Arion Bank seeks consents to amend covered bonds due 2026

By Marisa Wong

Los Angeles, Feb. 12 – Arion Bank hf issued a notice of a covered bondholder meeting to holders of its outstanding €300 million series 2021-1 tranche 1 0.05% fixed-rate covered bonds due Oct. 5, 2026 consolidated with €200 million series 2021-1 tranche 2 0.05% fixed-rate covered bonds due Oct. 5, 2026 (ISIN: XS2391348740).

At the meeting, which will be held via teleconference on March 8, holders will consider and vote on an extraordinary resolution to amend the bonds.

The issuer is proposing to amend the bonds’ final terms and deed of covenant so that the bonds will no longer be rated by S&P Global Ratings and the covenants relating to credit ratings provided by S&P in respect of the bonds or the issuer will cease to apply.

The issuer noted that the bonds will continue to be rated by Moody’s Investors Service, and the covenants provided to support the rating from Moody’s and endorsed by Moody’s Deutschland GmbH will continue to apply. Also, the issuer has no obligation to maintain any credit ratings by S&P, and the proposed amendments will not change this.

The consent solicitation is open to persons who are not retail investors in either the European Economic Area or the United Kingdom.

The issuer is offering an early participation fee of 0.025% to eligible bondholders who deliver voting instructions by 11 a.m. ET on Feb. 23, the early instruction deadline.

Bondholders who are not eligible holders who deliver voting instructions by that same deadline may receive an ineligible covered bondholder payment equivalent to the early participation fee.

The expiration deadline for consent instructions from eligible bondholders or ineligible covered bondholder instructions is 5 a.m. ET on March 7.

The quorum at the meeting is one or more eligible persons representing not less than two-thirds of the outstanding nominal amount of the covered bonds. If the meeting is adjourned, the threshold will drop down to one-third of the outstanding bonds.

To pass at the meeting or any adjourned meeting, the extraordinary resolution requires a majority in favor consisting of at least 75% of the eligible persons voting at that meeting.

Bank of New York Mellon, London Branch is the fiscal agent.

Barclays Bank Ireland plc (+44 20 3134 8515; eu.lm@barclays.com) is the solicitation agent.

Kroll Issuer Services Ltd. (attn.: Alessandro Zorza; +44 20 7704 0880; arionbank@is.kroll.com; https://deals.is.kroll.com/arionbank) is the tabulation agent.

Arion is a Reykjavik, Iceland-based bank.

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