Fortis takes next step in financing the acquisition of certain ABN
AMRO assets - Offering of Convertible And Subordinated Hybrid
Equity-linked Securities ("CASHES")
THIS ANNOUNCEMENT IS NOT FOR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN
OR INTO THE UNITED STATES, SOUTH AFRICA, CANADA, AUSTRALIA OR JAPAN
OR IN ANY OTHER JURISDICTION IN WHICH OFFERS OR SALES WOULD BE
PROHIBITED BY APPLICABLE LAW
As part of its plan to finance the acquisition of certain ABN AMRO
assets, Fortis announces today that it intends to make an offering of
Convertible And Subordinated Hybrid Equity-linked Securities
("CASHES") of up to EUR 2.5 billion (subject to an increase option of
up to an additional EUR 500 million). The bookbuilding will take
place in the course of today.
"This capital raising is an important further step in the financing
of the acquisition of certain ABN AMRO businesses", explains Fortis
CFO Gilbert Mittler. "It will complete the equity and equity-linked
components of Fortis' acquisition financing plan and will
substantially address Core Tier 1 issuance requirements".
The CASHES are undated and are expected to carry a cash coupon of 3
month EURIBOR +1.75% to +2.50%, payable quarterly in arrears. The
exchange price will be set at 30% to 35% above the result of the
weighted average of the VWAP of the Fortis shares from launch to
close of trading on Euronext Amsterdam and Euronext Brussels on the
Pricing Date.
The CASHES will be issued by Fortis Bank nv-sa, with Fortis Bank
nv-sa, Fortis SA/NV and Fortis N.V. acting as joint and several
Co-obligors.
At any time from 40 days after the issue date, holders of the CASHES
will be able to exchange the CASHES for fully paid ordinary Fortis
shares at the Exchange Price. Furthermore, all outstanding CASHES
will be automatically exchanged into Fortis shares if, at any time
after the seventh anniversary of the issue date, the Fortis shares
trade at or above the Automatic Exchange Price Level for 20
consecutive trading days. The Automatic Exchange Price Level is equal
to 150% of the Exchange Price.
Newly issued Fortis shares will be pledged in favour of the holders
of CASHES (the "Underlying Shares"). The Underlying shares will,
until exchange, not have dividend entitlement or voting rights.
As a result of the transaction, Core Tier 1 capital will increase by
an amount equal to the CASHES on the level of both Fortis Group and
Fortis Bank. Coupons relating to CASHES will rank junior to any
indebtedness or obligation, including any preference shares, of the
Co-obligors, pari passu with the undated outstanding Floating Rate
Equity-linked Subordinated Hybrid ("FRESH") Capital Securities and
the Mandatory Convertible Securities ("MCS") to be issued on December
7, 2007, and senior to any ordinary shares of the Co-obligors,
including the Fortis shares. The sole recourse of the holders of
CASHES against any of the Co-obligors with respect to the principal
amount of the CASHES shall be to the Underlying Shares.
Application will be made to list the CASHES on the Euro MTF market of
the Luxembourg Stock Exchange and Fortis SA/NV and Fortis N.V. intend
to list the Underlying Shares on Euronext Brussels and Euronext
Amsterdam.
The Offering is expected to price today and closing of the
transaction is expected to be on or about December 18, 2007.
Merrill Lynch International and JPMorgan are acting as Joint Global
Co-ordinators and Joint Bookrunners, Fortis Bank is acting as Joint
Global Co-ordinator and Co-Bookrunner and Fox-Pitt Kelton Cochran
Caronia Waller and Santander Investment are acting as Co-Lead
Managers in the offering.
Fortis is an international financial services provider engaged in
banking and insurance. We offer our personal, business and
institutional customers a comprehensive package of products and
services through our own channels, in collaboration with
intermediaries and through other distribution partners. With a market
capitalisation of ¤48.5 billion (31 October 2007), Fortis ranks among
the 15 largest financial institutions in Europe. Our sound solvency
position, our presence in over 50 countries and our dedicated,
professional workforce of 60,000 enable us to combine global strength
with local flexibility and provide our clients with optimum support.
More information is available at www.fortis.com.
