TIDMNBS TIDMNAWI
RNS Number : 9596P
Nationwide Building Society
06 September 2017
Nationwide Building Society
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN
PART, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM THE UNITED STATES,
AUSTRALIA, CANADA, SOUTH AFRICA OR ANY OTHER JURISDICTION WHERE TO
DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH
JURISDICTION
6 September 2017
NATIONWIDE BUILDING SOCIETY ANNOUNCES OFFER OF FURTHER CORE
CAPITAL DEFERRED SHARES
Nationwide Building Society ("Nationwide" or the "Society") is
today announcing a further offer (the "Offer") of its Core Capital
Deferred Shares ("CCDS"), to be consolidated and form a single
series upon issue with its 5,500,000 CCDS issued on 6 December
2013.
Background and Rationale for Offer
In common with other financial institutions, the Society is
required by law to maintain certain levels of capital to absorb
losses. The Society's regulatory capital mainly comprises retained
profit which has been built up over many years (Nationwide has made
an annual profit for over 95 years). From time to time, this has
been supplemented by issuing capital instruments to external
investors, including permanent interest bearing shares ("PIBS"),
additional tier 1 instruments, tier 2 instruments and, in 2013, the
existing CCDS. CCDS constitute Common Equity Tier 1 ("CET1")
capital - the highest quality form of capital available to building
societies.
Nationwide's capital position is stable and the Society is well
capitalised, both in absolute terms and relative to current and
foreseeable requirements. The Society's reasons for proposing to
issue further CCDS at this time are to re-affirm the relevance to
the Society of CCDS, to demonstrate its continued access to
inorganic CET1 capital and to seek to increase the liquidity of its
CCDS. It does not indicate any intention to enter into any
acquisition, merger or similar transaction. Whilst Nationwide does
not need to issue the further CCDS to meet its regulatory capital
requirements, the issuance will further bolster the Society's CET1
capital, helping to support its strategic growth ambitions and to
maintain its capital at prudent levels having regard to its present
and anticipated future capital requirements.
Mark Rennison, Nationwide's Chief Financial Officer, said:
"Nationwide's capital position remains well in excess of
regulatory requirements with a common equity tier 1 ratio of 25.4
per cent. and a UK leverage ratio of 4.4 per cent. as at 4 April
2017. The Board believes the Society is well capitalised to
continue to deliver its strategy over the short, medium and long
term.
"As a building society, the main component of our core capital
is, and will remain, retained earnings built up over many years.
However, CCDS are strategically important for Nationwide as they
provide an additional source of capital to support the Society's
long term strategic growth and provide safety and security for our
members' money. Given current market conditions, we believe now is
a good time to offer these further CCDS as part of our strategy
both to maintain broad access to capital markets and also to
develop capacity and liquidity in the CCDS market specifically.
This is particularly relevant given that Nationwide has been the
only issuer of CCDS since they were introduced in 2013 as an
additional source of capital for building societies."
Key highlights of the Offer
-- Issuer: Nationwide Building Society
-- Instrument: fully paid up, irredeemable CCDS
-- Offer size: Nationwide is targeting an issue of up to
approximately 5,000,000 further CCDS (assuming no exercise of the
over-allotment option)
-- Over-allotment option: up to 15%
-- Consolidation with existing CCDS: the further CCDS will upon
issue be consolidated and form a single series with the Society's
5,500,000 existing CCDS
-- Minimum investment: investors wishing to participate in the
Offer will be required to invest a minimum total consideration of
approximately GBP200,000
-- Minimum transfer amount (relevant to secondary trading): 250 CCDS
-- Maturity date: perpetual
-- Status: most junior investment in the Society, ranking junior
to all creditors, including subordinated creditors and the holders
of the Society's additional tier 1 securities and PIBS. Claim in a
winding-up is for a capped share of surplus assets (if any),
calculated by reference to specific formulae under the terms of the
CCDS
-- Regulatory treatment: CET1 capital
-- Distributions: fully discretionary, non-cumulative and capped
in accordance with the Rules of the Society. The prevailing Cap,
applicable in respect of the financial year to 4 April 2017, is
GBP15.67, and such cap is adjusted for inflation by reference to
the UK CPI each year
-- Distribution payment dates: 20 December in the case of any
interim distribution and 20 June in the case of any final
distribution or, if either such date is not a business day, on the
immediately following business day
-- Entitlement to distributions: the first potential
distribution payment date following the Offer is 20 December 2017.
If the Society elects to declare an interim distribution on the
CCDS for payment in December 2017, investors in the further CCDS
will (provided they continue to hold their further CCDS at close of
business on the relevant record date) be entitled to receive such
distribution in full
-- Distribution Policy: the Board of the Society maintains a
distribution policy outlining its expectations for future interim
and final distributions in GBP per CCDS. The full distribution
policy is available on the Society's website. Taking into account
the policy, the Board is currently targeting an interim
distribution of GBP5.125 per CCDS for payment in December 2017 and
a final distribution of GBP5.125 per CCDS for payment in June 2018.
