Exchange and Tender Offers

RNS Number : 5474P

Royal Bank of Scotland Group PLC

26 March 2009

 



NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN THE UNITED STATES, OR TO ANY PERSON LOCATED OR RESIDENT IN THE REPUBLIC OF ITALY

(SEE 'OFFER RESTRICTIONS' BELOW)

26 March 2009

RBS FINANCING LIMITED, A SUBSIDIARY OF THE ROYAL BANK OF SCOTLAND GROUP PLC, ANNOUNCES UPPER TIER 2 AND TIER 1 EXCHANGE OFFERS AND TENDER OFFERS

RBS Financing Limited ('RBSF'), a wholly-owned subsidiary of The Royal Bank of Scotland Group plc ('RBSG' and, together with its subsidiaries, the 'Group'), has today launched (1) invitations to holders of certain existing sterling Tier 1 and Upper Tier 2 securities of the Group to offer to exchange any or all of such securities for new senior unsecured notes of The Royal Bank of Scotland plc (the 'Exchange Offers') and (2) invitations to holders of certain euro and US dollar Tier 1 and Upper Tier 2 securities of the Group to tender any or all of such securities for purchase by RBSF for cash (the 'Tender Offers'). The Exchange Offers are being made on the terms and subject to the conditions set out in an Exchange Offer Memorandum dated 26 March 2009 (the 'Exchange Offer Memorandum'). The Tender Offers are being made on the terms and subject to the conditions set out in a Tender Offer Memorandum dated 26 March 2009 (the 'Tender Offer Memorandum'). 

RBSF has also today launched tender offers (the 'U.S. Tender Offers') in respect of certain other existing Tier 1 and Upper Tier 2 securities which are being made in compliance with U.S. tender offer rules. Details of the U.S. Tender Offers are set out in a separate press release dated the date hereof.

The rationale of the Exchange Offers and the Tender Offers is to create additional Core Tier 1 capital in the capital structure of the Group and to further strengthen the quality of its capital base.

Capitalised terms used and not otherwise defined in this announcement have the meaning given in the Exchange Offer Memorandum or Tender Offer Memorandum, as applicable.

THE EXCHANGE OFFERS

Subject to certain restrictions set out in the Exchange Offer Memorandum, all holders (the 'Exchange Holders') of the existing securities listed below (the 'Exchange Offer Existing Notes') are being invited by RBSF to offer to exchange their Exchange Offer Existing Notes for new notes constituting senior unsecured debt of The Royal Bank of Scotland plc ('RBS') (the 'New Notes').

The Exchange Offer Existing Notes (which comprise Tier 1 and Upper Tier 2 capital of the Group) and the New Notes for which they may be exchanged are as follows:

Exchange Offer Existing Notes										New Notes
						Amount
					Coupon	outstanding	Call
	Cur.	Issuer	Listing	Form	(%)	(m)	date	ISIN		Issuer: The Royal Bank of Scotland plc
	GBP	RBS Capital Trust D	London	Trust Preferred Securities	5.6457	400.0	08-Jun-17	XS0277453774		2014 Notes
	GBP	RBS	London	Bonds	7.375	175.0	31-Aug-10	XS0116447599		Currency: GBP
	GBP	RBS	London	Bonds	5.000	400.0	18-Mar-11	XS0247645160		Tenor: 5 Year
	GBP	RBS	London	Bonds	6.250	350.0	17-Dec-12	XS0137784426		Status: Senior Unsecured
	GBP	RBS	London	Bonds	6.000	500.0	08-Sep-14	XS0193721544
	GBP	RBS	London	Bonds	5.125	500.0	14-Mar-16	XS0164828385		Minimum New Issue Amount: £100.0m
	GBP	RBS	London	Bonds	9.500	200.0	12-Aug-18	XS0045071932
	GBP	NatWest	London	Bonds	7.625	325.0	21-Jan-10	XS0102493508 and  GB0006210255		Expected Ratings: Aa3/A+/AA-
	GBP	RBS	London	Bonds	5.500	600.0	03-Dec-19	XS0206633082		2024 Notes
	GBP	RBS	London	Bonds	6.200	500.0	22-Mar-22	XS0144810529		Currency: GBP
	GBP	RBS	London	Bonds	5.625	900.0	16-Sep-26	XS0154144132		Tenor: 15 Year
	GBP	RBS	London	Bonds	5.625	500.0	07-Jun-32	XS0138939854		Status: Senior Unsecured
	GBP	NatWest	London	Bonds	7.125	200.0	05-Oct-22	XS0102493680		Minimum New Issue Amount: £100.0m
	GBP	NatWest	London	Bonds	11.500	200.0	17-Dec-22	XS0041078535		Expected Ratings: Aa3/A+/AA-
	GBP TOTAL					5,750.0

Each Exchange Offer is conditional upon the aggregate principal amount of the relevant series of New Notes to be issued being not less than £100,000,000 (each, a 'Minimum New Issue Size').

