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Novo Banco takes in tenders for 347.26 million notes by Dutch auction
By Susanna Moon
Chicago, June 30 Novo Banco SA announced the results of its Dutch auction tender offers for up to 500 million of eight series of notes issued by its Luxembourg branch or London branch.
Novo Banco will accept for purchase all 347,261,929 of the tendered notes without proration, according to an announcement.
The bank was tendering for the $200 million 3% notes due June 21, 2022 issued by Novo Banco SA, Luxembourg Branch with an implied yield of 11.885% and minimum price of 63.5% per $1,000 principal amount.
Novo Banco took in tenders for $90,196,000 of the 3% notes for an aggregate purchase price of $58,619,896.50.
The breakdown in the tenders for seven series of notes issued by Novo Banco SA, London branch with pricing for each 1,000 principal amount is as follows:
24,261,000 of the 200 million 5% notes due April 4, 2019 with an implied yield of 18.627% and a minimum price of 72.50% for an aggregate purchase price of 18,346,649;
72,934,000 of the (660 million outstanding) 750 million 5% notes due April 23, 2019 with an implied yield of 18.382% and a minimum price of 72.5% for an aggregate purchase price of 54,984,146;
32.97 million of the (416.4 million outstanding) 450 million 5% notes due May 14, 2019 with an implied yield of 18.125% and a minimum price of 72.5% for an aggregate purchase price of 24,869,925;
26.96 million of the (290.25 million outstanding) 450 million 5% notes due May 21, 2019 with an implied yield of 18.041% and a minimum price of 72.5% for an aggregate purchase price of 20,526,035;
22.58 million of the (270 million outstanding) 450 million 5% notes due May 23, 2019 with an implied yield of 18.018% and a minimum price of 72.5% for an aggregate purchase price of 17,208,251;
16,292,000 of the (160 million outstanding) 225 million 5% notes due Feb. 24, 2022 with an implied yield of 13.261% and a minimum price of 68.5% for an aggregate purchase price of 11,160,020; and
69,934,000 of the (215 million outstanding) 300 million 5% notes due March 15, 2022 with an implied yield of 13.189% and a minimum price of 68.5% for an aggregate purchase price of 48,919,013.
Holders could submit tender instructions that were competitive, or those that specified a purchase price greater than the minimum price in increments of 0.05%, or that were non-competitive, or ones that did not specify a price or that specified a price less than the minimum.
The tender offers ended at 11 a.m. ET on June 29, with settlement following on July 4. The offers began June 23.
As a basis for the offers, the bank described a challenging environment [that] required Novo Banco to deal with an exceptional and complex situation while complying with stringent regulatory requirements, according to a previous announcement.
The offers were part of the banks business plan intended to benefit both its capital position and future interest expenses, the release noted.
The minimum purchase prices in the offers reflected a premium of about 1.5% to 2.5% above the market prices of the notes as of Wednesday, the previous release noted.
The bank also noted that the secondary market prices of the notes have been pressured by concerns over the Portuguese economy and its financial sector, the status of Novo Banco as a bridge bank, the uncertainty of the assets and liabilities of Novo Banco and various litigation proceedings, the bank explained.
Among other factors, the secondary market for the notes also has suffered and has become more volatile as the bail-in tool entered into force on Jan. 1, 2016, the bank noted.
Also, the notes are hurt by lack of liquidity in the secondary market.
Deutsche Bank AG, London Branch (+44 0 20 7545 8011 or liability.management@db.com) and Nomura International plc (+44 0 20 7103 5652 or liability.management@nomura.com) are the dealer managers. Lucid Issuer Services Ltd. (+44 0 20 7704 0880, Thomas Choquet / Victor Parzyjagla, or novobanco@lucid-is.com) is the tender agent.
Novo Banco is a bank based in Lisbon.
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