Oma Savings Bank starts consent solicitation for four covered bonds

By Mary-Katherine Stinson

Lexington, Ky., Dec. 19 – Oma Savings Bank plc announced a consent solicitation for its outstanding €400 million 0.01% rate covered bonds due 2027 (ISIN: FI4000466412), €600 million 1.5% rate covered bonds due 2026 (ISIN: FI4000522974), €300 million 0.125% rate covered bonds due 2024 (ISIN: FI4000378674) and €250 million 0.125% rate covered bonds due 2023 (ISIN: FI4000425830) to approve certain amendments to the terms and conditions of the bonds, according to a press release.

The bonds were issued under OmaSp’s €3 billion loan program.

The proposed amendments would amend the applicable law of the covered bonds to the Finnish law under the Act on Mortgage Banks and Covered Bonds (CBA), which would allow OmaSp to maintain one cover asset pool for both the covered bonds and the future covered bonds. This is only possible if the proposed amendments are implemented.

The bank stated that maintaining one cover asset pool would provide more transparency and equal treatment of holders of both the covered bonds and the future covered bonds.

According to the bank, as stated in the press release, the benefits of such a change would be:

• The priority over the assets in the cover asset pool would be 100% under the CBA, whereas, under the previous law the priority is limited to the collateral value of the assets;

• The CBA introduces a liquidity buffer requirement absent under the previous law which ensures that a cover pool continuously contains certain types of liquid funds in an amount which covers the maximum net outflow relating to covered bonds over the coming 180-day period – if a covered bond contains a term according to which the maturity of the covered bond may be extended, the issuer may use the extended maturity date for the purpose of determining the net outflow;

• The CBA allows for covered bond contractual terms according to which the issuer may extend the maturity of the covered bond with the authorization granted by the FIN-FSA, otherwise known as the soft bullet clause; and

• Only covered bonds that are subject to the CBA can be labeled as a European Covered Bond (Premium).

The proposed amendments are subject to satisfaction of the conditions concerning consent as defined in the memorandum.

OmaSp has initiated a procedure in writing for the noteholders of each series to approve the proposed amendments by a separate resolution for each series.

The procedure in writing will end at 9 a.m. ET on Jan. 5, which is the early consent deadline.

To be eligible to participate a person must be registered in the relevant system of Euroclear Finland Ltd. as owner or authorized nominee of one or several covered bonds five business days before Jan. 5.

The procedure requires a quorum of at least two persons representing at least 50% or one noteholder holding 100% of the principal amount of the series of notes outstanding to provide replies. To pass, the resolution requires the consent of noteholders representing at least 50% of the votes cast in the procedure in writing.

The bank will pay an early consent fee of 0.05% of the nominal amount of each covered bond to bondholders who vote in favor of the proposed amendments before the early consent deadline, or on any later date that OmaSp may specify at its sole discretion.

If the resolution is passed and the required consents obtained, the proposed amendments will take effect at the earliest on Jan. 19 or on any later date that OmaSp may specify at its sole discretion.

Settlement is expected to take place five business days after the resolution has passed.

Borenius Attorneys Ltd is acting is the legal adviser to OmaSp.

OP Corporate Bank plc (+358 50 599 1281, liabilitymanagement@op.fi) is the consent solicitation agent and tabulation and paying agent.

OmaSp is the largest savings bank in Finland based on total assets.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.