Exchange Holders who validly offer to exchange their Exchange Offer Existing Notes will, if their offer to exchange is accepted by RBSF, receive an aggregate principal amount of the relevant series of New Notes (rounded down to the nearest £1,000) equal to the product of (i) the aggregate principal amount of the relevant series of Exchange Offer Existing Notes validly offered for exchange and (ii) the Exchange Ratio for such series of Exchange Offer Existing Notes. The Exchange Ratio in respect of each series of Exchange Offer Existing Notes will be the ratio (rounded down to six decimal places) calculated by dividing the relevant Exchange Price or Early Exchange Price, as applicable, by the relevant New Issue Price. RBSF intends to announce (i) the Exchange Price for each series of Exchange Offer Existing Notes and (ii) the New Issue Spreads for each series of the New Notes at or around 3.00 p.m., London time, on 26 March 2009. RBSF intends to announce (i) its decision whether to accept valid offers of Exchange Offer Existing Notes for exchange pursuant to any or all of the Exchange Offers and, if so accepted, (ii) the New Issue Price and the New Issue Coupon for each series of the New Notes, (iii) the Exchange Ratio for each series of Exchange Offer Existing Notes and relevant series of New Notes and (iv) the final aggregate principal amounts of the series of Exchange Offer Existing Notes accepted for exchange and New Notes to be issued at or around 10.30 a.m., London time, on 23 April 2009 (the 'Pricing Time'). Each New Issue Price and New Issue Coupon will be calculated in accordance with market convention and the New Issue Prices will be as close as possible to 100 per cent. of the principal amount of the New Notes, allowing for rounding down of the New Issue Coupons to the nearest 0.125 per cent in accordance with market convention. Each New Issue Coupon will be determined by reference to the 5 Year Sterling Mid-Swap Rate, in the case of the 2014 Notes, and the 15 Year Sterling Mid-Swap Rate, in the case of the 2024 Notes, as further described in the Exchange Offer Memorandum.

Each Exchange Price (which will apply to each £1,000 in principal amount of the relevant Exchange Offer Existing Notes) will be increased by £50 (each Exchange Price as so increased, an 'Early Exchange Price') for the relevant Exchange Offer Existing Notes of each Exchange Holder that are validly offered for exchange by 4.00 p.m. (London time) on 8 April 2009 (the 'Early Exchange Deadline') and accepted by RBSF.

Exchange Holders wishing to participate in the Exchange Offers must submit, or arrange to have submitted on their behalf, a duly completed Exchange Instruction by the Early Exchange Deadline or 4.00 p.m., London time, on 22 April 2009 (the 'Expiration Deadline'), as the case may be, as further described in the Exchange Offer Memorandum. Holders of the £200,000,000 11.500 per cent. Undated Subordinated Notes issued by National Westminster Bank Plc ('NatWest') and convertible into 200,000,000 8.392 per cent. Non-Cumulative Preference Shares of £1 each (the 'NatWest Subordinated Convertible Notes') who are eligible to participate in the Exchange Offer and who hold the NatWest Subordinated Convertible Notes in CREST or otherwise outside of the Clearing Systems must also comply with additional procedures as further described in the Exchange Offer Memorandum.

A cash amount in sterling will be paid by or on behalf of RBSF on the Settlement Date to each relevant Exchange Holder equal to (i) the Accrued Interest Payment and (ii) the Cash Rounding Amount (if applicable) which arises as a result of the application of the relevant Exchange Ratio.

No offer to exchange the Exchange Offer Existing Notes of a relevant series will be accepted by RBSF unless such offer to exchange by an Exchange Holder relates to an aggregate principal amount of Exchange Offer Existing Notes of that series for such Exchange Holder to be eligible to receive, in accordance with the terms of the Exchange Offers, a principal amount of the relevant series of New Notes at least equal to £100,000. 

Settlement of the Exchange Offer is expected to occur on 29 April 2009 (the 'Settlement Date').

