Virgin Money announces consent bid for notes to swap CYBG as issuer

By Sarah Lizee

Olympia, Wash., July 24 – Virgin Money Holdings (UK) plc is holding consent solicitations relating to its £230 million fixed-rate resettable additional tier 1 securities and £350 million 3 3/8% fixed-rate reset callable senior notes due April 24, 2026, according to a notice.

The consent solicitations are in connection with CYBG plc’s acquisition of Virgin Money. CYBG is now the ultimate holding company of Virgin Money, and the group and plans to change its name to Virgin Money UK plc by the end of this year.

Under the extraordinary resolutions, CYBG plc will replace Virgin Money as issuer for both series of notes.

“In order to protect investor interests, the issuer is proposing to transfer its obligations as principal debtor under the notes to CYBG,” the release said.

“In contrast to the expected position for the issuer, CYBG is expected to maintain adequate reserves to facilitate interest payments on the notes, should the board of directors of CYBG choose to exercise its discretion to make such payments in the case of the AT1 notes.”

The transfer of notes will consolidate all of the group's capital and holding company senior debt issuance into one entity, CYBG.

The meetings will be held on Aug. 15.

According to the release, the proposals have been considered and accepted by a special committee that holds about 18.58% of the current principal amount outstanding of the AT1 notes and 41.95% of the current principal amount outstanding of the 3 3/8% notes. The committee informed the issuer that they intend to vote in favor of the proposals.

Under each consent solicitation, eligible noteholders who submit valid electronic voting instructions by 5 a.m. ET on Aug. 13 will receive 5% of the principal amount of notes.

Ineligible noteholders may also be entitled to receive the early participation fee, subject to some conditions. Those instructions are due by 11 a.m. ET on Aug. 7.

The quorums required to pass the extraordinary resolution is not less than 66 2/3% of the aggregate amount of the outstanding AT1 notes, and more than half of the aggregate principal amount of the outstanding 3 3/8% notes.

At each meeting, passing of an extraordinary resolution requires a majority in favor consisting of not less than 75%.

The solicitation agents are Barclays Bank plc (+44 20 3134 8515, eu.lm@barclays.com) and Deutsche Bank AG, London Branch (+44 20 7545 8011). The tabulation agent is Lucid Issuer Services Ltd. (+44 20 7704 0880, virginmoney@lucid-is.com)

Virgin Money plc is a bank and financial services company based in Newcastle, U.K.

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