Banco de Credito del Peru prices exchange offer for 6.95% notes

By Angela McDaniels

Tacoma, Wash., Sept. 30 - Banco de Credito del Peru SA, acting through its Panamanian branch, priced the exchange offer for its $120 million of 6.95% subordinated notes due 2021, according to a company news release.

The bank is offering new dollar-denominated fixed-to-floating subordinated notes due 2026 in exchange for the existing notes. The interest rate will be 6.875% until Sept. 16, 2021, and then it will be Libor plus 770.8 basis points. The new notes will form a single series with the $350 million of notes issued for cash on Sept. 16.

Holders will receive $1,078.38 principal amount of new notes for each $1,000 principal amount of old notes exchanged. This includes an early participation premium of $30.00 for each $1,000 principal amount of notes tendered by 5 p.m. ET on Oct. 7.

The bank will also pay accrued interest up to the settlement date, less the amount of accrued interest on the new notes from Sept. 16.

The exchange ratio, 1.07838, is equal to the exchange price of the existing notes, $1,039.86, divided by the issue price of the new notes, $964.28.

Pricing was set at 2 p.m. ET on Sept. 30 by reference to the 2.125% Treasury due Aug. 15, 2021 plus a spread of 545 bps for the new notes and the 1% Treasury due Aug. 31, 2016 plus a spread of 505 bps for the existing notes.

The bank is also soliciting consents to amend the note indenture to eliminate a restriction that could otherwise prevent it from accepting more than $70 million of tendered notes. Holders who tender are deemed to have consented.

The offer and solicitation will end at midnight ET on Oct. 24.

The settlement date will be Oct. 13 for notes tendered by the early participation deadline and Oct. 25 for the remaining tendered notes.

The offer is conditioned on the new notes issued in the exchange qualifying as fungible with the outstanding fixed-to-floating notes due 2026. And if holders tender more than $70 million of the notes, the receipt of enough consents is also necessary.

The Lima, Peru, lender said that the purpose of the offer is to diversify the maturity profile of its existing debt by extending a portion of it.

D.F. King & Co., Inc. (800 549-6746) is the information and exchange agent.

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