Press Contacts:
Brussels: +32 (0)2 565 35 84 Utrecht: +31 (0)30 226 32 19
Investor Relations:
Brussels: +32 (0)2 565 53 78 Utrecht: +31 (0)30 226 65 66
Merrill Lynch International
Rupert Hume-Kendall +44 20 7628 1000
Jim O'Neil
Keyvan Zolfaghari
JPMorgan
Luis Vaz-Pinto +44 20 7325 9087
Fortis Bank
Maurits van der Eerden +31 20 527 26 40
Fox-Pitt Kelton Cochran Caronia Waller
Nigel Morris-Jones +44 20 7663 6000
Oliver Hearsey
THIS ANNOUNCEMENT IS NOT FOR DISTRIBUTION, DIRECTLY OR INDIRECTLY IN
OR INTO THE UNITED STATES (AS DEFINED IN REGULATION S UNDER THE US
SECURITIES ACT OF 1933, AS AMENDED ("REGULATION S"). THIS
ANNOUNCEMENT IS NOT AN OFFER TO SELL SECURITIES OR THE SOLICITATION
OF ANY OFFER TO BUY SECURITIES, NOR SHALL THERE BE ANY OFFER OF
SECURITIES IN ANY JURISDICTION IN WHICH SUCH OFFER OR SALE WOULD BE
UNLAWFUL. THE SECURITIES MENTIONED IN THIS ANNOUNCEMENT HAVE NOT BEEN
AND WILL NOT BE REGISTERED IN THE UNITED STATES UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE OFFERED OR
SOLD IN THE UNITED STATES ABSENT REGISTRATION OR EXEMPTION FROM
REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED. THERE WILL BE NO PUBLIC OFFER OF THE SECURITIES IN THE
UNITED STATES.
THIS ANNOUNCEMENT IS DIRECTED AT AND IS ONLY BEING DISTRIBUTED IN THE
UNITED KINGDOM TO (I) PERSONS WHO HAVE PROFESSIONAL EXPERIENCE IN
MATTERS RELATING TO INVESTMENTS FALLING WITHIN ARTICLE 19(5) OF THE
FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER
2005 (THE "ORDER"), (II) HIGH NET WORTH ENTITIES, AND OTHER PERSONS
TO WHOM IT MAY OTHERWISE LAWFULLY BE COMMUNICATED FALLING WITHIN
ARTICLE 49 OF THE ORDER, AND (III) PERSONS TO WHOM IT MAY OTHERWISE
LAWFULLY BE COMMUNICATED (ALL SUCH PERSONS TOGETHER BEING REFERRED TO
AS "RELEVANT PERSONS"). THIS COMMUNICATION MUST NOT BE READ, ACTED ON
OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. ANY INVESTMENT
OR INVESTMENT ACTIVITY TO WHICH THIS ANNOUNCEMENT RELATES IS
AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH
RELEVANT PERSONS. BY READING THIS ANNOUNCEMENT, THE READER
ACKNOWLEDGES THAT IT IS A PERSON EITHER (I) OUTSIDE THE UNITED
KINGDOM OR (II) FALLING WITHIN ONE OF THE FOREGOING CATEGORIES.
IN MEMBER STATES OF THE EUROPEAN ECONOMIC AREA ("EEA"), THIS
ANNOUNCEMENT AND ANY OFFER IF MADE SUBSEQUENTLY IS DIRECTED ONLY AT
PERSONS WHO ARE "QUALIFIED INVESTORS" WITHIN THE MEANING OF ARTICLE
2(1)(E) OF THE DIRECTIVE 2003/71/EC (THE "PROSPECTUS DIRECTIVE")
("QUALIFIED INVESTORS"). ANY PERSON IN THE EEA WHO ACQUIRES THE
SECURITIES IN ANY OFFER (AN "INVESTOR") OR TO WHOM ANY OFFER OF THE
SECURITIES IS MADE WILL BE DEEMED TO HAVE REPRESENTED AND AGREED THAT
IT IS A QUALIFIED INVESTOR.
THIS ANNOUNCEMENT IS A SUMMARY ONLY, AND DOES NOT PURPORT TO IDENTIFY
OR SUGGEST THE RISKS (DIRECT OR INDIRECT) WHICH MAY BE ASSOCIATED
WITH YOUR INVESTMENT IN THE CASHES.
