ICBC tenders for $137.9 million step-up perpetuals, seeks call consent

By Susanna Moon

Chicago, Dec. 7 – ICBC Standard Bank plc, formerly Standard Bank plc, said it began a tender offer for its $200 million step-up perpetual subordinated notes.

ICBC also is asking for noteholder approval to modify the note terms to allow the company to redeem any remaining notes after the end of the offer, according to a company press release.

The coupon for the $137,913,000 of outstanding perpetuals is 8.012% until the first call date of July 27, 2016, when interest will float at a rate of Libor plus 325 basis points.

The total purchase price will be 102% of par for notes tendered by 11 a.m. ET on Dec. 18, the early date.

The total amount includes an early tender premium of 2%, and the tender purchase price is par.

Holders who tender their notes will be deemed to vote in favor of the proposal.

As another option, holders may submit voting-only instructions and receive a consent payment of 2%.

The tender offer will end at 11 a.m. ET on Jan. 11, with settlement on Jan. 15.

The company will also pay accrued interest.

A noteholder meeting will be held in London on Jan. 12.

The quorum required at the meeting is two or more persons representing at least 66% of the outstanding notes, according to a separate announcement.

To pass, the measure requires a majority of at least 75% of the votes to be cast in favor.

Noteholders who submit voting-only instructions in favor of the proposal by 11 a.m. ET on Dec. 18 will receive the early consent fee of 2%.

The dealer managers are ICBC Standard Bank plc (+44 203 145 8480 / +44 203 145 6131 or marc.giesen@icbcstandard.com / connie.smith@icbcstandard.com / London-legal@icbcstandard.com) and UBS Ltd. (+44 20 7568 2133 or ol-liabilitymanagement-eu@ubs.com).

The tender agent is Lucid Issuer Services Ltd. (+44 20 7704 0880, Paul Kamminga, icbcstandardbank@lucid-is.com).

The company said it reviews its capital and funding requirements, capital and funding profile and market conditions on an ongoing basis and is making the tender offer to reduce term debt and the related expenses.

Also, the floating rate may be unattractive to noteholders, especially because they will be subordinated to senior creditors and depositors, the press release noted.

The bank is based in London. On Feb. 1, 2015, Industrial and Commercial Bank of China Ltd. acquired a controlling stake in Standard Bank’s London-based global markets business, which included Standard Bank plc.

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