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Published on 8/16/2018 in the Prospect News Liability Management Daily.

Prudential gets OK to amend 6 7/8% bonds, 5 7/8% bonds for demerger

By Susanna Moon

Chicago, Aug. 16 – Prudential plc said it secured the needed approval to amend its £300 million of 6 7/8% bonds due 2023 and £250 million of 5 7/8% bonds due 2029 at meetings held Thursday in London.

The extraordinary resolution for each series was conditional upon the passing of the measure for the other series, and the amendments will be implemented on Friday, according to a notice.

As announced July 25, the company was soliciting consents for the two note series in connection with a planned demerger.

The issuer plans to split its U.K. and Europe business into two separately listed companies, which would constitute a default under the bond terms because Prudential Assurance Co. Ltd. will cease to be a subsidiary of the company.

The total early payment for votes sent by the early voting deadline of noon ET on Aug. 8 was 2% for the 6 7/8% bonds and 11% for the 5 7/8% bonds.

The total payment consists of a voting fee of 0.5% and an early voting amount of 1.5% for the 6 7/8% bonds and voting fee of 3.5% and an early voting amount of 7.5% for the 5 7/8% bonds.

Holders will receive the total early amount regardless of whether they send instructions in favor of or against the proposed changes, as long as the extraordinary resolution passes for each series and the amendment is implemented, the company previously noted.

The final voting deadline was 5 a.m. ET on Aug. 14.

In order to form a quorum, there needed to be two or more persons representing a clear majority of each series of bonds. To pass, the amendment required a majority consisting of at least three-quarters of the votes cast at each meeting.

The issuer previously said that a special committee of the Investment Association, which holds about 42.9% of the bonds, planned to vote in favor of the proposal.

The solicitation agents are Barclays Bank plc (+44 20 3134 8515 or eu.lm@barclays.com), Goldman Sachs International (+44 20 7774 9862 or liabilitymanagement.eu@gs.com) and NatWest Markets plc (+44 20 7678 5282 or liabilitymanagement @natwestmarkets.com).

The tabulation agent is Lucid Issuer Services Ltd. (+44 20 7704 0880 or prudential@lucid-is.com). The principal paying agent is Citibank, NA, London Branch.

Prudential is a London-based life insurance and financial services company.


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