LONDON, Nov. 4, 2004 (PRIMEZONE) -- Equitable Life Assurance Society:
EQUITABLE LIFE ASSURANCE SOCIETY ("THE SOCIETY")
INVITES OFFERS TO SELL BONDS UP TO
AN AGGREGATE VALUE OF GBP260 MILLION
THE SOCIETY ANNOUNCES INVITATION TO TENDER TO HOLDERS OF GBP350,000,000 8 PER CENT UNDATED SUBORDINATED GUARANTEED BONDS OF EQUITABLE LIFE FINANCE PLC (THE "BONDS").
Summary:
- Quantum: up to a fixed amount of GBP260 million ("Invitation
Amount") and subject to minimum amount of GBP50 million ("Minimum
Amount").
- Offer Price Range: the minimum price that the Bondholder would be
willing to accept as the Purchase Price, being in the range of
GBP800 to GBP920 per GBP1,000 plus accrued interest.
- Purchase Price: strike price (minimum price within the Offer
Price Range enabling purchase of the Invitation Amount or
enabling purchase of alltendered Bonds if less than the
Invitation Amount will be expended in the purchase). Holders
whose offers are accepted will all receive the same Purchase
Price.
- Proration: if the aggregate amount of Bonds tendered at or below
the Purchase Price exceeds the Invitation Amount then the tenders
will be prorated so that the Invitation Amount is achieved.
- Duration of the Invitation: the period for submitting offers will
expire at 3.00pm London time on 6 December 2004, unless extended.
The Society is inviting the holders of Bonds in Equitable Life Finance PLC (the "Bondholders")to submit offers to sell Bonds up to an aggregate value of GBP260 million, it was announced today.
Under the "modified Dutch auction" procedure, the Society offers to buy for cash from Bondholders any or all of the Bonds held by them at a price designated by such Bondholder. The price cannot be greater than GBP920 nor less than GBP800 for every GBP1,000 in principal amount of Bonds held, together with a sum equivalent to accrued interest up to but excluding the Settlement Date, upon certain terms and conditions.
The Society will accept Bonds validly tendered (and not withdrawn) in the order of the lowest to the highest tender prices specified by tendering Bondholders within the range GBP800 to GBP920 per GBP1,000 principal amount of Bonds held. The Society will select the single lowest price so specified that will enable it to purchase Bonds at an aggregate maximum cost, excluding accrued interest, of GBP260 million, or, if less than the Invitation Amount is tendered, all Bonds validly tendered and not withdrawn, provided that the aggregate cost of Bonds, excluding accrued interest, validly tendered and not withdrawn is at least equal to GBP50 million.
The Invitation will expire at 3.00 pm London time on 6 December 2004, unless extended.
Documentation containing the detailed terms and conditions of the Invitation is being distributed today to Bondholders through the relevant clearing systems. Bondholders may also obtain copies of the documentation from Citibank N.A. as Tender Agent. This announcement is not an offer to purchase, a solicitation of an offer to purchase, or a solicitation of an offer to sell any Bonds. Offers to sell Bonds may only be made pursuant to the terms of the Invitation documentation being distributed through the relevant clearing systems.
Charles Thomson, Chief Executive of the Society, said today:
"The Society has made steady progress in stabilising its affairs which now allows the Board to make this offer to Bondholders. If we can buy back Bonds at less than their nominal value, there is an immediate improvement to the Society's overall financial position. Also, for the Bonds we buy back, we will not have to make any further interest payments. The interest payments are greater than the expected return on the assets used to fund the purchase and, therefore, buying back Bonds is an efficient use of the Society's capital.
"The continued maintenance of solvency is the Board's primary goal. The offer to purchase Bonds is in the interests of policyholders as it will generate a surplus to our Fund for Future Appropriations (FFA) - the most important measure of solvency -- and this improvement will assist the Society in withstanding the financial impact of any adverse development. If we have a positive FFA and continue to meet our liabilities as they fall due, we will remain solvent, even if we fall below the required minimum margin levels of the FSA."
Media
Charles Thomson will host separate conference calls today for the news wires and nationals/trade media as follows. The call with news wires will start at 7:30 a.m. (London time) and with the nationals/trade as at 11:00 a.m. (London time). The dial in numbers for the conference calls will be sent to journalists under separate cover.
Bondholders
Charles Thomson will also host a conference call for Bondholders at 3.00 p.m. (London time) on Wednesday 10 November 2004. Bondholders who wish to participate should contact the Tender Co-ordinator at the telephone number specified above.
This information is provided by RNS
The company news service from the London Stock Exchange