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Danske Bank — Capital/Financing Update 2013
Sep 18, 2013
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Download source fileCompany announcement Group Communications
Announcement No. 19/2013 Holmens Kanal 2 – 12
1092 København K
Phone +45 45 14 56 95
18 September 2013
Danske Bank A/S announces Tender Offer for its
USD 1,000,000,000 Subordinated Fixed Rate Resettable Notes due 2037
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
Danske Bank A/S (the “Bank”) announces today its invitation to holders of its
USD 1,000,000,000 Subordinated Fixed Rate Resettable Notes due 2037 (ISIN:
XS0831342679) (the “Notes”) to tender any and all of their Notes for purchase
by the Bank for cash (the “Offer”). The Offer is being made on the terms and
subject to the conditions contained in the tender offer memorandum dated 18
September 2013 (the “Tender Offer Memorandum”) prepared by the Bank, copies of
which are (subject to distribution restrictions) available from Lucid Issuer
Services Limited (the “Tender Agent”).
Target Securities
Description ISIN / Outstand Purchase Amount
of the Notes Common Code ing Price subject
Nominal to the
Amount Offer
--------------------------------------------------------------------------------
USD 1,000,000,000 Subordinated XS083134267 USD 101.50 per Any and
Fixed Rate Resettable Notes due 9 / 1,000,00 cent. all
2037 of Danske Bank A/S 083134267 0,000 (plus
accrued
interest)
Rationale for the Offer
On 16 July 2013, Standard & Poor’s Credit Market Services Europe Limited
(“S&P”) published its revised bank hybrid methodology, which resulted in the
reclassification of the equity content assigned by S&P to the Notes to
“minimal” from “intermediate”. Consequently, the Notes will no longer be
eligible for inclusion in the Bank’s Risk Adjusted Capital (“RAC”) ratio in
accordance with S&P’s bank hybrid methodology.
At the time of issuance, the Notes had been designed for the specific purpose
of improving the Bank’s RAC ratio and certain features, which went beyond the
relevant regulatory requirements, were therefore specifically incorporated to
address S&P’s requirements. The inclusion of such features impacted the
pricing of the Notes, resulting in a higher cost compared with a conventional
Tier 2 issue.
On 17 July 2013, the Bank announced that it was considering potential options
in response to the change to S&P’s methodology change described above. As
provided for in Condition 8.8(ii) of the terms and conditions of the Notes, the
Bank has decided to vary such terms and conditions to permit an optional
redemption of the Notes prior to the fifth anniversary of the issue date, as a
result of the occurrence of a “Rating Methodology Event” (as defined in the
terms and conditions of the Notes). Due to the elimination of equity content
assigned by S&P to the Notes, once such variation becomes effective, the Bank
intends to call the Notes pursuant to such early redemption right.
In light of this decision, the Bank has decided to launch the Offer pursuant to
which Noteholders are invited, on the terms and subject to the conditions
contained in the Tender Offer Memorandum, to tender their Notes at a Purchase
Price of 101.50 per cent. of the nominal amount of the Notes, together with
accrued interest. The Bank expects to exercise its right to call any Notes
that remain outstanding following the settlement of the Offer at the redemption
price of 100 per cent. of the nominal amount of the Notes, with the relevant
early redemption date expected to occur on or around 18 November 2013.
The Bank’s ratings are not expected to be affected by any such repurchase or
redemption of the Notes as the Bank’s capital remains adequate, as reported by
S&P on 16 July 2013.
Noteholders are advised to read carefully the Tender Offer Memorandum for full
details of, and information on the procedures for, participating in the Offer.
Noteholders may contact the Tender Agent to obtain a copy of the Tender Offer
Memorandum.
Tender Agent
Lucid Issuer Services Limited
Leroy House
436 Essex Road
London N1 3QP
Telephone: +44 20 7704 0880
Attention: David Shilson
Email: [email protected]
Press related questions:
Steen Blaafalk, Group Treasurer
+ 45 45 14 63 60
THE DISTRIBUTION OF THIS ANNOUNCEMENT IN CERTAIN JURISDICTIONS MAY BE RESTRICTED
BY LAW. PERSONS INTO WHOSE POSSESSION THIS ANNOUNCEMENT AND/OR THE TENDER
OFFER MEMORANDUM COMES ARE REQUIRED TO INFORM THEMSELVES ABOUT, AND TO OBSERVE,
ANY SUCH RESTRICTIONS. THIS ANNOUNCEMENT DOES NOT CONSTITUTE AN OFFER TO BUY
OR A SOLICITATION OF AN OFFER TO SELL THE NOTES. NOTEHOLDERS ARE ADVISED TO
READ CAREFULLY THE TENDER OFFER MEMORANDUM FOR FULL DETAILS OF, AND INFORMATION
ON THE PROCEDURES FOR, PARTICIPATING IN THE OFFER.