NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM AUSTRALIA, NEW ZEALAND, SOUTH AFRICA, JAPAN, CANADA OR SWITZERLAND OR ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION
18 December 2013
The Co-operative Group and The Co-operative Bank Liability Management Exercise - Announcement of sanction of the Scheme by the court; confirmation of the settlement date for the Liability Management Exercise; confirmation of the total amount of Final Repayment Notes and Instalment Repayment Notes to be issued by The Co-operative Group and Bank T2 Notes and New Ordinary Shares to be issued by The Co-operative Bank; de-listing of existing subordinated securities of The Co-operative Bank
- Scheme sanctioned by the court following Sanction Hearing on 18 December 2013
- The Liability Management Exercise will settle on 20 December 2013
- Preference Shares, 13% Bonds, 5.5555% Bonds and Dated Notes to be de-listed
On 4 November 2013, Co-operative Group Limited ("The Co-operative Group" or the "Group") and The Co-operative Bank p.l.c. ("The Co-operative Bank" or the "Bank") announced their revised Recapitalisation Plan for The Co-operative Bank, including the liability management exercise to be concluded this year (the "Liability Management Exercise").
The Liability Management Exercise includes exchange offers (the "Exchange Offers") and related proposals (the "Proposals" and, together with the Exchange Offers, the "Offers") in respect of the following securities issued by The Co-operative Bank:
- 9.25% Non-Cumulative Irredeemable Preference Shares (ISIN: GB0002224516) (the "Preference Shares");
- 13% Perpetual Subordinated Bonds (ISIN: GB00B3VH4201) (the "13% Bonds"); and
- 5.5555% Perpetual Subordinated Bonds (ISIN: GB00B3VMBW45) (the "5.5555% Bonds").
In addition, the Liability Management Exercise includes a scheme of arrangement (the "Scheme") in respect of the following securities issued by The Co-operative Bank (together, the "Dated Notes"):
Description of the Securities
||Outstanding Principal Amount|
|Floating Rate Callable Step-up Dated Subordinated Notes due 2016
|5.875% Subordinated Callable Notes due 2019
|9.25% Subordinated Notes due 28 April 2021
|Fixed/Floating Rate Subordinated Notes due November 2021
|7.875% Subordinated Notes due 19 December 2022
|5.75% Dated Callable Step-up Subordinated Notes due 2024
|5.875% Subordinated Notes due 2033
Capitalised terms used and not otherwise defined in this announcement have the meanings given in the Consent and Exchange Offer Memorandum relating to the Liability Management Exercise (the "Consent and Exchange Offer Memorandum"), which is appended to and forms part of the respective Prospectuses published by The Co-operative Group and The Co-operative Bank on 4 November 2013 and supplemented on 4 December 2013, or (as applicable) in the explanatory statement relating to the Scheme (originally dated 18 November 2013 and amended on 4 December 2013).
Sanction of the Scheme
Following the Sanction Hearing on 18 December 2013, the court sanctioned the Scheme. The sanction order has been delivered to Companies House and accordingly the Scheme Effective Date has occurred. The Scheme Settlement Condition has also been satisfied and £125,000,002.50 in cleared funds in cash is standing to the credit of the Subscription Escrow Account in connection with the Additional New Ordinary Shares Offer.
Settlement of the Liability Management Exercise
The Liability Management Exercise, including the Offers and the Scheme, will settle on 20 December 2013 (the "Settlement Date") as planned. This means that holders will cease to hold their Preference Shares, 13% Bonds, 5.5555% Bonds and Dated Notes on the Settlement Date and will be eligible to receive their new Final Repayment Notes, Instalment Repayment Notes, Bank T2 Notes, New Ordinary Shares and/or Additional New Ordinary Shares, as applicable, and the relevant cash amounts payable under the terms of the Offers. It is expected that the Final Repayment Notes, Instalment Repayment Notes and Bank T2 Notes will be listed, and trading on the London Stock Exchange will commence, on or around 23 December 2013.
Confirmation of the total amount of Final Repayment Notes and Instalment Repayment Notes to be issued by The Co-operative Group and Bank T2 Notes and New Ordinary Shares to be issued by The Co-operative Bank
On the Settlement Date, The Co-operative Group expects to issue £109,062,852 in aggregate principal amount of Final Repayment Notes and £36,653,721.12 in aggregate principal amount of Instalment Repayment Notes, and The Co-operative Bank expects to issue £206,000,000 in aggregate principal amount of Bank T2 Notes (including the Bank T2 Notes issued both in exchange for 5.5555% Bonds and for Dated Notes) and 250,000,000 New Ordinary Shares (including Additional New Ordinary Shares).
