Pension Insurance Corporation plc announces Tender Offers for its £300,000,000 6.50 per cent. Fixed Rate Subordinated Notes due 2024 and its £250,000,000 8.00 per cent. Fixed Rate Subordinated Notes due 2026

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO OR TO ANY PERSON LOCATED OR RESIDENT IN THE UNITED STATES, ITS TERRITORIES AND POSSESSIONS (INCLUDING PUERTO RICO, THE U.S. VIRGIN ISLANDS, GUAM, AMERICAN SAMOA, WAKE ISLAND AND THE NORTHERN MARIANA ISLANDS), ANY STATE OF THE UNITED STATES OR THE DISTRICT OF COLUMBIA (the United States) OR IN OR INTO OR TO ANY PERSON LOCATED OR RESIDENT IN ANY OTHER JURISDICTION WHERE OR TO WHOM IT IS UNLAWFUL TO RELEASE, PUBLISH OR DISTRIBUTE THIS ANNOUNCEMENT (SEE "OFFER AND DISTRIBUTION RESTRICTIONS" BELOW).

THIS ANNOUNCEMENT RELATES TO THE DISCLOSURE OF INFORMATION THAT QUALIFIED OR MAY HAVE QUALIFIED AS INSIDE INFORMATION WITHIN THE MEANING OF ARTICLE 7(1) OF THE MARKET ABUSE REGULATION (EU) 596/2014 AS IT FORMS PART OF UK DOMESTIC LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018 (EUWA).

8 May 2024. Pension Insurance Corporation plc (the Company) announces today separate invitations to holders of its outstanding: (i) £300,000,000 6.50 per cent. Fixed Rate Subordinated Notes due 2024 (ISIN: XS1083983376) (the 2024 Notes); and (ii) £250,000,000 8.00 per cent. Fixed Rate Subordinated Notes due 2026 (ISIN: XS1523966197) (the 2026 Notes and, together with the 2024 Notes, the Notes and each a Series) to tender any and all of their Notes for purchase by the Company for cash (each an Offer and together the Offers) subject to terms and conditions contained in the tender offer memorandum, including (without limitation) the satisfaction (or waiver) of the New Financing Condition (as defined below). The Offers are being made on the terms and subject to the conditions contained in the Tender Offer Memorandum dated 8 May 2024 (the Tender Offer Memorandum) prepared by the Company for the Offers, and are subject to the offer restrictions set out below and as more fully described in the Tender Offer Memorandum.

Copies of the Tender Offer Memorandum are (subject to distribution restrictions) available from the Tender Agent as set out below. Capitalised terms used in this announcement but not otherwise defined have the meanings given to them in the Tender Offer Memorandum.

Summary of the Offers

Rationale for the Offers

The purpose of the Offers and the planned issuance of New Notes is, amongst other things, to proactively manage the Company's expected redemption profile. The Offers also provide Noteholders with the opportunity to sell their current holdings in the Notes and to apply for priority in the allocation of the New Notes, as more fully described in the Tender Offer Memorandum.

Notes purchased by the Company pursuant to the relevant Offer(s) will be cancelled and will not be re-issued or re-sold.

Purchase Prices and Accrued Interest

In respect of each Series, the Company will, on the Settlement Date, pay for Notes of the relevant Series validly tendered and accepted by it for purchase pursuant to the relevant Offer, a cash purchase price for such Notes (in respect of such Series, the Purchase Price):

(a)        in respect of any 2024 Notes accepted for purchase pursuant to the relevant Offer, equal to 100.125 per cent. of the nominal amount of such 2024 Notes (the 2024 Notes Purchase Price); and

(b)        in respect of any 2026 Notes accepted for purchase pursuant to the relevant Offer, to be determined at or around 12.00 noon (London time) on 16 May 2024 (the 2026 Notes Pricing Time) in the manner described in the Tender Offer Memorandum by reference to the annualised sum (such annualised sum, the 2026 Notes Purchase Yield) of (i) a purchase spread of 160 bps (the 2026 Notes Purchase Spread) and (ii) the 2026 Notes Benchmark Security Rate.

