Depfa parent to tender for three series of perpetual preferred securities

By Jennifer Chiou

New York, Jan. 14 – Depfa Bank plc parent FMS Wertmanagement AoR announced that it proposes to launch a tender offer for the following securities:

• €400 million of 6.5% guaranteed non-voting non-cumulative perpetual preferred securities issued in two series of €300 million in October 2003 and €100 million in February 2004 by Depfa Funding II LP;

• €300 million of fixed-rate/variable-rate guaranteed non-voting non-cumulative perpetual preferred securities issued in June 2005 by Depfa Funding III LP; and

• €500 million of fixed-rate/variable-rate guaranteed non-voting non-cumulative perpetual preferred securities issued in March 2007 by Depfa Funding IV LP.

Each is guaranteed by Depfa Bank.

According to a filing with the London Stock Exchange, FMS-WM has entered into a commitment agreement with certain holders of those preferreds, including about 70% of the Depfa II securities, 59% of the Depfa III securities and 66% of the Depfa IV securities. Those holders have agreed to tender their preferreds for purchase by FMS.

The holders also agreed to vote in favor of certain amendments to the terms and conditions of the preferred securities.

The release noted that the tender offer and solicitation are contingent on regulatory approval.

Certain holders and FMS have agreed that the purchase price will be €0.604509 per €1.00 liquidation preference of each Depfa II security and Depfa IV security and €0.584509 per €1.00 liquidation preference of each Depfa III security.

Those tendering their securities will be required to vote in favor of certain amendments under which holders who do not tender their preferreds will become subject to a redemption at €0.595 per €1.00 liquidation preference of each Depfa II security and Depfa IV security and €0.575 per €1.00 liquidation preference of each Depfa III security.

The company will seek tenders from holders of at least 50% of each series.

FMS said it has agreed to pay committed holders a commitment fee of €22,139,320 in aggregate due on completion of the purchase of the preferreds.

Depfa Bank is a Dublin-based subsidiary of Hypo Real Estate Holding AG.

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