De-listing of existing subordinated securities of The Co-operative Bank
In connection with settlement of the Liability Management Exercise, The Co-operative Bank will apply to the Financial Conduct Authority ("FCA") in accordance with the FCA's Listing Rules, and to the London Stock Exchange plc (the "LSE") in accordance with the LSE's Admission and Disclosure Standards, for the Preference Shares, 13% Bonds, 5.5555% Bonds and Dated Notes to be removed from the Official List maintained by the FCA and for their admission to trading on the LSE to be cancelled following the settlement date (given the required notice periods, the de-listing is expected to take effect on 22 January 2014).
The Co-operative Group: Tulchan Communications:
Russ Brady - 07880 784442 Susanna Voyle - 020 7353 4200
The Co-operative Bank:
Neither this announcement, the publication in which it is contained nor any copy of it may be taken, transmitted or distributed, directly or indirectly, into Australia, New Zealand, South Africa, Japan, Canada or Switzerland or any jurisdiction where to do so would constitute a violation of the relevant laws of such jurisdiction. Any failure to comply with this restriction may constitute a violation of securities law in those jurisdictions. The distribution of this document in other jurisdictions may also be restricted by law and persons into whose possession this document comes should inform themselves about, and observe, any such restrictions.
This announcement does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for any shares or any other securities nor shall it (or any part of it) or the fact of its distribution, form the basis of, or be relied on in connection with, any contract therefore. The availability of the transactions described herein and the distribution of this announcement in certain jurisdictions may be restricted by law and persons into whose possession any document or other information referred to herein comes should inform themselves about, and observe, any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.
In particular, this announcement does not constitute an offer for sale of, or a solicitation to purchase or subscribe for, any securities in the United States. No securities of the Group or the Bank have been, or will be, registered under the US Securities Act of 1933, as amended (the "Securities Act"), and securities of the Group or the Bank may not be offered or sold in the United States absent an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction of the United States. The Group and the Bank securities are being offered by means of a prospectus or Scheme document that may be obtained from the Bank and/or the Group, as applicable.
This announcement is an advertisement and not a prospectus. Investors should not make any investment decision regarding any securities referred to in this announcement or in the Liability Management Exercise except on the basis of information contained in the prospectuses (as supplemented) and Consent and Exchange Offer Memorandum published by the Group and the Bank and the Scheme documents made available by the Bank. The Group and the Bank expressly reserve the right to adjust or amend the terms of the Liability Management Exercise and the securities.
HSBC Bank plc ("HSBC") has been appointed as a dealer manager by the Bank and the Group to facilitate the LME and as adviser to the Bank in connection with the LME. HSBC is authorised and regulated by the PRA and the FCA and is acting exclusively for the Bank (in its capacity as a dealer manager and adviser) and the Group (in its capacity as a dealer manager) in connection with the LME and will not regard any other person (whether or not a recipient of this announcement or a holder of the Bank's securities) as a client in relation to the LME and will not be responsible to anyone other than the Bank and the Group for providing the protections afforded to its clients or for providing advice in relation to the LME or any other matter referred to in this announcement.
UBS Limited ("UBS") has been appointed as a dealer manager by the Bank and the Group to facilitate the LME and as adviser to the Group in connection with the LME. UBS is authorised and regulated by the PRA and the FCA and is acting exclusively for the Bank (in its capacity as a dealer manager) and the Group (in its capacity as a dealer manager and adviser) in connection with the LME and will not regard any other person (whether or not a recipient of this announcement or a holder of the Bank's securities) as a client in relation to the LME and will not be responsible to anyone other than the Bank and the Group for providing the protections afforded to its clients or for providing advice in relation to the LME or any other matter referred to in this announcement.
This announcement has been issued by and is the sole responsibility of the Bank and the Group. Neither HSBC nor UBS accepts any responsibility whatsoever for, or makes any representation or warranty, express or implied, as to the contents of this announcement or for any other statement made or purported to be made by it, or on its behalf, in connection with the Bank, the Group or the LME and nothing in this announcement may be relied upon as a promise or representation in this respect, whether or not in the past or future. Subject to applicable law, each of HSBC and UBS accordingly disclaims all and any responsibility or liability, whether arising in tort, contract or otherwise, which it might otherwise have in respect of this announcement or any such statement.