The 2026 Notes Purchase Price will be determined in accordance with market convention and expressed as a percentage of the nominal amount of the 2026 Notes accepted for purchase pursuant to the relevant Offer (rounded to the nearest 0.001 per cent., with 0.0005 per cent. rounded upwards), and is intended to reflect a yield to maturity of the 2026 Notes on the Settlement Date based on the 2026 Notes Purchase Yield. Specifically, the 2026 Notes Purchase Price will equal (a) the value of all remaining payments of principal and interest on the 2026 Notes up to and including the scheduled maturity date of the 2026 Notes, discounted to the Settlement Date at a discount rate equal to the 2026 Notes Purchase Yield, minus (b) Accrued Interest for such 2026 Notes.

The Company will also pay an Accrued Interest Payment in respect of Notes accepted for purchase pursuant to the Offers.

Any and all Offers

If the Company decides to accept any validly tendered Notes for purchase pursuant to the Offers, it will accept for purchase (subject to the satisfaction or waiver of the New Financing Condition on or prior to the Settlement Date) all Notes that are validly tendered pursuant to the Offers in full with no pro rata scaling.

New Financing Condition

The Company announces today its intention to issue a new series of sterling-denominated fixed rate tier 2 notes (the New Notes) under its £3,000,000,000 Euro Medium Term Note Programme (the Programme), subject to market conditions. 

Whether the Company will purchase any Notes validly tendered in the Offers is subject, without limitation, to the successful completion (in the sole determination of the Company) of the issue of the New Notes (the New Financing Condition).

Even if the New Financing Condition is satisfied (or waived), the Company is under no obligation to accept for purchase any Notes tendered pursuant to the relevant Offer(s). The acceptance for purchase by the Company of Notes validly tendered pursuant to the relevant Offer(s) is at the sole discretion of the Company, and tenders may be rejected by the Company for any reason.

Any investment decision to purchase any New Notes should be made solely on the basis of the information contained in (i) the base prospectus dated 29 September 2023, published by the Company relating to the Programme, as supplemented by the supplement dated 3 May 2024 (together, the Programme Prospectus); and (ii) the final terms to be published by the Company relating to the New Notes, and no reliance is to be placed on any other representations other than those contained in the Programme Prospectus and the final terms to be published by the Company relating to the New Notes.

For the avoidance of doubt, the ability to purchase any New Notes is subject to all applicable securities laws and regulations in force in any relevant jurisdiction (including the jurisdiction of the relevant Noteholder and the selling restrictions set out in the Programme Prospectus). It is the sole responsibility of each Noteholder to satisfy itself that it is eligible to purchase the New Notes.

The New Notes have not been, and will not be, offered or sold in the United States. Nothing in this announcement nor the Tender Offer Memorandum constitutes an offer to sell or the solicitation of an offer to buy either the New Notes in the United States or any other jurisdiction.  Securities may not be offered, sold or delivered in the United States absent registration under, or an exemption from the registration requirements of, the United States Securities Act of 1933, as amended (the Securities Act).  The New Notes have not been, and will not be, registered under the Securities Act or the securities laws of any state or other jurisdiction of the United States and may not be offered, sold or delivered, directly or indirectly, within the United States or to, or for the account or benefit of, U.S. persons (as defined in Regulation S of the Securities Act (each a U.S. Person)).

Compliance information for the New Notes:

UK MiFIR and MiFID professionals/ECPs-only / No PRIIPs or UK PRIIPs KID - Manufacturer target market (Regulation (EU) No 600/2014 on markets in financial instruments as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018, as amended (the EUWA) (the UK MiFIR) and Directive 2014/65/EU, as amended (MiFID II)) is eligible counterparties and professional clients only (all distribution channels). No key information document (KID) under Regulation (EU) No 1286/2014 or Regulation (EU) No 1286/2014 as it forms part of the domestic law of the United Kingdom by virtue of the EUWA has been or will be prepared as the New Notes are not available to retail investors in EEA or United Kingdom.

See the Programme Prospectus and the final terms to be published relating to the New Notes for further information.

No action has been or will be taken in any jurisdiction in relation to the New Notes to permit a public offering of securities.  

