Nationwide Building prices tender for three series of dollar notes

By Susanna Moon

Chicago, March 7 – Nationwide Building Society said it priced the tender offer for three series of notes at 11 a.m. ET on March 7.

The purchase price for each $1,000 principal amount was set using the reference yield of the bid-side price of the reference security plus a fixed spread as follows:

• $1 billion of 2.35% notes due January 2020 with pricing set at $993.54 using the 2.25% Treasury note due Feb. 29, 2020 plus 45 basis points for a reference yield of 2.258%;

• $800 million of 6.25% notes due February 2020 with pricing set at $1,066.91 using the 2.25% Treasury note due Feb. 29, 2020 plus 45 bps for a reference yield of 2.258%; and

• $1.25 billion of 2.45% notes due July 2021 with pricing set at $983.27 using the 2.25% Treasury note due Feb. 15, 2021 plus 55 bps for a reference yield of 2.424%.

As announced, Feb. 28 the issuer is tendering for the three note series until 5 p.m. ET on March 7, with settlement set for March 12.

Tendered notes may be withdrawn at any time before the offer ends.

The society plans to price new dollar-denominated senior non-preferred notes and the tender offer is conditioned on closing of the new notes.

The society said it will consider whether an investor seeking an allocation of the new notes has tendered their notes in the offer.

“The society has a strong liquidity position considerably in excess of current regulatory requirements,” according to a notice.

“By tendering for certain senior unsecured securities and issuing new senior non-preferred securities, the society intends to manage its overall wholesale funding level and better optimize its future interest expense, whilst building its stock of eligible liabilities designed to count towards its minimum requirement for own funds and eligible liabilities.”

The dealer managers are BNP Paribas (888 210-4358 or 212 841-3059 or +44 20 7595 8668), Citigroup Global Markets Ltd. (800 558-3745, 212 723-6106 or +44 20 7986 8969), J.P. Morgan Securities LLC (212 834-3424 or 886 834-4666) and UBS Ltd. (888 719-4210, 203 719-4210 or +44 20 7568 2133). The tender agent is Lucid Issuer Services Ltd. (+44 20 7704 0880).

Concurrent non-U.S. tender offer

At the same time, the society is tendering for some of its sterling- and euro-denominated securities in separate offers that will run until 11 a.m. ET on March 8, subject to financing.

The offers will be capped at an amount equal to £3.25 billion less the sterling equivalent of the total amount payable in the concurrent U.S. tender offers.

The notes covered by the offers are as follows:

• €750 million 1.625% notes due April 2019 with pricing to be set using a purchase yield of negative 0.35% for a purchase price of 102.096 assuming a settlement date of March 13;

• €1.25 billion 0.5% notes due October 2019 with pricing to be set using a purchase yield of negative 0.25% for a purchase price of 101.227 assuming a settlement date of March 13;

• €1 billion 1.125% notes due June 2022 with pricing to be set using the 2022 June notes interpolated mid-swap rate minus 15 basis points;

• €1.25 billion 1.25% notes due March 2025 with pricing to be set using the 2025 notes interpolated mid-swap rate plus 0 bps;

• £700 million 5.625% notes due September 2019 with pricing to be set using the 3.75% U.K. Treasury gilt due September 2019 plus 20 bps;

• £500 million 2.25% notes due April 2022 with pricing to be set using the 4% U.K. Treasury gilt due March 2022 plus 40 bps;

• £500 million 3% notes due May 2026 with pricing to be set using the 1.5% U.K. Treasury gilt due July 2026 plus 60 bps; and

• £500 million 3.25% notes due January 2028 with pricing to be set using the 6% U.K. Treasury gilt due December 2028 plus 70 bps.

Pricing will be set at 6 a.m. ET on March 9.

The company plans “to manage its overall wholesale funding level and better optimize its future interest expense, while building its stock of eligible liabilities designed to count towards its minimum requirement for own funds and eligible liabilities,” according to a separate announcement.

Settlement is expected to occur on March 13.

BNP Paribas (+44 20 7595 8668 or liability.management@bnpparibas.com), Citigroup Global Markets Ltd. (+44 20 7986 8969 or liabilitymanagement.europe@citi.com), J.P. Morgan Securities plc (+44 20 7134 2468 or emea_LM@jpmorgan.com) and UBS Ltd. (+44 20 7568 2133 or ol-liabilitymanagement-eu@ubs.com) are the dealer managers. Lucid Issuer Services Ltd. (+44 20 7704 0880 or nationwide@lucid-is.com) is the information and tender agent.

Nationwide is a member-owned provider of retail financial services based in Swindon, England.

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