Distributions are discretionary, and the Board is entitled to amend
its distribution policy, or depart from it, at any time. However,
the Society intends to maintain a stable distribution policy,
subject to such factors as the Board deems relevant, including (but
not limited to) factors specified in the published distribution
policy
-- Member Voting Rights: single vote at general meetings ('one
member one vote'). The member vote will be attributable to the
nominee of the Clearing Systems (as registered holder), and the
nominee has confirmed to the Society that it does not intend to
exercise its vote
-- Residual claim in liquidation: claim per CCDS on the surplus
assets of the Society upon its liquidation or dissolution is capped
at the lesser of (a) the Core Capital Contribution Share and (b)
the Average Principal Amount (see the terms of the CCDS)
-- Listing: Standard Equity Listing on the London Stock Exchange
and subject to the rules of the Exchange and trading restriction on
outright short positions as applicable consequent on such a
listing
-- Lock-up: the Society has agreed to certain lock-up
arrangements, including not to, for a period of 45 days following
Admission, issue or dispose of any CCDS
The Offer, which is being made on a non-pre-emptive basis, will
be made available to certain institutional and professional
investors in the United Kingdom and elsewhere outside the United
States in reliance on Regulation S under the US Securities Act of
1933, and is subject to offer and distribution restrictions (see
"Offer and Distribution Restrictions" below). Allocations will be
made in accordance with customary allocation processes and
procedures and in accordance with applicable law and regulation.
Final allocations under the Offer will be determined by the Society
having regard to a range of factors, including, inter alia, the
level and nature of demand for the further CCDS in the Offer and
the objective of continuing an orderly and liquid after-market in
the CCDS. In addition, in making any final determination of
allocations in respect of the further CCDS, the Society shall be
entitled (but not obliged) to take into account any current holding
of existing CCDS by investors who express an interest in purchasing
further CCDS pursuant to the Offer.
The issue price of the further CCDS will be determined following
a book-building exercise currently expected to conclude tomorrow.
In order to assist prospective investors in their assessment of the
Offer, the issue price of the further CCDS will be exclusive of any
amount attributable to potential future distributions and, in line
with market convention for secondary market trading, the final
price payable by investors will also include an amount attributable
to potential future distributions. However, investors should note
that the CCDS are CET1 instruments and the Society has full
discretion whether or not to declare distributions (in contrast to
interest on a debt instrument, there is no actual accrual of
distributions on CCDS). Whilst, under its distribution policy, the
Board is currently targeting an interim distribution of GBP5.125
per CCDS for payment in December 2017, the foregoing is not, and
should not be construed as, a commitment to do so, and the Board
shall be entitled, in its sole and absolute discretion, not to
declare any such distribution.
Next steps and Expected Timetable
The Society currently expects to issue further CCDS in
accordance with the timetable below, subject to market
conditions.
Application will be made to the UK Listing Authority for the
further CCDS to be admitted to the standard listing segment of the
Official List, and to the London Stock Exchange plc for the further
CCDS to be admitted to trading on the London Stock Exchange plc's
main market for listed securities ("Admission"). It is currently
expected that Admission of, and commencement of dealings in, the
CCDS will occur in accordance with the timetable below.
The expected timetable below is indicative only and subject to
change.
Launch and book-build in connection with the Offer 6 September 2017
Allocations of further CCDS 7 September 2017
Publication of Prospectus 11 September 2017
Euroclear/Clearstream accounts credited on or after 14 September 2017 (and no later than 21
September 2017)
Admission and commencement of dealings in the further 8.00 a.m. on or after 14 September 2017 (and no later
CCDS than 21 September 2017)
Recalculated Average Principal Amount and Core Capital As soon as reasonably practicable after settlement
Contribution Proportion published on
Nationwide's website
Inside Information Notice
This announcement is released by Nationwide Building Society and
contains information that qualified or may have qualified as inside
information for the purposes of Article 7 of the Market Abuse
Regulation (EU) 596/2014 ("MAR"). For the purposes of MAR and
Article 2 of Commission Implementing Regulation (EU) 2016/1055,
this announcement is made by Alex Wall, Head of Capital, Ratings
& Investor Relations of Nationwide Building Society.