Allocation of the New Notes

When considering allocation of the New Notes, the Company may give preference to those Noteholders that, prior to such allocation, have validly tendered or have given a firm intention to any Dealer Manager that they intend to tender their Notes for purchase pursuant to the relevant Offer(s). Therefore, a Noteholder that wishes to subscribe for New Notes in addition to tendering its existing Notes for purchase pursuant to the relevant Offer(s) may be eligible to receive, at the sole and absolute discretion of the Company, priority in the allocation of the New Notes, subject to the issue of the New Notes and such Noteholder making a separate application for the purchase of such New Notes to a Dealer Manager (in its capacity as a joint lead manager of the issue of the New Notes) in accordance with the standard new issue procedures of such Dealer Manager. Any such preference will, subject to the sole and absolute discretion of the Company, be applicable up to the aggregate nominal amount of Notes tendered by such Noteholder (or in respect of which such Noteholder has indicated a firm intention to tender as described above) pursuant to the relevant Offer(s). However, the Company is not obliged to allocate any New Notes to a Noteholder that has validly tendered or indicated a firm intention to tender its Notes for purchase pursuant to the relevant Offer(s) and, if any such New Notes are allocated, the nominal amount thereof may be less or more than the nominal amount of Notes tendered by such Noteholder and accepted for purchase by the Company pursuant to the relevant Offer(s). Any such allocation will also, among other factors, take into account the minimum denomination of the New Notes (being £100,000).

All allocations of the New Notes, while being considered by the Company as set out above, will be made in accordance with customary new issue allocation processes and procedures in the sole and absolute discretion of the Company. In the event that a Noteholder validly tenders Notes pursuant to the relevant Offer(s), such Notes will remain subject to such tender and the conditions of the relevant Offer(s) as set out in the Tender Offer Memorandum irrespective of whether that Noteholder receives all, part or none of any allocation of New Notes for which it has applied.

Noteholders should note that the pricing and allocation of the New Notes are expected to take place prior to the Expiration Deadline for the Offers and any Noteholder that wishes to subscribe for New Notes in addition to tendering Notes for purchase pursuant to the relevant Offer(s) should therefore provide, as soon as practicable, to any Dealer Manager any indications of a firm intention to tender Notes for purchase pursuant to the relevant Offer(s) and the quantum of Notes that it intends to tender.

General

The Offers begin on 8 May 2024 (the Launch Date) and will expire at 4.00 p.m. (London Time) on 15 May 2024 (the Expiration Deadline), unless extended, re-opened or terminated as provided in the Tender Offer Memorandum. 

In order to be eligible to receive the relevant Purchase Price, Noteholders must validly tender their Notes by the Expiration Deadline, by delivering, or arranging to have delivered on their behalf, a valid Tender Instruction that is received by the Tender Agent by the Expiration Deadline. The deadlines set by any intermediary or clearing system will be earlier than the deadlines specified above.

Tender Instructions will be irrevocable except in the limited circumstances described in the Tender Offer Memorandum. Tender Instructions must be submitted in respect of an aggregate nominal amount of at least the minimum denomination in respect of such Notes (being £100,000 in respect of each Series) and integral multiples of £1,000 thereafter.

Indicative Timetable for the Offers

Subject to applicable law and as provided in the Tender Offer Memorandum, the Company may, in its sole discretion, extend, re-open, amend, waive any condition of or terminate any of the Offers at any time, and the above times and dates are subject to the right of the Company to so extend, re-open, amend and/or terminate any Offer.

Noteholders are advised to check with any bank, securities broker or other intermediary through which they hold Notes when such intermediary would need to receive instructions from a Noteholder in order for that Noteholder to be able to participate in, or (in the limited circumstances in which revocation is permitted) revoke their instruction to participate in, the Offers before the deadlines specified above. The deadlines set by any such intermediary and each Clearing System for the submission of Tender Instructions will be earlier than the relevant deadlines specified above and in the Tender Offer Memorandum.

Unless stated otherwise, announcements in connection with the Offers will be made by the Company by (i) publication through RNS and (ii) delivery of notices to the Clearing Systems for communication to Direct Participants. Such announcements may also be found on the relevant Informa IGM Screen Insider service and be made by the issue of a press release to a Notifying News Service. Significant delays may be experienced in respect of notices delivered to the Clearing Systems and Noteholders are urged to contact the Tender Agent for the relevant announcements during the course of the Offers, the contact details for which are set out below.