Separately, RBSF proposes to invite those holders of the NatWest Subordinated Convertible Notes who are not Investment Professionals and are located and resident in the United Kingdom, Jersey, Guernsey and the Isle of Man (the 'Eligible Retail Holders') to tender their NatWest Subordinated Convertible Notes to RBSF for purchase by it for cash on an extended timetable following the completion of the Exchange Offers (such invitation, the 'Retail Offer'). The purchase price for each £1,000 in principal amount of the NatWest Subordinated Convertible Notes pursuant to the Retail Offer will be a cash amount equal to the Early Exchange Price. The Retail Offer will be made on the terms and subject to the conditions to be set out in a tender offer memorandum that will be made available to Eligible Retail Holders only on the announcement of the Retail Offer following completion of the Exchange Offers. The Retail Offer is being made on the basis that the NatWest Subordinated Convertible Notes were originally sold to Eligible Retail Holders and such holders are considered unlikely to hold the Minimum Offer Amount. Any Eligible Retail Holder that is eligible to participate in the Exchange Offer for the NatWest Subordinated Convertible Notes may still participate in such Exchange Offer if it wishes to do so.

Expected Timetable

Events		Dates and Times (London time)
Commencement of the Exchange Offers		26 March 2009
Pricing Announcement		At or around 3 p.m. on 26 March 2009
Early Exchange Deadline		4 p.m., on 8 April 2009
Expiration Deadline		4 p.m., on 22 April 2009
Pricing Time		At or around 10.30  a.m. on 23 April 2009
Announcement of Pricing and Exchange Offer Results		As soon as reasonably practicable after the above Pricing Time
Settlement Date		29 April 2009

Exchange Holders are advised to check with the bank, securities broker, or other intermediary through which they hold their Exchange Offer Existing Notes whether such intermediary applies different deadlines for any of the events specified above, and then to allow for such deadlines if such deadlines are prior to those set out above. The deadlines set by each Clearing System and CREST will be earlier than the relevant deadlines above.

THE TENDER OFFERS

Subject to certain restrictions set out in the Tender Offer Memorandum, all holders (the 'Tender Holders') of the existing securities listed below (the 'Tender Offer Existing Notes') are being invited to tender their Tender Offer Existing Notes for purchase by RBSF for cash.

The Tender Offer Existing Notes (which comprise Tier 1 and Upper Tier 2 capital of the Group) are as follows:

						Amount
					Coupon	outstanding	Call
	Cur.	Issuer	Listing	Form	(%)	(m)	date	ISIN
	EUR	RBS Capital Trust A	Luxembourg	Trust Preferred Securities	6.467	1,250.0	30-Jun-12	XS0149161217
	USD	RBS Capital Trust B	Luxembourg	Trust Preferred Securities	6.800	750.0	31-Mar-08	XS0159056208
	EUR	RBS Capital Trust C	London	Trust Preferred Securities	4.243	500.0	12-Jan-16	XS0237530497
	EUR	RBS	London	Bonds	5.125	500.0	03-Jul-14	XS0195230635
	EUR	RBS	London	Bonds	Floating Rate	1,000.0	03-Jul-14	XS0195231526
	USD TOTAL					750.0
	EUR TOTAL					3,250.0

The Purchase Price for each €1,000 or U.S.$1,000, as applicable, in principal amount of Tender Offer Existing Notes accepted by RBSF for purchase pursuant to the Tender Offers will be announced at or around 3.00 p.m., London time, on 26 March 2009, as described in the Tender Offer Memorandum. In addition, each Purchase Price (which will apply to each €1,000 or U.S.$1,000, as the case may be, in principal amount of the relevant Tender Offer Existing Notes) will be increased by €50 or U.S.$50, respectively, for the relevant Tender Offer Existing Notes of each Tender Holder that are validly tendered for purchase by 4.00 p.m., London time, on 8 April 2009 (the 'Early Tender Deadline') and accepted by RBSF. 

Tender Holders wishing to participate in the Tender Offers must submit, or arrange to have submitted on their behalf, by the Early Tender Deadline or 4.00 p.m., London time, on 22 April 2009 (the 'Expiration Deadline'), as the case may be, a duly completed Tender Instruction, as further described in the Tender Offer Memorandum.

RBSF will announce whether it has decided to accept valid tenders of Tender Offer Existing Notes pursuant to all or any of the Tender Offers on 23 April 2009 at or around 10.30 a.m., London time, and, if so accepted, will also announce at such time the final aggregate principal amount(s) of the series of Tender Offer Existing Notes accepted for purchase.

