Deutsche Bank accepts all early tendered notes, sets clearing spread; offer prices

By Susanna Moon

Chicago, Feb. 29 – Deutsche Bank AG said it set the clearing spread in the cash tender offers for up to $2 billion principal amount of several series of its outstanding dollar-denominated notes, with pricing under a modified Dutch auction.

Deutsche Bank accepted for purchase all of the notes tendered as of 5 p.m. ET on Feb. 26, the early tender date, according to a company press release. The breakdown for the early tender results is given below.

Deutsche Bank is offering to buy back the notes until 11:59 p.m. ET on March 11. The tender offer began on Feb. 12.

In the first tranche offer, the bank is offering to purchase up to $500 million principal amount of two series of outstanding notes. As of the early date, investors had tendered

• $125.4 million of the $1.4 billion of 1.35% notes due 2017 with the clearing spread set at 210 basis points; the bid spread range minimum was 210 bps and the base spread was 235 bps; and

• $188.1 million of the $2,131,200,000 of 6% notes due 2017 with the clearing spread set at 230 bps; the bid spread range minimum was 230 bps and the base spread was 255 bps.

In the second tranche offer, the bank is offering to purchase up to $750 million of notes, with early results as follows:

• $82.1 million of the $2 billion of 1.875% notes due 2018 with the clearing spread set at 250 bps, using a bid spread range minimum of 250 bps and base spread of 275 bps; and

• $103 million of the $2.25 billion of 2.5% notes due 2019 with the clearing spread set at 250 bps, based on a bid spread range minimum of 250 bps and the base spread of 275 bps.

In the third tranche offer, the bank is offering to purchase up to $600 million of notes, with early results as follows:

• $140.7 million of the $970 million of 2.95% notes due 2020 with the clearing spread set at 235 bps, using a bid spread range minimum of 235 bps and the base spread of 260 bps;

• $71.6 million of the $1 billion of 3.125% notes due 2021 with the clearing spread set at 260 bps, based on a bid spread range minimum of 260 bps and the base spread of 285 bps; and

• $25.6 million of the $1.6 billion of 3.7% notes due 2024 with the clearing spread set at 275 bps, using a bid spread range minimum of 275 bps and the base spread of 300 bps.

In the fourth tranche offer, the bank is offering to purchase up to $150 million of its $750 outstanding 4.1% notes due 2026.

Holders had tendered $3.3 million of the notes as of the early deadline, and the clearing spread was set at 290 bps, using a bid spread range minimum of 290 bps and the base spread of 315 bps.

Pricing, more details

Pricing for the dollar offers was set at 11 a.m. ET on Feb. 29 using a reference security, according to a separate company announcement.

The reference security will be 0.75% U.S. Treasury notes due Jan. 31, 2018 for the 1.35% notes due 2017, 6% notes due 2017 and 1.875% notes due 2018; 1.125% U.S. Treasury notes due Jan. 15, 2019 for the 2.5% notes due 2019; 1.375% U.S. Treasury notes due Jan. 31, 2021 for the 2.95% notes due 2020 and 3.125% notes due 2021; 2.25% U.S. Treasury notes due Nov. 15, 2025 for the 3.7% notes due 2024; and 2.25% U.S. Treasury notes due Nov. 15, 2025 for the 4.1% notes due 2026.

The total purchase price for each $1,000 principal amount was set using a reference yield and purchase yield as follows:

• $981.10 for the 1.35% notes due 2017 with reference yield of 0.803% and purchase yield of 2.903%;

• $1,042.14 for the 6% notes due 2017 with reference yield of 0.803% and purchase yield of 3.103%;

• $973.24 for the 1.875% notes due 2018 with reference yield of 0.803% and purchase yield of 3.303%;

• $974.22 for the 2.5% notes due 2019 with reference yield of 0.926% and purchase yield of 3.426%;

• $973.26 for the 2.95% notes due 2020 with reference yield of 1.253% and purchase yield of 3.603%;

• $967.94 for the 3.125% notes due 2021 with reference yield of 1.253% and purchase yield of 3.853%;

• $945.27 for the 3.7% notes due 2024 with reference yield of 1.751% and purchase yield of 4.501%; and

• $956.75 for the 4.1% notes due 2026 with reference yield of 1.751% and purchase yield of 4.651%.

Holders needed to tender their notes by 5 p.m. ET on Feb. 26 in order to receive the total purchase price, which includes an early tender payment of $30.00 per $1,000 principal amount.

Those who tender after the early deadline will receive the tender offer payment, which is the total payment less the early premium.

The company also will pay accrued interest to but excluding the settlement date of March 1 for early tendered and a final settlement date of March 15 for remaining tenders.

If the offer is oversubscribed, the notes will be accepted for purchase on a prorated basis. As previously announced, notes tendered before the early tender deadline will have priority over those tendered after the early deadline. Accordingly, if each tranche tender cap is reached by the early deadline, none of those respective tranche notes will be accepted for purchase after the early deadline.

Deutsche Bank also is tendering for some euro-denominated securities in separate offers.

Deutsche Bank Securities Inc. (866 627-0391 or 212 250-2955) is the dealer manager. Global Bondholder Services Corp. (212 430-3774 or 866 470-3700) is the tender agent and information agent.

Deutsche Bank is a bank based in Frankfurt.

© 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.