Further Information

Noteholders are advised to read carefully the Tender Offer Memorandum for full details of, and information on the procedures for participating in, the Offers.

Requests for information in relation to the Offers should be directed to:

J.P. Morgan Securities plc (Tel: +44 20 7134 2468; Attention: EMEA Liability Management Group; Email: [email protected]); Lloyds Bank Corporate Markets plc (Tel: +44 20 7158 1726 / +44 20 7158 1719; Attention: Liability Management; Email: [email protected]); Merrill Lynch International (Tel: +44 20 7996 5420; Attention: Liability Management Group; Email: [email protected]); and Nomura International plc (Tel: +44 20 7103 2410 / +44 20 7103 2454; Attention: Liability Management Group; Email: [email protected]) who are acting as Dealer Managers in respect of the Offers.

Requests  for information in relation to the procedures for tendering Notes in, and for any documents or materials relating to, the Offers should be directed to:

Kroll Issuer Services Limited (Tel: +44 20 7704 0880; Attention: Owen Morris; Email: [email protected]; Offer Website: https://deals.is.kroll.com/pic) who  is acting as Tender Agent in respect of the Offers.

This announcement is made by Pension Insurance Corporation plc and contains information that qualified or may have qualified as inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the EUWA (UK MAR), encompassing information relating to the Offers described above. For the purposes of UK MAR and the Implementing Technical Standards, this announcement is made by Louise Inward, General Counsel at the Company.

LEI: M31AVDIX8NY21MAUQF46

DISCLAIMER: This announcement must be read in conjunction with the Tender Offer Memorandum. This announcement and the Tender Offer Memorandum contain important information which should be read carefully before any decision is made with respect to the Offers. Any Noteholder who is in any doubt as to the contents of this announcement and/or the Tender Offer Memorandum or the action it should take, is recommended to seek its own financial and legal advice, including as to any tax consequences, immediately from its broker, bank manager, solicitor, accountant or other independent financial, tax or legal adviser. Any individual or company whose 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 tender such Notes in the relevant Offer(s). None of the Company, the Dealer Managers or the Tender Agent or any director, officer, employee, agent or affiliate of any such person has made or will make any assessment of the merits and risks of the Offer(s) or of the impact of the Offer(s) on the interests of the Noteholders either as a class or as individuals, and none of them makes any recommendation whether Noteholders should tender Notes in the relevant Offer(s).

Offer and Distribution Restrictions

The distribution of this announcement and the Tender Offer Memorandum in certain jurisdictions may be restricted by law. Persons into whose possession this announcement and/or the Tender Offer Memorandum come(s) are required by each of the Company, the Dealer Managers and the Tender Agent to inform themselves about and to observe any such restrictions. Neither this announcement nor the Tender Offer Memorandum constitutes an offer to buy or the solicitation of an offer to sell Notes (and tenders of Notes in the relevant Offer(s) will not be accepted from Noteholders) in any circumstances in which such offer or solicitation is unlawful. In those jurisdictions where the securities, blue sky or other laws require either Offer to be made by a licensed broker or dealer and any Dealer Manager or any of its affiliates is such a licensed broker or dealer in any such jurisdiction, such Offer shall be deemed to be made on behalf of the Company by such Dealer Manager or such affiliate (as the case may be) in such jurisdiction.

No action has been or will be taken in any jurisdiction in relation to the New Notes that would permit a public offering of securities. The minimum denomination of the New Notes will be £100,000.

United States

The Offers are not being made, and will not be made, directly or indirectly, in or into, or by use of the mails of, or by any means or instrumentality of interstate or foreign commerce of, or of any facilities of a national securities exchange of, the United States. This includes, but is not limited to, facsimile transmission, electronic mail, telex, telephone, the internet and other forms of electronic communication. The Notes may not be tendered in the Offers by any such use, means, instrumentality or facility from or within the United States or by persons located or resident in the United States.  Accordingly, copies of this announcement, the Tender Offer Memorandum and any other documents or materials relating to the Offers are not being, and must not be, directly or indirectly, mailed or otherwise transmitted, distributed or forwarded (including, without limitation, by custodians, nominees or trustees) in or into the United States or to any persons located or resident in the United States.  Any purported tender of Notes in an Offer resulting directly or indirectly from a violation of these restrictions will be invalid and any purported tender of Notes made by a person located in the United States or any agent, fiduciary or other intermediary acting on a non-discretionary basis for a principal giving instructions from within the United States will be invalid and will not be accepted.

