Old Mutual reopens tender offer for £450 million 7.875% notes

By Wendy Van Sickle

Columbus, Ohio, Nov. 9 – Old Mutual plc said it is extending and reopening its tender offer for its £450 million of 7.875% subordinated notes due Nov. 3, 2025.

By the original expiration of the tender offer for the 2025 notes, 11 a.m. ET on Nov. 3, the company had received tenders of £361,292,000, or 80.29%, of the notes, leaving £88,708,000 of the notes outstanding, according to a Thursday press release.

The offer opened on Oct. 25.

Old Mutual also sought 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.

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

The company said it is reopening the tender offer under the same terms as the original tender offer until 11 a.m. ET on Nov. 21.

A meeting is set for 11 a.m. on Nov. 23.

The expected settlement date is Nov. 24.

The company said it has not made a decision on whether to accept any tenders for purchase under the 2025 offer.

The purchase price will be 125% of par. The company had previously also offered an early consent fee of 0.25%, but the deadline to receive that fee has passed and is not being extended.

Holders had the option to submit voting-only instructions in favor of the amendments in exchange for the early consent fee, however, and those who did may revoke the instruction and instead submit a tender instruction.

The company's tender offer for a capped amount of its £500 million of 8% subordinated notes due June 3, 2021, which was also announced on Oct. 25, is not being extended and the results will be announced following the Nov. 23 meeting in London.

In the tender for the 8% notes, the issuer previously said it 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 final consent deadline is 11 a.m. ET on Nov. 21.

Holders also will receive accrued interest.

The tender for the 2025 notes continues to be 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.

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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