Old Mutual tenders for all £450 million 7.875% notes, some 8% notes

By Susanna Moon

Chicago, Oct. 25 – Old Mutual plc said it is tendering for any and all of its £450 million of 7.875% subordinated notes due Nov. 3, 2025 and for a capped amount of its £500 million of 8% subordinated notes due June 3, 2021.

Old Mutual is also seeking modifications to the terms and conditions of the 2025 notes to modify restrictions on the purchase of the securities by the company to allow the purchases under the tender, according to a company announcement.

The company has scheduled a meeting for Nov. 23 to be held in London.

For the 7.875% notes, the purchase price will be 125% of par with an early consent fee of 0.25%.

By tendering the 2025 notes, holders are also voting in favor of the proposed amendments at the meeting.

Holders may vote for the amendments without tendering their notes, however, by sending voting-only instructions and receive the fee of 0.25%.

To receive the purchase price for the 2025 notes, holders who tender their securities must not be represented at the meeting, the company said.

In other words, holders who tender their 2025 notes may not submit voting-only instructions or receive the early consent amount, and holders who send voting-only instructions may not tender their notes.

In the tender for the 8% notes, the issuer will purchase an amount equal to £560 million less the total amount paid for the 2025 notes.

The purchase price for the 8% notes will be 118.5%.

The tender offers will end at 11 a.m. ET on Nov. 3.

The early consent deadline is also 11 a.m. ET on Nov. 3 and the final consent deadline is 11 a.m. ET on Nov. 21.

Holders also will receive accrued interest.

The tender for the 2025 notes is contingent upon receiving consents for the proposal. The terms of the 2025 notes do not allow the company to purchase those notes before Nov. 3, 2020, or five years after the issue date, other than by a redemption or purchase funded out of the proceeds of a new issue of capital of at least the same quality as the 2025 securities.

The company said it is looking to amend the “restriction to permit completion of the 2025 offer and to otherwise bring certain of the provisions ... in line with current (market) standard.”

The quorum required for the meeting is one or more holders representing “a clear majority” of the outstanding notes. To pass, the measure requires a majority of at least three-fourths of the votes cast at the meeting.

Settlement is expected to occur on Nov. 24.

The dealer managers are Merrill Lynch International (+44 20 7996 5420 or DG.LM_EMEA@baml.com) and Nedbank Ltd., London Branch (+44 20 7002 3540 or liability.management@nedbank.co.uk). The tender agent is Lucid Issuer Services Ltd. (+44 20 7704 0880 or oldmutual@lucid-is.com).

Old Mutual is a London-based financial services company.

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