Offer to Purchase Senior Debt and Tier 3 Tap Issue

NOT FOR 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.

 

 

For Immediate Release

Phoenix Group Holdings

25 April 2017

 

 

Phoenix Group Holdings Announces Offer to Purchase

Sterling Senior Debt and expected Tier 3 Tap Issue

 

Phoenix Group Holdings (the "Company") announces that it is inviting eligible holders (the "Bondholders") of its £300,000,000 5.75 per cent. Bonds due 2021 (the "Bonds") (ISIN: XS1081768738) to tender their Bonds for purchase by the Company for cash (the "Offer").

 

The Company has taken significant steps in recent years to reduce the level of debt within the Phoenix Group and to simplify its corporate structure. The Company continues to look for opportunities to further diversify away from senior debt. Replacing some of the Phoenix Group's existing senior debt with subordinated debt will improve the capital position of the Company, if the Company were to be included in the Solvency II group regulatory capital calculation.

 

The Company is inviting Bondholders to tender their Bonds for purchase by the Company for cash, which provides a liquidity event and concurrent reinvestment opportunity for Bondholders.

 

Title of Bonds	ISIN	Status	Exchange Listing	Outstanding Principal Amount	Sterling Benchmark Security	Fixed Spread (basis points)	Amount subject to the Offer
£300,000,000 5.75 per cent. Bonds due 2021	XS1081768738	Senior Unsecured	London Stock Exchange	£300,000,000	1.50% U.K. Treasury Gilt due January 2021 ISIN: GB00BYY5F581	+190 bps	Any and all

 

The Offer is made on the terms and subject to the conditions contained in the tender offer memorandum dated 25 April 2017 (the "Tender Offer Memorandum", as may be amended from time to time) prepared by the Company in connection with the Offer, and is subject to the offer and distribution restrictions set out below and as more fully described in the Tender Offer Memorandum. Capitalised terms used but not otherwise defined in this announcement shall have the meanings given to them in the Tender Offer Memorandum.

 

The Company will pay for Bonds validly tendered and accepted by it for purchase pursuant to the Offer a cash purchase price expressed as a percentage of the principal amount thereof and determined by reference to the annualised sum of the Fixed Spread set forth in the table above and the Sterling Benchmark Security Rate.

The final determination of the Purchase Price in respect of the Bonds will be made in accordance with standard market convention, at or around 11:00 a.m. (London time) on the Business Day following the Expiration Deadline (the "Pricing Time").

The Company will also pay an Accrued Interest Payment in respect of Bonds accepted for purchase pursuant to the Offer, all as further described in the Tender Offer Memorandum.

The Company is not under any obligation to accept any valid tenders of Bonds pursuant to the Offer. The acceptance for purchase by the Company of Bonds validly tendered pursuant to the Offer is at the sole discretion of the Company and is subject to, and conditional upon, the satisfaction or, where applicable, waiver of a number of conditions (including, without limitation, the successful completion (in the sole determination of the Company) of the issuance by the Company (the "New Issue") of Sterling Denominated 4.125 per cent. Tier 3 Notes due 2022 to be consolidated and form a single series with the Company's existing £300,000,000 4.125 per cent. Tier 3 Notes due 2022 (the "Financing Condition"). The Company reserves the right in its sole discretion at any time to amend or waive any or all of the conditions of the Offer as set out in the Tender Offer Memorandum including, without limitation, the Financing Condition. The anticipated transaction timetable is summarised below:

