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Published on 3/7/2017 in the Prospect News Liability Management Daily.

Commerzbank offers longer maturity debt in exchange for tier 2 notes

New York, March 7 – Commerzbank AG announced it is offering to exchange 4% subordinated notes due 2027 for its €1,253,629,000 of 6.375% subordinated tier II notes due 2019.

The new notes will qualify as tier 2 instruments and will mature on March 30, 2027. They will be an add-on to an existing €500 million series of notes issued on Jan. 16, according to a notice from the issuer.

Holders who participate will receive an amount of new notes set using an exchange ratio.

To calculate the exchange ratio, Commerzbank will divide an exchange price at which the existing notes will be accepted by an issue price for the new notes.

The exchange price, in turn, will be set to reflect a yield to maturity on the existing notes equal to the exchange spread of 18 basis points and the interpolated mid-swaps rate.

For the issue price of the new notes, Commerzbank will use a new issue spread of 291 bps.

The exchange ends at 6 a.m. ET on March 14, and pricing will be set at 9 a.m. ET the same day.

Settlement is planned for March 17.

Commerzbank said it is carrying out the exchange “to efficiently manage its tier 2 capital in light of prevailing market conditions.”

Commerzbank AG (+49 69 136 59920 or liability.management@commerzbank.com), Merrill Lynch International (+44 20 7996 5420 or dg.lm_emea@baml.com) and UBS Ltd. (+44 20 7568 2133 or ol-liabilitymanagement-eu@ubs.com) are dealer managers.

Lucid Issuer Services ltd. (+44 20 7704 0880 or commerzbank@lucid-is.com) is exchange agent.

Commerzbank is a Frankfurt-based commercial bank.


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