Ras Al Khaimah begins tender, exchange offers for trust certificates

By Angela McDaniels

Tacoma, Wash., Nov. 22 - The Government of the Emirate of Ras Al Khaimah said its Investment and Development Office began tender and exchange offers for the $325 million of trust certificates due 2012 issued by Rakia Sukuk Co. Ltd. and a tender offer for the AED 1 billion trust certificates due 2013 issued by RAK Capital.

The office is offering par in cash for the 2012 certificates. Holders who tender by the early tender deadline - 11 a.m. ET on Nov. 30 - will also receive an early tender premium of $20.00 per $1,000 principal amount of certificates.

Alternatively, holders can offer to exchange their 2012 certificates for new dollar-denominated trust certificates due in the first quarter of 2016.

The exchange ratio will be 1.02 for 2012 certificates tendered by the early tender deadline and 1.00 for those tendered after the early deadline.

The maximum amount of 2012 certificates that will be accepted for exchange is $150 million. If the amount of certificates tendered for exchange exceeds this amount, the certificates will be exchanged on a pro rata basis, and any certificates not accepted for exchange due to proration will instead be included in the tender offer.

In order to participate in the exchange offer, holders must tender enough 2012 certificates to result in the issuance of at least $100,000 principal amount of new certificates.

The office is offering cash for the 2013 certificates. The purchase price will be announced no later than 5 a.m. ET on Dec. 1 and will be at least par.

Certificate holders will also receive accrued distributions.

The offers will expire at 6 a.m. ET on Dec. 6 and settle on Dec. 15.

Holders must tender at least $100,000 of 2012 certificates or at least AED 500,000 of 2013 certificates in order to participate in the offers.

Rakia Sukuk is also soliciting consents from the holders of the 2012 certificates to pass an extraordinary resolution that would allow the Ras Al Khaimah Investment Authority to redeem the 2012 certificates at par.

Holders will vote on the extraordinary resolution at a meeting on Dec. 8. Holders who tender their 2012 certificates will be deemed to have appointed the tender and exchange agent as their proxy to attend the meeting and to vote in favor of the extraordinary resolution.

Holders of the 2012 certificates who are not eligible to participate in the offers are still eligible to participate in the consent solicitation. Those who consent will receive $20.00 for each $1,000 principal amount of certificates.

The new trust certificates will be issued by RAK Capital and will be listed on the London Stock Exchange. The maturity date and periodic distribution rate will be set on Nov. 29.

The spread used to set the periodic distribution rate will be determined by a book-building process. The completion of the exchange offer will be conditioned on the dealer managers receiving commitments to subscribe for at least $150 million principal amount of the new certificates.

The emirate said the reason for the offers and the consent solicitation is to use some surplus cash resources to extend the maturity profile of its debt and to consolidate its sovereign issuance within RAK Capital as the issuing entity.

The offers are not being made in the United States or Italy.

The dealer managers are Citigroup Global Markets Ltd. (+44 0 207 986 8969) and Royal Bank of Scotland plc (+ 44 0 207 085 8056). The tender and exchange agent is Citibank, NA (+44 0 207 508 3867).

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.