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Instituto de Credito Oficial to buy, exchange 357.87 billion notes
By Wendy Van Sickle
Columbus, Ohio, Oct. 20 Instituto de Credito Oficial accepted at total of 357.87 billion of notes for purchase and exchange under an offer for up to 500 million of eight series of its notes, according to a notice.
The offers will end at 10 a.m. ET on Wednesday.
Specifically, the company accepted 248,496,000 of notes for repurchase and 109,374,000 of notes for exchange for 126,613,000 of new notes.
The breakdown of notes accepted from each series covered by the offers is
Of the 2,967,366,000 of outstanding 4.625% notes due Jan. 31, 2017, 6,947,000 accepted for purchase, 1,227,000 accepted for exchange, totaling 8,174,000;
Of the 1,943,147,000 of outstanding 4.875% notes due July 30, 2017, 21,578,000 accepted for purchase, 407,000 accepted for exchange, totaling 21,985,000;
Of the 2,694,552,000 of outstanding 4.125% notes due Sept. 28, 2017, 23,156,000 accepted for purchase, 15,603,000 accepted for exchange, totaling 38,759,000;
Of the 1,808,786,000 of outstanding 4.875% notes due Feb. 1, 2018, 4,978,000 accepted for purchase, 2,726,000 accepted for exchange, totaling 7,704,000;
Of the 1,232,677,000 of outstanding 4% notes due April 30, 2018, 43,731,000 accepted for purchase, 3,548,000 accepted for exchange, totaling 47,279,000;
Of the 2,283,509,000 of outstanding 4.375% notes due May 20, 2019, 18,908,000 accepted for purchase, 10,653,000 accepted for exchange, totaling 29,561,000;
Of the 1,252,047,000 of outstanding 4.75% notes due April 30, 2020, 97,825,000 accepted for purchase, 55,904,000 accepted for exchange, totaling 153,729,000; and
Of the 2.45 billion of outstanding 6% notes due March 8, 2021, 31,373,000 accepted for purchase, 19,306,000 accepted for exchange, totaling 50,679,000.
Tender offer pricing
Pricing was determined at 5 a.m. ET on Oct. 20 by reference to the sum of the offer purchase spread specified or deemed specified by the relevant noteholder and the relevant reference benchmark yield for that series.
The company determined a minimum purchase spread for each series of notes through an unmodified Dutch auction procedure. The minimum purchase spread for a series of notes was not permitted to be higher than the maximum purchase spread for that series.
The maximum purchase spread was 6 basis points for the 6% notes due 2021, 5 bps for the 4.75% notes due 2020 and 4 bps for each of the other series of notes.
For the notes due January 2017, the reference benchmark yield was negative 0.345%, for an average purchase spread of 3.28 basis points and an average purchase price of 101.313;
For the notes due July 2017, the reference benchmark yield was negative 0.291%, for an average purchase spread of 3.56 bps and an average purchase price of 103.904;
For the notes due September 2017, the reference benchmark yield was negative 0.275%, for an average purchase spread of 3.66 bps and an average purchase price of 104.9038;
For the notes due February 2018, the reference benchmark yield was negative 0.226%, for an average purchase spread of 3.45 bps and an average purchase price of 106.438;
For the notes due April 2018, the reference benchmark yield was negative 0.211%, for an average purchase spread of 3.56 bps and an average purchase price of 106.318;
For the notes due May 2019, the reference benchmark yield was negative 0.075%, for an average purchase spread of 3.84 bps and an average purchase price of 111.32;
For the notes due April 2020, the reference benchmark yield was negative 0.007%, for an average purchase spread of 4.42 bps and an average purchase price of 116.472; and
For the notes due April 2020, the reference benchmark yield was negative 0.064%, for an average purchase spread of 4.54 bps and an average purchase price of 125.633.
Holders will also receive accrued interest.
New notes/exchange ratio
The 126,613,000 of new notes coupon was set at 0.5% by reference to the sum of the new notes spread, 7 bps, and the new notes reference benchmark rate, 0.532%.
The new notes price, 99.303, was calculated by reference to the new notes yield of 0.602%.
For each series of notes, the exchange ratio was calculated by dividing the exchange price of that series by the new notes price.
The exchange price for each series was determined on the pricing date by reference to the sum of the exchange spread of that series and the relevant reference benchmark yield for that series, as follows:
For the notes due January 2017, the exchange yield was negative 0.305%, for an exchange price of 101.311 and an exchange ratio of 1.020221;
For the notes due July 2017, the exchange yield was negative 0.251%, for an exchange price of 103.9 and an exchange ratio of 1.046293;
For the notes due September 2017, the exchange yield was negative 0.235%, for an exchange price of 104.035 and an exchange ratio of 1.047652;
For the notes due February 2018, the exchange yield was negative 0.186%, for an exchange price of 106.431 and an exchange ratio of 1.071780;
For the notes due April 2018, the exchange yield was negative 0.171%, for an exchange price of 106.311 and an exchange ratio of 1.070572;
For the notes due May 2019, the exchange yield was negative 0.035%, for an exchange price of 111.316 and an exchange ratio of 1.120973;
For the notes due April 2020, the exchange yield was 0.057%, for an exchange price of 116.449 and an exchange ratio of 1.172663; and
For the notes due April 2020, the exchange yield was 0.124%, for an exchange price of 125.559 and an exchange ratio of 1.264403.
Holders will also receive accrued interest in cash.
The settlement date is expected to be Oct. 26.
The dealer managers are Banco Santander SA (44 207 756 6909, 44 207 756 6646, tommaso.grospietro@sandantergcb.com or king.cheung@sandantergcb.com), Credit Agricole CIB (44 207 214 5482 or liability.management@ca-cib.com) and Societe Generale (44 20 7676 7579 or liability.management@sgcib.com). The tender and exchange agent is Citibank, NA, London Branch (44 20 7508 3867 or exchange.gats@citi.com.
Instituto de Credito Oficial is a state-owned bank based in Madrid.
© 2015 Prospect News.
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