Spain’s ICO takes in tenders for €274.92 million of six series, exchanges €273.33 million more

By Susanna Moon

Chicago, June 15 – Instituto de Credito Oficial, a state-owned corporate entity of Spain, accepted tenders for €274,922,000 of several note series and also exchanged €273,331,000 of notes for newly issued euro-denominated 4.75% notes due April 2020.

The final acceptance amount is €548,253,000 principal amount of the notes, according to an announcement.

As announced June 7, ICO was offering to buy or exchange up to €500 million pricing amount of the notes until 10 a.m. ET on June 14, with settlement planned for June 22.

In exchange, the company will issue €246.49 million of new notes with a yield of 0.403% at a clean price of 116.593% and dirty price of 117.283%. The new notes spread was 8 basis points over the new notes reference benchmark rate.

For the tender offer, pricing was set via an unmodified Dutch auction at 5 a.m. ET on June 15 using a reference security plus a maximum fixed spread.

For the group 1 notes, the results of the tender offer and exchange are listed below with the acceptance amounts as follow:

• €25,386,000 tenders for the €2,875,964,000 of outstanding €2.95 billion 4.125% notes due Sept. 28, 2017 with pricing set at 105.156% of par using the Sept. 28, 2017 benchmark rate and a spread of 5 basis points, which was the maximum spread, for a reference yield of 0.005%; and €59,523,000 exchanged at with an exchange yield of 0.055%, exchange price of 105.186% and exchange ratio of 0.896858.

• €9.3 million tenders for the €1,844,676,000 of outstanding €1,875,000,000 4.875% notes due Feb. 1, 2018 with pricing set at 107.724% using the Feb. 1, 2018 benchmark rate and a spread of 5 bps, which was the maximum spread, for a reference yield of 0.028%; and €23.59 million exchanged with an exchange yield of 0.078%, exchange price of 107.743% and exchange ratio of 0.918658; and

• €17,982,000 tenders for the €2,337,979,000 of outstanding €2.4 million 4.375% notes due May 20, 2019 with pricing set at 112.075% using the May 20, 2019 benchmark rate and a spread of 5 bps, which was the maximum spread, for a reference yield of 0.158%; and €29,232,000 exchanged with an exchange yield of 0.208%, exchange price of 112.079% and exchange ratio of 0.955628.

After settlement, the outstanding amounts will be €2,791,055,000 of the 4.125% notes, €1,811,786,000 of the 4.875% notes and €2,290,765,000 of the 4.375% notes.

For the tender offers, priority was allocated first to non-competitive instructions for the group 1 series up to the tender acceptance amount and then to competitive instructions for the group 1 notes up to the tender acceptance amount less the amount of non-competitive tenders.

As for the exchange, priority will go to instructions up to the exchange acceptance amount.

For the group 2 series, the results are as follow:

• €89,939,000 tendered €3,193,796,000 of outstanding €3.35 billion 4.625% notes due Jan. 31, 2017 with pricing set at 102.833% using Jan. 31, 2017 benchmark rate of negative 0.070% and an average spread of 4.71 bps; and €68,338,000 exchanged with an exchange yield of negative 0.010%%, exchange price of 102.842% and exchange ratio of 0.876871.

• €87.31 million tendered €2,598,221,000 of outstanding €2,598,221,000 4.875% notes due July 30, 2017 with pricing set at 105.345% using July 30, 2017 benchmark rate of negative 0.014% and an average spread of 4.54 bps; and €64,299,000 exchanged with an exchange yield of 0.046, exchange price of 105.372% and exchange ratio of 0.89844; and

• €45,005,000 tendered €1,309,447,000 of outstanding €1.35 billion 4% notes due April 30, 2018 with pricing set at 107.263% using April 30, 2018 benchmark rate of 0.02% and an average spread of 5.93 bps; and €28,349,000 exchanged with an exchange yield of 0.08%, exchange price of 107.268% and exchange ratio of 0.914607.

The maximum spread for the group 2 notes was 6 bps.

After the offers, the outstanding amounts will be €3,035,519,000 of the 4.625% notes, €2,446,612,000 of the 4.875% notes and €1,236,093,000 of the 4% notes.

For the group 2 tender offers, the issuer previously said it would accept non-competitive tenders up to the tender acceptance amount less the amount of non-competitive instructions for the group 1 series notes accepted for purchase and then for exchange, instructions for the group 2 notes up to the exchange amount accepted less the amount of instructions for the group 1 notes accepted for exchange.

The issuer said it would accept notes tendered under non-competitive instructions for group 1 notes ahead of non-competitive instructions for group 2 notes and of any competitive tenders.

For the exchange, group 1 notes were to be accepted before group 2 notes.

The offers are being made as part of ICO’s balance sheet management and are aimed at proactively managing the company’s forthcoming debt maturities. The offers are intended to provide some liquidity to noteholders.

ICO said it expects the offers to have a “positive impact on its capital structure, with the objective of enhancing the levels of ICO’s capital provisioning and, in particular, its solvency position.”

Madrid-based ICO previously said it reserved the right to accept significantly less than or more than the target amount.

Banco Bilbao Vizcaya Argentaria, SA (+44 207 648 7516, fax +44 207 397 6094 or liabilitymanagement@bbva.com), HSBC Bank plc (+44 20 7992 6237 or liability.management@hsbcib.com) and Societe Generale (+44 20 7676 7579 or liability.management@sgcib.com) are the dealer managers.

Lucid Issuer Services Ltd. (+44 (0)20 7704 0880 Attention: David Shilson, or ico@lucid-is.com) is the tender and exchange agent.

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