Hong Kong’s FWD still working on meeting conditions to pay consent fee

By Marisa Wong

Los Angeles, Feb. 28 – FWD Ltd. and FWD Group Ltd. issued updates on their consent solicitations launched in June 2021.

The issuers stated again they will pay consent fees for the five series for which the necessary consents have been received. Payment of the consent fees is subject to several conditions, including a regulatory condition, equity raise condition, ratings condition and lender consent requirement.

The issuers said in a notice on Tuesday that they “will continue to take active steps towards satisfaction of all the settlement conditions and will provide a further update in due course with respect to expected timing for satisfaction of the settlement conditions.”

The issuers made a very similar announcement on Sept. 14 and, before that, on Feb. 28, 2022, as reported.

Background

On June 17, 2021, FWD Ltd. and FWD Group each launched consent solicitations for three series of notes.

The solicitations expired at 11 a.m. ET on July 6, 2021.

The main purpose of each consent solicitation was to substitute the issuer with PCGI Intermediate Holdings Ltd.

As of the start of the consent solicitations, the assets of PCGI Intermediate primarily consisted of its holding of shares in the FWD entities.

PCGI Intermediate had submitted a draft registration statement with the Securities and Exchange Commission for an initial public offering of American Depositary Shares. In connection with that, FWD intends on restructuring its outstanding debt so that all of that debt is either transferred to PCGI Intermediate or otherwise refinanced.

FWD Ltd. solicitation

FWD Ltd. asked holders to approve some amendments to its $325 million 5% notes due 2024 (ISIN: XS1106513762), its $250 million 6¼% subordinated perpetual capital securities (ISIN: XS1520804250) and its $200 million 5½% subordinated perpetual capital securities (ISIN: XS1748857379).

The company proposed amendments to the following:

• Relevant conditions relating to the substitution of the issuer with PCGI Intermediate;

• The definition of change of control;

• A condition of the 5% notes due 2024 to allow for resolutions to be passed by way of electronic consent through the clearing systems by or on behalf of holders of at least 75% in aggregate principal amount of the 2024 notes; and

• A condition of the 5% notes due 2024 to amend the cross-acceleration threshold to $20 million from $10 million.

Approval of the proposed changes required consents from a majority of at least 75% of the outstanding amount of each series.

For the 5% notes due 2024, holders voted on the proposed changes at a meeting. For the two perpetual series, holders voted on the extraordinary resolution by way of circulation resolution by electronic consent.

The meeting for the 5% notes due 2024 was held at 12:15 a.m. ET on July 9, 2021. No meetings were held for the 6¼% perpetuals or the 5½% perpetuals.

The company offered an early consent fee of 0.45% for the 5% notes due 2024, 0.15% for the 6¼% perpetuals and 0.45% for the 5½% perpetuals. Holders who delivered consents by the early consent deadline at 11 a.m. ET on June 30, 2021 are eligible to receive the early consent fee.

The company offered consent fees of 0.1%, 0.05% and 0.1% for the 5% notes due 2024, 6¼% perpetuals and 5½% perpetuals, respectively, for consents delivered after the early deadline.

The issuer said on Feb. 28, 2022 it will pay the relevant consent fees for the 2024 notes and the 5½% perpetuals.

FWD Group solicitation

FWD Group sought consents to amend its $750 million zero-coupon subordinated perpetual capital securities (ISIN: XS1628340538), $900 million 5¾% subordinated notes due 2024 (ISIN: XS2022434364) and $600 million 6 3/8% perpetual capital securities (ISIN: XS2038876558).

The company proposed to make changes to the following:

• Relevant conditions relating to the substitution of the issuer with PCGI Intermediate; and

• A condition of the 5¾% notes due 2024 to amend the cross-acceleration threshold to $20 million from $10 million.

Approval of the proposed changes required consents from a majority of at least 75% of the outstanding amount of each series.

Holders voted on the extraordinary resolution by way of circulation resolution by electronic consent.

Meetings had originally been scheduled to begin at 1 a.m. ET on July 9, 2021 but were later cancelled.

The company offered an early consent fee of 0.3% to holders who delivered consents by the early consent deadline at 11 a.m. ET on June 30, 2021.

The company offered a consent fee of 0.1% for consents delivered after the early deadline.

The issuer said on Feb. 28, 2022 it will pay the applicable consent fees for all three series.

Hongkong and Shanghai Banking Corp. Ltd. (+852 3941 0223, +44 20 7992 6237, liability.management@hsbcib.com) was the solicitation agent for both consent solicitations.

Morrow Sodali Ltd. (+44 20 8089 3287, +852 2319 4130, fwd@investor.morrowsodali.com, https://bonds.morrowsodali.com/fwd) was the information and tabulation agent.

Hong Kong-based FWD is the insurance business of investment group Pacific Century Group.

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