____
For further information, please contact:
Media:
Sara Batchelor
Telephone: +44 (0) 1793 657770 / +44 (0) 7785 344137
Email: sara.batchelor@nationwide.co.uk
Nick Burns-Howell
Telephone: +44 (0) 1793 658518 / +44 (0) 7725 680890
Email: nicholas.burns-howell@nationwide.co.uk
Investor relations:
Alex Wall
Head of Capital, Ratings & Investor Relations
Telephone: +44 (0) 20 7261 6568
Nationwide Building Society
One Threadneedle Street
London EC2R 8AW
NOTES TO EDITORS
About Nationwide
Nationwide is the UK's largest building society, with total
assets of GBP222 billion as at 4 April 2017 - greater than 140 per
cent. of the combined size of the rest of the UK building society
sector. It is also the UK's second largest provider of mortgages
and the third largest provider of savings. The core business of
Nationwide is providing personal financial services, including
residential mortgage loans and personal unsecured lending; retail
savings; general retail banking services; personal investment
products; and insurance. In addition, Nationwide maintains an
investment portfolio of debt securities for its own account.
DISCLAIMER - INTED ADDRESSEES
Important Notice
This announcement is an advertisement and not a prospectus.
Investors should not purchase or subscribe for any transferable
securities referred to in this announcement except on the basis of
information contained in the Prospectus expected to be dated and
published on or around 11 September 2017 and to be published by
Nationwide in connection with the Admission of the further CCDS.
Copies of the Prospectus will, once published, be available from
the Regulatory News Service (RNS) maintained by the London Stock
Exchange.
Forward looking Statements
Certain information contained in this announcement or the
Prospectus, including any information as to Nationwide's strategy,
plans or future financial or operating performance constitute
"forward-looking statements". These forward-looking statements can
be identified by the use of forward-looking terminology, including
the terms "believes", "estimates", "anticipates", "projects",
"expects", "intends", "aims", "plans", "predicts", "may", "will",
"seeks" or "should" or, in each case, their negative or other
variations or comparable terminology, or by discussions of
strategy, plans, objectives, goals, future events or intentions.
These forward-looking statements include all matters that are not
historical facts. They may appear in a number of places throughout
this announcement or the Prospectus and include statements
regarding the intentions, beliefs or current expectations of the
directors of the Society (the "Directors") concerning, amongst
other things: Nationwide's results of operations, financial
condition, prospects, growth, strategies and the industry in which
Nationwide operates.
By their nature, forward-looking statements involve risks and
uncertainties because they relate to events and depend on
circumstances that may or may not occur in the future.
Forward-looking statements are not guarantees of future
performance. Nationwide's actual results of operations, financial
condition, and the development of the financial services industry
in which Nationwide operates, may differ materially from those
suggested by the forward-looking statements contained in this
announcement. In addition, even if Nationwide's results of
operations, financial condition, and the development of the
financial services industry are consistent with the forward-looking
statements contained in this announcement or the Prospectus, those
results or developments may not be indicative of results or
developments in subsequent periods.
Forward-looking statements and other statements regarding
matters that are not historical facts involve predictions. No
assurance can be given that such future results will be achieved;
actual events or results may differ materially as a result of risks
and uncertainties facing Nationwide. In light of these risks,
uncertainties and assumptions, the events described in the
forward-looking statements in this announcement may not occur.
The forward-looking statements speak only as of the date of the
relevant document. Barclays Bank PLC ("Barclays"), Citigroup Global
Markets Limited ("Citigroup"), J.P. Morgan Securities Plc ("J.P.
Morgan"), Merrill Lynch International ("BofA Merrill Lynch") and
UBS Limited ("UBS" and, together with Barclays, Citigroup, J.P.
Morgan and BofA Merrill Lynch, the "Joint Bookrunners") and BNP
Paribas and The Royal Bank of Scotland plc (trading as NatWest
Markets) (together with the Joint Bookrunners, the "Banks"), which
have been appointed as managers in respect of the Offer, the
Society and the Directors expressly disclaim any obligation or
undertaking to update or revise publicly any forward-looking
statements, whether as a result of new information, future events
or otherwise, unless required to do so by applicable law, the
Prospectus Rules, the Listing Rules, or the Disclosure and
Transparency Rules of the Financial Conduct Authority ("FCA"). All
subsequent written and oral forward-looking statements attributable
to the Nationwide or individuals acting on behalf of the Nationwide
are expressly qualified in their entirety by this paragraph.
Offer and Distribution Restrictions
General: Neither this announcement, the publication in which it
is contained nor any copy of it may be taken, transmitted or
distributed, directly or indirectly, into the United States, the
United Kingdom, Canada, Australia, Hong Kong, Singapore,
Switzerland, Japan, Jersey or Guernsey or to any persons in any of
those jurisdictions or any other jurisdictions, in each case where
to do so would constitute a violation of the relevant laws of such
jurisdiction. The securities referred to herein have not been and
will not be registered under the applicable securities laws of any
such jurisdiction and, subject to certain exceptions, may not be
offered or sold within, or to any national, resident or citizen of,
any such jurisdiction.