Settlement of the Tender Offers is expected to occur on 27 April 2009. 

Expected Timetable

Events		Dates and Times (London time)
Commencement of the Tender Offers		26 March 2009
Pricing Announcement		At or around 3 p.m., on 26 March 2009
Early Tender Deadline		4 p.m., on 8 April 2009
Expiration Deadline		4 p.m., on 22 April 2009
Announcement of Tender Offer Results		At or around 10.30  a.m., on 23 April 2009
Settlement Date		27 April 2009

Tender Holders are advised to check with the bank, securities broker or other intermediary through which they hold their Tender Offer Existing Notes whether such intermediary applies different deadlines for any of the events specified above, and then to allow for such deadlines if such deadlines are prior to those set out above. The deadlines set by each Clearing System will be earlier than the relevant deadlines above.

GENERAL

Exchange Holders and Tender Holders (together, the 'Holders') are advised to read carefully the Exchange Offer Memorandum or Tender Offer Memorandum, as applicable, for full details of, and information on, the procedures for participating in the Exchange Offers and the Tender Offers.

Subject to applicable law and as provided in the Exchange Offer Memorandum and Tender Offer Memorandum, RBSF may, in its sole discretion, extend, re-open, amend, waive any condition of or terminate any or all of the Exchange Offers or the Tender Offers at any time.

Neither the Exchange Offers nor the Tender Offers are being made in the United States or Italy or to any U.S. person or to any person located or resident in Italy and are also restricted in other jurisdictions, as more fully described below and in the Exchange Offer Memorandum and Tender Offer Memorandum.

Requests for information in relation to the Exchange Offers or the Tender Offers should be directed to the Joint Dealer Managers in relation to the Exchange Offers and the Tender Offers, being The Royal Bank of Scotland Plc and UBS Limited:

Arranger, Joint Dealer Manager and Global Co-ordinator  The Royal Bank of Scotland plc 135 Bishopsgate London EC2M 3UR	Joint Dealer Manager and Global  Co-ordinator  UBS Limited 1 Finsbury Avenue London EC2M 2PP United Kingdom
Tel: [phone]/8056	Tel: [phone]
Fax: [phone]	Fax:[phone]
Attention: Liability Management Shazia Azim/Andrew Burton	Attention: Liability Management Group Duane Herbert/Mark T Watkins
email: [e-mail]/[e-mail]	email: [e-mail]/[e-mail]

HSBC Bank plc (together with the Joint Dealer Managers, the 'Managers') is also acting as a Global Co-ordinator in the Exchange Offers and the Tender Offers. 

Requests for information in relation to the procedures for exchanging Exchange Offer Existing Notes or tendering Tender Offer Existing Notes (the Exchange Offer Existing Notes and the Tender Offer Existing Notes together, the 'Existing Notes') in, and for any documents or materials relating to, the Exchange Offers or the Tender Offers should be directed to the Exchange and Tender Agent (or the Registrar, in the case of the NatWest Subordinated Convertible Notes held outside of the Clearing Systems):

EXCHANGE AND TENDER AGENT

Lucid Issuer Services Limited 436 Essex Road London N1 3QP United Kingdom

Tel: [phone]

Fax: [phone]

Attention:  Sunjeeve Patel, Lee Pellicci, Yves Theis

email: [e-mail]

REGISTRAR

Computershare Investor Services PLC Corporate Actions Bristol BS99 6AH

Tel: [phone]

Fax: [phone]

Attention:  Steve Anderson

email: [e-mail]

DISCLAIMER

This announcement must be read in conjunction with the Exchange Offer Memorandum and the Tender Offer Memorandum. This announcement, the Exchange Offer Memorandum and the Tender Offer Memorandum contain important information which must be read carefully before any decision is made with respect to the Exchange Offers or the Tender Offers. If any Holder is in any doubt as to the action it should take, it is recommended to seek its own legal, tax and financial advice, including as to any tax consequences, from its stockbroker, bank manager, solicitor, accountant or other independent financial adviser. Any individual or company whose Existing Notes are held on its behalf by a broker, dealer, bank, custodian, trust company or other nominee must contact such entity if it wishes to participate in the Exchange Offers or the Tender Offers. None of RBSF, RBSG, RBS, NatWest, RBS Capital Trust A, RBS Capital Trust B, RBS Capital Trust C, RBS Capital Trust D (together, the 'RBS Entities'), the Dealer Managers, the Exchange and Tender Agent, or any person who controls, or is a director, officer, employee or agent of such persons, or any affiliate of such persons, makes any recommendation as to whether Holders should participate in the Exchange Offers or the Tender Offers.

