Old Mutual gets OK to call £116.99 million of 8% notes, 7.875% notes

By Susanna Moon

Chicago, Nov. 12 – Old Mutual plc said it secured the needed votes at adjourned meetings to amend its £72,102,000 of outstanding 8% subordinated notes due June 3, 2021 and its £44,889,000 of outstanding 7.875% subordinated notes due Nov. 3, 2025.

The company will redeem the notes on Nov. 15 at the call amount plus accrued interest, with pricing to be set at 6 a.m. ET on Nov. 13, according to a notice.

As reported Oct. 25, the bondholder meetings were adjourned to Nov. 12 in London because the meetings held Oct. 25 in London were not quorate.

The issuer was asking for approval to call the two series of notes that remain outstanding after the tender offer that ended at 11 a.m. ET on July 17.

The consent solicitation was extended until 11 a.m. ET on Nov. 7 from 11 a.m. ET on Oct. 22.

In the call, the hypothetical total purchase price is as follows:

• £500 million 8% notes with hypothetical total purchase price of 116.732% using the 1.5% U.K. Treasury gilt due Jan. 22, 2021 plus an early redemption spread of 50 basis points; and

• £450 million 7.875% notes with hypothetical total purchase price of 139.496% based on the 2% U.K. Treasury gilt due Sept. 7, 2025 plus an early redemption spread of 50 bps.

The consent fee is 3% for each series.

The quorum required was one or more persons representing at least two-thirds of the outstanding notes. To pass, each measure required a majority consisting of at least three-fourths of the votes cast.

The solicitation agent is Merrill Lynch International (+44 20 7996 5420 or DG.LM_EMEA@baml.com). The tabulation agent is Lucid Issuer Services Ltd. (+ 44 20 7704 0880 or oldmutual@lucid-is.com).

In the tenders that began July 9, the company was tendering for the notes at a purchase price of 116% for the 8% notes and 121% for the 7.875% notes.

The company accepted tenders for £268,782,000, or 78.85%, of the 8% notes and £15,953,000, or 26.22%, of the 7.875% notes in that offer.

Along with those tender offers, which resulted in retiring a “significant portion” of the notes, the company completed a managed separation of the Old Mutual Group with Old Mutual Ltd. now a holding company of Old Mutual plc, according to an announcement.

In light of those things, the company was looking to use “available liquidity to continue to manage the company's debt maturity profile by further reducing outstanding indebtedness and associated interest costs by retiring the relevant series in full should the relevant proposal be implemented,” the company previously said.

Old Mutual is a London-based financial services company.

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