Events		Times and Dates
Commencement of the Offer
Announcement of the Offer and New Issue. Tender Offer Memorandum available (subject to the offer and distribution restrictions described therein) from the Tender Agent.		25 April 2017
Expiration Deadline
Final deadline for receipt of valid Tender Instructions by the Tender Agent in order for Bondholders to be able to participate in the Offer.		4:00 p.m. (London time) on 3 May 2017
Pricing Time
Determination of the Sterling Benchmark Security Rate, and calculation of the Purchase Price for the Bonds, if the Company intends to accept the Bonds for purchase.		At or around 11:00 a.m. (London time) on 4 May 2017
Announcement of Purchase Prices and Final Tender Results
Announcement of whether the Company will accept valid tenders of Bonds pursuant to the Offer and, if so accepted, (i) the Sterling Benchmark Security Rate, (ii) the Purchase Yield, (iii) the Purchase Price for the Bonds accepted for purchase and (iv) the aggregate principal amount of the Bonds (if any) that it will accept for purchase pursuant to the Offer.		As soon as reasonably practicable after the Pricing Time
Expected Settlement Date
Subject to satisfaction of the Financing Condition, payment of the Purchase Price and Accrued Interest Payment for the Bonds validly tendered and accepted for purchase.		5 May 2017

The above times and dates are subject to the right of the Company to extend, re-open, amend, and/or terminate the Offer (subject to applicable law and as provided in the Tender Offer Memorandum). Bondholders are advised to check with any bank, securities broker or other intermediary through which they hold Bonds as to when such intermediary would need to receive instructions from a Bondholder in order for that Bondholder to be able to participate in, or (in the limited circumstances in which revocation is permitted) revoke their instruction to participate in, the Offer before the deadlines set out 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. Bondholders are advised to read carefully the Tender Offer Memorandum for full details of, and information on, the procedures for participating in, the Offer.

Phoenix Group Holdings has retained Citigroup Global Markets Limited, J.P. Morgan Securities plc, Lloyds Bank plc, Merrill Lynch International and The Royal Bank of Scotland plc (trading as NatWest Markets) to act as the Dealer Managers, and Lucid Issuer Services Limited has been retained to act as Tender Agent for the Offer.

For additional information regarding the terms of the Offer, please contact: Citigroup Global Markets Limited at Citigroup Centre, Canada Square, Canary Wharf, London E14 5LB, Attention: Liability Management Group, or by telephone at +44 (0) 20 7986 8969 or email [email protected]; J.P. Morgan Securities plc at 25 Bank Street, Canary Wharf, London E14 5JP, Attention: Liability Management, or by telephone: +44 (0) 20 7134 2468 or email [email protected]; Lloyds Bank plc at 10 Gresham Street, London EC2V 7AE, Attention: Liability Management, or by telephone at +44 (0) 20 7158 2720 and +44 (0) 20 7158 1719 or email [email protected]; Merrill Lynch International at 2 King Edward Street, London EC1A 1HQ, Attention: Liability Management Group, or by telephone at +44 20 7996 5420 or email [email protected]; and The Royal Bank of Scotland plc (trading as NatWest Markets) at 250 Bishopsgate, London EC2M 4AA, Attention: Liability Management, or by telephone at +44 20 7678 5405 or email [email protected].

Requests for documents and questions regarding procedures for participating in the Offer may be directed to Lucid Issuer Services Limited at Tankerton Works, 12 Argyle Walk, London WC1H 8HA, Attention: David Shilson / Alexander Yangaev, or by telephone at +44 (0) 20 7704 0880 or email [email protected].

 

REGULATORY INFORMATION AND DISCLAIMER

This announcement contains inside information.

The person responsible for arranging release of this announcement on behalf of the Company is Gerald Watson, Group Company Secretary.

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 Offer. If any Bondholder is in any doubt as to the action it should take, it is recommended to seek its own 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 Bonds 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 Bonds in the Offer. None of the Company, the Dealer Managers or the Tender Agent or any of their respective directors, employees or affiliates makes any recommendation whether Bondholders should tender Bonds in the Offer.

OFFER AND DISTRIBUTION RESTRICTIONS

 

Neither this announcement nor the Tender Offer Memorandum constitutes an invitation to participate in the Offer in any jurisdiction in which, or to any person to or from whom, it is unlawful to make such invitation or for there to be such participation under applicable securities laws. 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 comes are required by each of the Company, the Dealer Managers and the Tender Agent to inform themselves about, and to observe, any such restrictions.