No offer or invitation to acquire or exchange any securities is being made pursuant to this announcement. None of this announcement, the Exchange Offer Memorandum or the Tender Offer Memorandum constitute an invitation to participate in the Exchange Offers or the Tender Offers in any jurisdiction in which, or to or from any person to or from whom, it is unlawful to make such invitation under applicable securities laws and offers of Existing Notes for exchange pursuant to the Exchange Offers and tenders of Existing Notes pursuant to the Tender Offers will not be accepted from Holders in any jurisdiction where such invitation or offer to exchange or tender is unlawful.

The distribution of this announcement, the Exchange Offer Memorandum and the Tender Offer Memorandum in certain jurisdictions may be restricted by law. Persons into whose possession this announcement and/or the Exchange Offer Memorandum and/or the Tender Offer Memorandum comes are required by each of the RBS Entities, the Dealer Managers and the Exchange and Tender Agent to inform themselves about, and to observe, any such restrictions.

OFFER RESTRICTIONS 

United States

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN THE UNITED STATES

These materials are not for distribution, directly or indirectly, in or into the United States (including its territories and possessions, any State of the United States and the District of Columbia). The Exchange Offers and the Tender Offers are not being made, directly or indirectly, in or into the United States, or by use of the mails, or by any means or instrumentality (including, without limitation, e-mail, facsimile transmission, telephone and the internet) of interstate or foreign commerce, or of any facility of a national securities exchange, of the United States and neither the Exchange Offers nor the Tender Offers can be accepted by any such use, means, instrumentality or facility or from within the United States.

These materials do not constitute or form a part of any offer or solicitation to purchase or subscribe for securities in the United States. The New Notes mentioned herein have not been, and will not be, registered under the United States Securities Act of 1933 (the 'Securities Act'). The New Notes may not be offered or sold in the United States except pursuant to an exemption from the registration requirements of the Securities Act. There will be no public offer of securities in the United States.

Italy

This announcement, the Exchange Offers and the Tender Offers are not being made, directly or indirectly, in the Republic of Italy (Italy). The Exchange Offers and Exchange Offer Memorandum and the Tender Offers and Tender Offer Memorandum have not been submitted to the clearance procedures of the Commissione Nazionale per le Società e la Borsa (CONSOB) pursuant to Italian laws and regulations.  Accordingly, Holders are notified that, to the extent such holders are located or resident in Italy, the Exchange Offers and Tender Offers are not available to them and they may not offer Existing Notes for exchange pursuant to the Exchange Offers or tender Existing Notes pursuant to the Tender Offers nor may the New Notes be offered, sold or delivered in Italy and, as such, any Exchange Instruction or Tender Instruction received from or on behalf of such persons shall be ineffective and void, and neither the Exchange Offer Memorandum, the Tender Offer Memorandum nor any other documents or materials relating to the Exchange Offers, the Tender Offers, the Existing Notes or the New Notes may be distributed or made available in Italy.

United Kingdom

The communication of this announcement, the Exchange Offer Memorandum, the Tender Offer Memorandum and any other documents or materials relating to the Exchange Offers or the Tender Offers is not being made and such documents and/or materials have not been approved by an authorised person for the purposes of section 21 of the Financial Services and Markets Act 2000. Accordingly, such documents and/or materials are not being distributed to, and must not be passed on to, the general public in the United Kingdom. The communication of such documents and/or materials as a financial promotion is only being made to those persons in the United Kingdom falling within the definition of investment professionals (as defined in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the 'Financial Promotion Order')) or persons who are within Article 43 of the Financial Promotion Order or any other persons to whom it may otherwise lawfully be made under the Financial Promotion Order.

Other

The Exchange Offers and the Tender Offers are subject to further offer and distribution restrictions in, amongst other countries, Belgium, France and Switzerland as more fully set out in the Exchange Offer Memorandum and the Tender Offer Memorandum. The distribution of this announcement in those jurisdictions is restricted by the laws of such jurisdictions. No action has been or will be taken in any jurisdiction in relation to the Exchange Offers that would permit a public offering of securities other than in Switzerland.

 

END

 

 

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