Citizens posts final exchange, tender results for subordinated notes

By Wendy Van Sickle

Columbus, Ohio, Sept. 30 – Citizens Financial Group, Inc. announced the final results of its exchange offers for five series of subordinated notes and related tender offers, according to a press release on Wednesday.

As previously reported, the following notes are covered under the offers:

• $350 million principal amount outstanding of the 4.15% subordinated notes due 2022 (Cusip: 75524RAA7);

• $250 million principal amount outstanding of the 3.75% subordinated notes due 2024 (Cusip: 174610AL9);

• $42 million principal amount outstanding of the 4.023% subordinated notes due 2024 (Cusip: 174610AC9);

• $250 million principal amount outstanding of the 4.35% subordinated notes due 2025 (Cusip: 174610AJ4); and

• $750 million principal amount outstanding of the 4.3% subordinated notes due 2025 (Cusip: 174610AK1).

Exchange results

The following amounts were accepted for exchange, and information includes the cash consideration as part of the exchange (with more details below):

• For the 4.15% notes due 2022, $168,073,000 of the $350 million principal amount outstanding were tendered, and noteholders will receive a cash consideration of $69.64 based on the 0.125% U.S. Treasury due Aug. 31, 2022 plus 50 basis points;

• For the 3.75% notes due 2024, $91,371,000 of the $250 million principal amount outstanding were tendered, and noteholders will receive a cash consideration of $106.57 based on the 0.25% U.S. Treasury due Aug. 31, 2025 plus 60 bps;

• For the 4.023% notes due 2024, $16.8 million of the $42 million principal amount outstanding were tendered, and noteholders will receive a cash consideration of $117.99 based on the 0.25% U.S. Treasury due Aug. 31, 2025 plus 75 bps;

• For the 4.35% notes due 2025, $54,909,000 of the $250 million principal amount outstanding were tendered, and noteholders will receive a cash consideration of $152.37 based on the 0.25% U.S. Treasury due Aug. 31, 2025 plus 80 bps; and

• For the 4.3% notes due 2025, $289,402,000 of the $750 million principal amount outstanding were tendered, and noteholders will receive a cash consideration of $160.29 based on the 0.25% U.S. Treasury due Aug. 31, 2025 plus 80 bps.

The exchange is based on $1,000 principal amount of old notes being exchanged for $1,000 principal amount of new notes due 2032 plus a cash payment, as detailed above.

The new notes will bear interest at 2.638%, determined by adding the yield of the 0.625% U.S. Treasury due Aug. 15, 2050 plus 198 bps.

Pricing for the cash consideration and the coupon for the new notes was determined at 11 a.m. ET on Sept. 25.

The offer is conditioned upon at least $300 million of new notes being issued.

The offer is also conditioned upon a cash offer completion condition and an accounting treatment condition.

The offer is open to Rule 144A qualified institutional buyers, noteholders who are not U.S. persons or those who are not acquiring notes for a U.S. person.

Exchange details

The exchange offers expired at 5 p.m. ET on Sept. 25, also the withdrawal deadline.

The expiration time for those tendering their notes via guaranteed delivery procedure is two business days after the exchange offer expiration, also at 5 p.m. ET.

Settlement is expected to take place on Sept. 30.

Global Bondholder Services Corp. is the information agent and exchange agent for the exchange offers (866 470-3800, 212 430-3774; http://gbsc-usa.com/eligibility/Citizens).

Cash tender offers

The cash tender offers are not open to qualified institutional buyers located outside of the United States, those who are not a U.S. person, those who are not acquiring new notes for the account of a U.S. person nor non-U.S. qualified offerees.

The terms of the cash tender offer are virtually the same as the exchange offers listed above except instead of exchanging old notes for new notes, tendering noteholders will receive a total consideration in cash.

The cash considerations were calculated based on the same U.S. Treasuries listed above with identical fixed spreads.

Pricing was determined at 11 a.m. ET on Sept. 25.

Interest will also be paid up to, but not including, the cash settlement date.

The tender offers are capped and acceptance for purchase of old notes will not be subject to proration.

The following amounts were accepted:

• None of the 4.15% notes due 2022;

• None of the 3.75% notes due 2024;

• None of the 4.023% notes due 2024;

• $1,075,000, capped at $15 million, of the 4.35% notes due 2025 were tendered and will be accepted; and

• $10,436,000 of the capped offer for up to $30 million of the 4.3% notes due 2025 were tendered and will be accepted.

Cash tender details

The cash offers expired at 5 p.m. ET on Sept. 25, also the withdrawal deadline.

Settlement occurred on Sept. 30.

Notes tendered via guaranteed delivery procedures had to be received by 5 p.m. ET two business days after the expiration time.

Global Bondholder Services Corp. is also the information agent and tender agent for the cash offers (866 470-3800, 212 430-3774; http://gbsc-usa.com/Citizens).

Citizens is a Providence, R.I.-based retail bank holding company.

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