 

United States

 

The Offer is not being made, and will not be made, directly or indirectly in or into, or by use of the mail 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 Bonds may not be tendered in the Offer by any such use, means, instrumentality or facility from or within the United States or by persons located or resident in the United States as defined in Regulation S of the U.S. Securities Act of 1933, as amended (the "Securities Act"). Accordingly, copies of this announcement, the Tender Offer Memorandum and any other documents or materials relating to the Offer 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. Eligibility to participate in the Offer is not dependent on whether the Bondholder is a "U.S. person" as defined for purposes of Regulation S of the Securities Act. Any purported tender of Bonds in the Offer resulting directly or indirectly from a violation of these restrictions will be invalid and any purported tender of Bonds 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.

 

Each holder of Bonds participating in the Offer will represent that it is not located in the United States and it is not participating in the Offer from the United States or it is acting on a non-discretionary basis for a principal that is located outside the United States and that is not giving an order to participate in the Offer from the United States. For the purposes of this and the above paragraph, "United States" means 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

The communication of this announcement, the Tender Offer Memorandum and any other documents or materials relating to the Offer 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 United Kingdom 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 is only being made to and directed at persons in the United Kingdom who are Investment Professionals (as defined in Article 19(5) of the Financial Services and Markets 2000 (Financial Promotion) Order 2005 (the "Financial Promotion Order")) or 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 (such persons together being the "Relevant Persons"). The Offer is only available to Relevant Persons and the transactions contemplated herein will be available only to, or engaged in only with, Relevant Persons, and this financial promotion must not be relied or acted upon by persons other than Relevant Persons. The documents and materials relating to the Offer and their contents should not be distributed, published or reproduced (in whole or in part) or disclosed by recipients to any other person in the United Kingdom.

 

France

 

The Offer is not being made, directly or indirectly, to the public in France. None of this announcement, the Tender Offer Memorandum or any other documents or offering materials relating to the Offer have been or shall be distributed to the public in France and only (i) providers of investment services relating to portfolio management for the account of third parties (personnes fournissant le service d'investissement de gestion de portefeuille pour compte de tiers), and/or (ii) qualified investors (investisseurs qualifiés) acting for their own account, all as defined in, and in accordance with, Articles L.411-1, L.411-2 and D.411-1 of the French Code monétaire et financier, are eligible to participate in the Offer. This announcement and the Tender Offer Memorandum has not been submitted to the clearance procedures (visa) of the Autorité des marchés financiers.

 

Italy

None of this announcement, the Offer, the Tender Offer Memorandum or any other document or materials relating to the Offer have been or will be submitted to the clearance procedures of the Commissione Nazionale per le Società e la Borsa (the "CONSOB") pursuant to applicable Italian laws and regulations.

The Offer is being carried out in the Republic of Italy as an exempted offer pursuant to article 101-bis, paragraph 3-bis of Legislative Decree No. 58 of 24 February 1998, as amended (the "Consolidated Financial Services Act") and article 35-bis, paragraph 4 of CONSOB Regulation No. 11971 of 14 May 1999, as amended.

Holders or beneficial owners of the Bonds that are resident or located in the Republic of Italy can tender the Bonds for purchase 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 Consolidated Financial Services Act, CONSOB Regulation No. 16190 of 29 October 2007, as amended, and Legislative Decree No. 385 of 1 September 1993, as amended from time to time) 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 Bonds and the Offer.

Cayman Islands

The Offer is not being made, and will not be made, whether directly or indirectly, to the public in the Cayman Islands.

Certain statements in this announcement, including without limitation the anticipated consummation and successful completion of the Offer (including the satisfaction of the conditions described in the Tender Offer Memorandum), the possible amendment, extension or abandonment of the Offer, and the Company's successful execution of its funding strategy, are, or may be deemed to be, "forward-looking statements". These statements are based on management's current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from those included in these statements due to a variety of factors, including without limitation (i) the level of participation in the Offer, and (ii) the precautionary statements included in this release and in the Tender Offer Memorandum, and those contained in the Company's filings with the United Kingdom Financial Conduct Authority's National Storage Mechanism, including without limitation the "Business review" section of the Company's 2016 Annual Report.