Neither this announcement nor the Tender Offer Memorandum is an offer of securities for sale in the United States or to U.S. Persons. Securities may not be offered or sold in the United States absent registration under, or an exemption from the registration requirements of, the Securities Act. The New Notes have not been, and will not be, registered under the Securities Act or the securities laws of any state or other jurisdiction of the United States, and may not be offered, sold or delivered, directly or indirectly, within the United States or to, or for the account or benefit of, U.S. Persons.

Each holder of Notes participating in either Offer will represent that it is not located in the United States and is not participating in such Offer from the United States, or it is acting on a non-discretionary basis for a principal located outside the United States that is not giving an order to participate in such Offer from the United States. For the purposes of this and the above two paragraphs, United States means the United States of America, its territories and possessions (including Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the Northern Mariana Islands), any state of the United States of America and the District of Columbia.

United Kingdom

Each of this announcement and the Tender Offer Memorandum has been issued by Pension Insurance Corporation plc which is authorised and regulated by the Financial Conduct Authority (the FCA) and the Prudential Regulation Authority. This announcement and the Tender Offer Memorandum are being distributed only to existing Noteholders, and are only addressed to such existing Noteholders in the United Kingdom where they would (if they were clients of the Company) be per se professional clients or per se eligible counterparties of the Company within the meaning of the FCA rules.  Neither this announcement nor the Tender Offer Memorandum is addressed to or directed at any persons who would be retail clients within the meaning of the FCA rules and any such persons should not act or rely on it.  Recipients of this announcement and/or the Tender Offer Memorandum should note that the Company is acting on its own account in relation to the Offers and will not be responsible to any other person for providing the protections which would be afforded to clients of the Company or for providing advice in relation to the Offers.

In addition, the communication of this announcement, the Tender Offer Memorandum and any other documents or materials relating to the 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, and may only be acted upon by, 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, as amended (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.

Italy

None of the Offers, this announcement, the Tender Offer Memorandum or any other document or materials relating to the Offers have been or will be submitted to the clearance procedures of the Commissione Nazionale per le Società e la Borsa (CONSOB) pursuant to Italian laws and regulations. Each Offer is being carried out in Italy as an exempted offer pursuant to article 101-bis, paragraph 3-bis of the Legislative Decree No. 58 of 24 February 1998, as amended (the Financial Services Act) and article 35-bis, paragraph 4 of CONSOB Regulation No. 11971 of 14 May 1999, as amended. Accordingly, Noteholders or beneficial owners of the Notes that are located in Italy can tender Notes for purchase in the Offers through authorised persons (such as investment firms, banks or financial intermediaries permitted to conduct such activities in the Republic of Italy in accordance with the Financial Services Act, CONSOB Regulation No. 20307 of 15 February 2018, as amended, and Legislative Decree No. 385 of 1 September 1993, as amended) and in compliance with any other applicable laws and regulations and with any requirements imposed by CONSOB or any other Italian authority.

Each intermediary must comply with the applicable laws and regulations concerning information duties vis-à-vis its clients in connection with the Notes or the Offers.

France

The Offers are not being made, directly or indirectly, to the public in the Republic of France (France). This announcement, the Tender Offer Memorandum and any other document or material relating to the Offers have only been and shall only be distributed in France to qualified investors as defined in Article 2(e) of Regulation (EU) 2017/1129, as amended.  Neither this announcement nor the Tender Offer Memorandum have been or will be submitted for clearance to or will be approved by the Autorité des Marchés Financiers.

Belgium

The Offers are not being made, and will not be made or advertised, directly or indirectly, to any individual in Belgium qualifying as a consumer within the meaning of Article I.1, 2° of the Belgian Code of Economic Law, as amended from time to time (a Belgian Consumer) and none of this announcement, the Tender Offer Memorandum and any other documents or materials relating to the Offers have been or shall be distributed, directly or indirectly, in Belgium to Belgian Consumers.