Old Mutual tenders for £175 million of fixed-to-floaters, preferreds

By Susanna Moon

Chicago, Nov. 6 - Old Mutual plc said it began a tender offer for up to £175 million of its outstanding €500 million fixed-to-floating step-up option B undated subordinated notes and £350 million perpetual preferred callable securities.

The current coupon is 5% for the €494.65 million of outstanding floaters and 6.376% for the £348 million outstanding perpetual preferreds, according to a company press release.

Pricing will be set under a modified Dutch auction with a minimum price of €1,010 per €1,000 principal amount of the floaters and £960 per £1,000 principal amount of perpetual preferreds.

The purpose of the offers is to purchase some outstanding debt of Old Mutual and thereby further reduce the overall level of debt and achieve the stated debt reduction target, as part of the debt reduction strategy announced in February 2012, the press release noted.

Holders must tender their notes by 11 a.m. ET on Nov. 13. Settlement has been set for Nov. 19.

The dealer managers are Barclays Bank plc (+44 0 20 7773 8990, attn: liability management group, email to eu.lm@barclays.com), Nedbank Ltd., London Branch (+44 0 20 7002 3487, attn: liability management group, email to liability.management@nedbankcapital.co.uk) and Societe Generale (+44 0 20 7676 7579, attn: liability management, email to liability.management@sgcib.com).

The tender agent is Lucid Issuer Services Ltd. (+44 0 20 7704 0880, attn: Thomas Choquet, email: oldmutual@lucid-is.com).

The issuer is a London-based financial services company.

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