Northern Rock completes tender offers for eight series of notes

By Jennifer Chiou

New York, Dec. 15 - Northern Rock (Asset Management) plc announced the wrap of the tender offers for eight series of its notes that began on Nov. 16.

The tender offers ended at 5 a.m. ET on Dec. 13.

The company received and accepted tenders for the following:

• £43.54 million of its £50 million of 10 3/8% subordinated bonds due 2018 with an early tender consideration of 90% of par and purchase price of 88% of par;

• £149.4 million of its £150 million of 9 3/8% subordinated bonds due 2021 with an early tender consideration of 88% of par and purchase price of 86% of par;

• £241,481,000 of its £250 million of fixed-rate step-up subordinated callable notes due 2017 with an early tender consideration of 72.5% of par and purchase price of 70.5% of par;

• £296.81 million of its £300 million of fixed-rate step-up subordinated callable notes due 2015 with an early tender consideration of 86% of par and purchase price of 84% of par;

• $21,445,750 of its $30,652,425 million of 8% undated subordinated notes with an early tender consideration of 40% of par and purchase price of 38% of par;

• £10,297,000 of its £10,698,000 of fixed-rate step-up undated subordinated notes with an early tender consideration of 38% of par and purchase price of 36% of par;

• £54,075,000 of its £156.59 million of 8.399% step-up callable perpetual reserve capital instruments with an early tender consideration of 50% of par and purchase price of 48% of par; and

• £79,751,000 of its £110,425,000 of 7.053% callable perpetual core tier-one notes with an early tender consideration of 65% of par and purchase price of 63% of par.

Northern Rock said that it also solicited consents to approve modifications that would give it the option to purchase all, but not only some, of the securities that remain outstanding after the offer. It tallied the needed consents for the securities except the tier-one notes. It has entered into supplemental trust deeds.

For the securities receiving the needed consents, the company said it has exercised its option to purchase the notes and bonds on Dec. 19.

In the case of the lower tier 2 notes, which includes the first four series listed above, and tier-one notes, the company will pay accrued interest.

Holders who either (a) tendered their securities by 5 a.m. ET on Dec. 13 and confirmed that they are retail investors or (b) did not confirm that they are retails investors but tendered their securities by noon ET on Nov. 30 received the early tender payment. Holders otherwise received the purchase price.

A retail investor is a holder who holds less than £100,000 of the securities of any series and whose ordinary activities do not involve buying, selling, subscribing for or underwriting instruments, according to Northern Rock.

The dealer managers were Deutsche Bank AG, London Branch (44 20 7545 8011 or liability.management@db.com) and Royal Bank of Scotland plc (44 20 7085 8056 or liabilitymanagement@rbs.com). The tender and information agent was Lucid Issuer Services Ltd. (44 20 7704 0880 or nram@lucid-is.com).

Northern Rock is a Newcastle, England-based state-owned bank.

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