Phoenix Group launches capped tender offer for sterling, dollar notes

By Marisa Wong

Los Angeles, Nov. 27 – Phoenix Group Holdings plc is inviting holders of its £428,113,000 6.625% subordinated notes due Dec. 18, 2025 (ISIN: XS1171593293) and its $500 million fixed-rate reset tier 2 notes due Sept. 4, 2031 (ISIN: XS2182954797) to tender their notes for purchase for cash up to a maximum aggregate principal amount, according to a Monday press release.

The maximum acceptance amount is expected to be set equal to the principal amount of new sterling-denominated fixed-rate reset tier 2 notes that the company plans to issue. The Regulation S tender offers are conditioned on the issuance of the new notes.

The principal amount of dollar notes accepted for purchase (if any) will be converted into pounds sterling at the exchange rate of $1.26000 per £1. The company expects to announce the tender cap as soon as practicable following the pricing of the new notes.

The purchase price for the 2025 sterling notes will be calculated based on the 3.5% U.K. Gilt due Oct. 22, 2025 and a fixed spread of 115 basis points. The purchase price is fixed at 94.75 for the 2031 dollar notes.

The company will also pay accrued interest.

Holders who participate in the tender offer and wish to subscribe for the new notes may be given priority in the allocation of the new notes. Likewise, holders who subscribe for new notes in addition to tendering notes will receive priority of acceptance in the relevant tender offer.

The company said it reserves the right to accept significantly more or less (or none) of the tendered notes of one series as compared to the other series.

Tenders may be subject to proration.

The offers will expire at 11 a.m. ET on Dec. 4.

Indicative results will be announced prior to the pricing time for the 2025 notes, which will be around 6 a.m. ET on Dec. 5. Final results will be announced after the pricing time.

Settlement is expected to be on Dec. 7.

The dealer managers for the tender offers are Banco Bilbao Vizcaya Argentaria, SA (+44 20 7397 6029 / 6061; liabilitymanagement@bbva.com), HSBC Bank plc (+44 20 7992 6237; LM_EMEA@hsbc.com), J.P. Morgan Securities plc (+44 20 7134 2468; liability_management_EMEA@jpmorgan.com), Merrill Lynch International (+44 20 7996 5420; DG.LM-EMEA@bofa.com) and NatWest Markets plc (+44 20 7678 5222; NWMliabilitymanagement@natwestmarkets.com).

The tender agent is Kroll Issuer Services Ltd. (+44 20 7704 0880; attn.: Jacek Kusion; phoenix@is.kroll.com; https://deals.is.kroll.com/phoenix).

The London-based life insurance and pension funds services company said the main purpose of the tender offers and the planned issuance of new notes is to proactively manage its expected redemption profile. The tender offers provide a liquidity event and, subject to the new issuance, concurrent reinvestment opportunity for noteholders.

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