THE BOOKRUNNERS ARE ACTING FOR THE CO-OBLIGORS IN CONNECTION WITH THE
OFFERING, AND FOR NO-ONE ELSE AND WILL NOT BE RESPONSIBLE TO ANYONE
OTHER THAN THE CO-OBLIGORS FOR PROVIDING THE PROTECTIONS AFFORDED TO
CLIENTS OF THE BOOKRUNNERS OR FOR PROVIDING ADVICE IN RELATION TO THE
OFFERING, AND THE BOOKRUNNERS MAKE NO REPRESENTATIONS AS TO THE
ACCURACY OF AND TAKE NO RESPONSIBILITY FOR THE CONTENTS OF THIS
ANNOUNCEMENT OR ANY MATTERS REFERRED TO HEREIN.
THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND IS NOT TO BE
RELIED UPON IN SUBSTITUTION FOR THE EXERCISE OF INDEPENDENT
JUDGEMENT. IT IS NOT INTENDED AS INVESTMENT ADVICE AND UNDER NO
CIRCUMSTANCES IS IT TO BE USED OR CONSIDERED AS AN OFFER TO SELL, OR
A SOLICITATION OF AN OFFER TO BUY ANY CASHES OR A RECOMMENDATION TO
BUY OR SELL ANY CASHES. NEITHER THE BOOKRUNNERS NOR ANY OF THEIR
RESPECTIVE AFFILIATES ACCEPTS ANY LIABILITY ARISING FROM THE USE OF
OR MAKES ANY REPRESENTATION AS TO THE ACCURACY OR COMPLETENESS OF
THIS ANNOUNCEMENT.
EACH PERSON READING THIS ANNOUNCEMENT SHOULD CONSULT HIS/HER
PROFESSIONAL ADVISER TO ASCERTAIN THE SUITABILITY OF THE CASHES AS AN
INVESTMENT. IN ADDITION, HAVING READ THIS ANNOUNCEMENT, EACH
PROSPECTIVE INVESTOR SHOULD PROCEED ON THE ASSUMPTION THAT IT MUST
BEAR THE ECONOMIC RISK OF AN INVESTMENT IN THE CASHES FOR AN
INDEFINITE PERIOD. NONE OF THE CO-OBLIGORS NOR THE BOOKRUNNERS MAKES
ANY REPRESENTATION AS TO (I) THE SUITABILITY OF THE CASHES FOR ANY
PARTICULAR INVESTOR, (II) THE APPROPRIATE ACCOUNTING TREATMENT AND
POTENTIAL TAX CONSEQUENCES OF INVESTING IN THE CASHES OR (III) THE
FUTURE PERFORMANCE OF THE CASHES EITHER IN ABSOLUTE TERMS OR RELATIVE
TO COMPETING INVESTMENTS.
IN CONNECTION WITH THE OFFERING, THE BOOKRUNNERS AND THEIR RESPECTIVE
AFFILIATES MAY, FOR THEIR OWN ACCOUNT, ENTER INTO ASSET SWAPS, CREDIT
DERIVATIVES OR OTHER DERIVATIVE TRANSACTIONS RELATING TO THE CASHES
AND/OR THE UNDERLYING SHARES AT THE SAME TIME AS THE OFFER AND SALE
OF THE CASHES OR IN SECONDARY MARKET TRANSACTIONS. EACH OF THE
BOOKRUNNERS OR ANY OF THEIR RESPECTIVE AFFILIATES MAY FROM TIME TO
TIME HOLD LONG OR SHORT POSITIONS IN OR BUY AND SELL SUCH CASHES OR
DERIVATIVES OR THE UNDERLYING SHARES. NO DISCLOSURE WILL BE MADE OF
ANY SUCH POSITIONS. THE AMOUNT OF ANY SUCH PURCHASES WILL BE
DETERMINED AT THE TIME OF PRICING OF THE CASHES AND WILL BE SUBJECT
TO TOTAL DEMAND RECEIVED AND FINAL ALLOCATIONS. IN ADDITION, EACH OF
THE BOOKRUNNERS AND THEIR RESPECTIVE AFFILIATES MAY PERFORM SERVICES
FOR, OR SOLICIT BUSINESS FROM, THE CO-OBLIGORS, MAY MAKE MARKETS IN
THE SECURITIES OF THE CO-OBLIGORS AND/OR HAVE A POSITION OR EFFECT
TRANSACTIONS IN SUCH SECURITIES.