Green Island tenders for distressed tier 1 perpetuals at discount

By Susanna Moon

Chicago, Feb. 2 - Green Island Capital Securities plc said it began a tender offer for the outstanding €46,058,000 of its €125 million of perpetual tier 1 pass-through securities to create additional core tier 1 capital and strengthen the quality of the capital base of EBS Building Society.

The outstanding €46,058,000 principal amount of notes is secured over €46,058,000 floating-rate guaranteed non-cumulative perpetual capital securities of EBS Capital No. 1 SA.

As a result of increased core capital requirements, the EBS group is seeking to augment its existing core tier-1 capital base by purchasing the existing non-core tier-1 capital instruments originated from within the EBS group at a price below their par value, according to a Green Island press release.

The Central Bank of Ireland set a new minimum capital requirement of 10.5% core tier 1, and the Central Bank requires EBS to raise sufficient capital to achieve a capital ratio of at least 12% core tier 1 by Feb. 28. The Central Bank will require this additional capital to be in the form of reserves, equity or equivalent instruments for EBS.

The company said it will pay €175 for each €1,000 principal amount. It will not pay any accrued interest.

"The offer is a voluntary, market-based approach, which affords a choice to noteholders and reflects the current distressed trading levels of the notes. The notes currently trade at a significant discount compared to their initial issue price," according to the release.

Haven Mortgages Ltd., a wholly owned subsidiary of EBS, has committed to buying a number of the securities equal those accepted for purchase under the offer.

The offer will end at noon ET on Feb. 23.

Settlement is expected to occur on Feb. 25.

The dealer managers are J.P. Morgan Securities Ltd. (44 20 7777 1333, attn: Sebastien Bamsey, sebastien.m.bamsey@jpmorgan.com; 44 20 7779 2468, attn: Dimis Theodorou, FIG_Syndicate@jpmorgan.com), DZ BANK AG Deutsche Zentral-Genossenschaftsbank (49 69 74 47 01, fax 49 69 74 47 16 85, attn: Patricio Bustos-Heppe, DCM Origination/Andreas Armyros, Capital Products, mail@dzbank.de).

The tender agent is Lucid Issuer Services Ltd. (44 20 7704 0880, fax 44 20 7067 9098, attn: Yves Theis / Lee Pellicci, greenisland@lucid-is.com).

EBS is a Dublin-based financial institution.

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