National Asset Management launches tender offer for perpetual bonds

By Marisa Wong

Morgantown, W.Va., April 5 – National Asset Management DAC launched a tender offer for its callable perpetual subordinated fixed-rate bonds on April 3, according to a notice.

The offer expires at 7 a.m. ET on April 23.

Pricing will be determined through a reverse unmodified Dutch auction procedure.

Each bondholder wishing to participate in the tender offer must submit a tender instruction specifying the amount of bonds to be tendered and a purchase price.

Under the reverse unmodified Dutch auction procedure, National Asset Management will determine the aggregate nominal amount of bonds it will accept for purchase and the maximum purchase price it will pay for those bonds. The final acceptance amount will be determined based on the total amount of bonds tendered and the purchase prices specified by tendering holders. The maximum purchase price will be the lowest price that will allow the company to accept for purchase the final acceptance amount. The company will not accept for purchase any bonds tendered at prices greater than the maximum purchase price.

National Asset Management said it will not make any separate payment of accrued interest for tendered bonds accepted for purchase.

Bonds tendered in the offer may be subject to proration. In particular, if the total amount of bonds tendered at prices at or below the maximum purchase price is greater than the final acceptance amount, the offeror intends to accept for purchase (a) first, all bonds tendered at purchase prices below the maximum purchase price in full and (b) second, all bonds tendered at the maximum purchase price on a pro rata basis such that the aggregate amount of bonds accepted for purchase does not exceed the offer cap.

In the event of any pro rata scaling, the company will only accept tenders of bonds subject to proration to the extent that the scaling will not result in the transfer of bonds in an amount less than €1 million, the minimum denomination of the bonds.

According to the notice, holders of Ballsbridge Repackaging DAC’s €768 million secured perpetual notes may also participate in National Asset Management’s tender offer.

Holders of the Ballsbridge perpetual notes have the right to put their notes in specie at any time. This allows noteholders to convert their notes into National Asset Management’s perpetual subordinated bonds, which can then be tendered in the tender offer.

The exercise of a put in specie is subject to, amongst other things, the principal amount to be redeemed being a multiple of €1 million and the issuer, Ballsbridge, having sufficient National Asset Management underlying bonds to meet all redemption requests.

In the event a noteholder does not hold notes with a denomination that is a multiple of €1 million as required for an in specie redemption, Goodbody Stockbrokers UC, the realization agent, will, on a best efforts basis, attempt to match noteholders to potentially facilitate those holders participating in the tender offer.

To participate in an in specie redemption a noteholder must deliver a redemption notice to Goodbody by 1 p.m. ET on April 11.

Results of the tender offer are expected to be announced on April 25. Settlement is slated for April 30.

Based in Dublin, National Asset Management focuses on assets transferred from banks.

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