Credit Suisse begins tender offer for, seeks to amend 2039 bonds

By Marisa Wong

Los Angeles, Oct. 7 – Credit Suisse AG, Guernsey Branch announced separate invitations to holders of its outstanding €600 million covered bonds due July 2039 (ISIN: XS1088825143) to (i) tender any and all of their bonds for purchase for cash and (ii) approve, by extraordinary resolution, some modifications to the terms and conditions of the bonds, according to a notice on Friday.

The proposed amendments would provide for an early redemption of the bonds in full at an early redemption amount equal to the greater of par and the purchase price under the tender offer.

The purchase price under the tender offer will be calculated using the interpolated mid-swap rate and a purchase spread of 0 basis points. The purchase price will be determined at or around 8 a.m. ET on Nov. 8.

The issuer will also pay accrued interest.

The tender offer expires at noon ET on Nov. 3.

Any bondholder who does not wish to tender bonds may deliver a voting-only instruction either in favor or against the proposal by the expiration of the offer.

Bondholders will vote on an extraordinary resolution to amend the bonds at a meeting scheduled for 5 a.m. ET on Nov. 8.

The quorum required for the meeting to consider the extraordinary resolution is one or more persons holding bonds representing not less than three-quarters of the amount outstanding. If the meeting is adjourned, the quorum at the adjourned meeting will be one or more persons holding bonds representing not less than one-quarter of the amount outstanding.

To pass, the extraordinary resolution requires a majority consisting of at least three-quarters of the votes cast.

If the extraordinary resolution is passed at the meeting, the issuer intends to terminate the tender offer and instead redeem all of the outstanding bonds on Nov. 10.

If the proposed amendments are not implemented and the issuer decides to accept tenders of bonds under the offer, the issuer will accept all of the tendered bonds for purchase with no scaling. Settlement is expected to be on Nov. 10.

The issuer said its wholly owned subsidiary, Credit Suisse (Switzerland) Ltd., established a new covered bond program to serve as its secured funding program. In order to increase operational efficiency, the issuer is carrying out the tender offer and proposal to reduce the number of covered bond programs currently maintained by the issuer and its subsidiary.

Credit Suisse International (+44 20 7883 8763; attn.: liability management group; liability.management@credit-suisse.com) is the dealer manager.

Kroll Issuer Services Ltd. (+44 20 7704 0880; attn.: Paul Kamminga; cs@is.kroll.com) is the tender agent.

Credit Suisse is a financial services company based in Zurich.

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