds due October 2018 and €973.8 million of its €1.25 billion 4 7/8% series 14 covered bonds due June 2017.

Bradford will purchase all of the tendered notes, with settlement on March 3, according to a company notice.

The tender offers ended at 5 a.m. ET on Feb. 26. The offers began on Jan. 28.

For the 2¾% notes, the early tender price is 110.193 and the base tender price is 109.193. For the 4 7/8% notes, the early tender price is 107.132 and the base tender price is 106.632.

The company also will pay accrued interest of CHF 52.33 per CHF 5,000 of 2¾% bonds and €1,658.30 per €50,000 of 4 7/8% notes.

At the bondholder meeting held Tuesday, the proposals presented to bondholders passed with votes from 96.13% of 2¾% notes represented and 99.52% of 4 7/8% notes represented.

The company said it will redeem the remaining covered bonds at 109.193 for 2¾% notes and at 106.632 for 4 7/8% notes plus accrued interest on March 3.

The company said on Feb. 11 that it had received the needed consents to amend the two series of notes.

Bondholders representing more than two-thirds of the series 7 covered bonds and the series 14 covered bonds submitted votes to amend each series of notes as of 5 p.m. ET on Feb. 10, the early tender date.

As a result, both meetings set for March 1 in London were expected to be quorate, the company previously noted.

Bradford & Bingley was asking holders to approve adding a new condition to the note terms that allow the company to redeem all but not only some of the remaining bonds at an amount equal to the purchase price less the early premium plus accrued interest, as previously announced.

The corresponding covered bond swap agreement for the bonds also will be amended to provide for the early termination of the transactions entered into in connection with the bonds.

Pricing, other details

As reported, pricing was set at 8 a.m. ET on Feb. 23 using a benchmark security plus a purchase spread of zero basis points and using a settlement date of March 3.

The purchase yield was negative 0.496% for the 4 7/8% notes and negative 1.065% for the 2¾% notes.

Holders who tendered their bonds by 5 p.m. ET on Feb. 10, the early tender date, will receive a premium of 1% for the 2¾% bonds and of 0.50% for the 4 7/8% bonds.

The reference security was the Swiss 3% notes due May 2019 for the 2¾% bonds and the DBR 4¼% bundesobligation due July 2017 for the 4 7/8% bonds.

The purchase price was equal to the value of all remaining payments of principal and interest on the bonds up to and including the maturity date, discounted to the settlement date at a discount rate equal to the purchase yield minus accrued interest.

The reason for making the offers was “to facilitate the accelerated release of mortgage assets held within the company’s €15 billion covered bond program to allow future portfolio sales and, potentially, the early wind-up of the program, avoiding ongoing administration costs and obligations,” the previous release noted.

The dealer managers are BNP Paribas (+44 20 7595 8668 or liability.management@bnpparibas.com) and Citigroup Global Markets Ltd. (+44 20 7986 8969 or liabilitymanagement.europe@citi.com).

The tender agent is Citibank, NA, London Branch (+44 20 7508 3867 or exchange.gats@citi.com).

Bradford & Bingley is a Bingley, England-based bank.

© 2015 Prospect News.
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