This announcement does not constitute or form part of any offer
or invitation to sell or issue, or any solicitation of any offer to
purchase or subscribe for any CCDS or any other securities nor
shall it (or any part of it) or the fact of its distribution, form
the basis of, or be relied on in connection with, any contract
therefore. The Offer of CCDS in connection with the Prospectus and
the distribution of this announcement and other information in
connection with the admission and Offer in certain jurisdictions
may be restricted by law and persons into whose possession any
document or other information referred to herein comes should
inform themselves about, and observe, any such restrictions. Any
failure to comply with these restrictions may constitute a
violation of the securities laws of any such jurisdiction. No
action has been taken or will be taken in any jurisdiction that is
intended to permit a public offering or sale of the further CCDS,
or possession or distribution of this announcement or the
Prospectus or any other offering or publicity material relating to
the further CCDS, in any country or jurisdiction where action for
that purpose is required.
United States: Neither this announcement, the publication in
which it is contained nor any copy of it may be made or transmitted
into the United States of America (including its territories or
possessions, any state of the United States of America and the
District of Columbia) (the "United States"). The securities
referred to herein have not been and will not be registered under
the applicable securities laws of the United States and, subject to
certain exceptions, may not be offered or sold within the United
States.
United Kingdom: The Offer is being made in the United Kingdom
only to certain institutional and professional investors who are
"investment professionals" for the purposes of Article 19 of the
Financial Services and Markets Act 2000 (Financial Promotion) Order
2005.
The contents of this announcement, have been approved for the
purposes of section 21(2) (b) of the Financial Services and Markets
Act 2000 (as amended) by the Society.
Restriction on marketing and sales to retail investors: the
further CCDS are not intended to be sold and should not be sold to
"retail clients" in the European Economic Area, as defined in the
rules set out in the Product Intervention (Contingent Convertible
Instruments and Mutual Society Shares) Instrument 2015 and Chapter
22.2 of the FCA's Conduct of Business Sourcebook, as amended or
replaced from time to time, other than in circumstances that do not
and will not give rise to a contravention of those rules by any
person. Neither the Society nor the Banks will offer or sell
further CCDS to retail clients, nor will the Society or any Bank at
any time take, or be required to take, any action which would
facilitate an offer or sale of any CCDS to any retail client.
Disclaimer
This announcement does not constitute, or form part of, a
recommendation concerning the Offer. The price and value of
securities can go down as well as up. Past performance is not a
guide to future performance. Information in this announcement or
any of the documents relating to the Offer cannot be relied upon as
a guide to future performance. Potential investors should consult a
professional advisor as to the suitability of the Offer for the
person concerned.
Any purchase of CCDS in the Offer should be made solely on the
basis of the information contained in the final Prospectus
published by the Society in connection with Admission. No reliance
may or should be placed by any person for any purpose whatsoever on
the information contained in this announcement or on its
completeness, accuracy or fairness. The information in this
announcement is subject to change.
The Banks, each of which (other than BNP Paribas) is authorised
by the Prudential Regulation Authority (the "PRA") and regulated by
the PRA and the FCA in the United Kingdom, are acting exclusively
for the Society and no one else in connection with the Offer and
will not regard any other person (whether a recipient or reader of
this document) as their respective clients in relation to the Offer
and will not be responsible to anyone other than the Society for
providing the protections afforded to their respective clients nor
for giving advice in relation to the Offer, the Admission or any
other matter referred to in this announcement. BNP Paribas is
authorised by the European Central Bank, the Autorité de Contrôle
Prudentiel et de Résolution and the PRA and subject to limited
regulation by the FCA and PRA.
In connection with the Offer, the Banks and any of their
respective affiliates, acting as investors for their own accounts,
may subscribe for and/or purchase CCDS, and in that capacity may
retain, purchase, sell, offer to sell or otherwise deal for their
own account in CCDS and other securities of the Society or related
investments in connection with the Offer or otherwise. Accordingly,
references in the Prospectus to the CCDS being issued, offered,
subscribed, acquired, placed or otherwise dealt in should be read
as including any issue or offer to, or subscription, acquisition,
underwriting or dealing by, any Bank and any of its affiliates
acting as an investor for its own account. The Banks do not intend
to disclose the extent of any such investment or transactions
otherwise than in accordance with any legal or regulatory
obligation to do so. In addition, certain of the Banks or their
affiliates may enter into financing arrangements (including swaps
or contracts for differences) with investors in connection with
which such Banks (or their affiliates) may from time to time
acquire, hold or dispose of CCDS. Some of the Banks and their
affiliates have engaged in, and may in the future engage in,
investment banking and other commercial dealings in the ordinary
course of business with the Society or its affiliates. They have
received, or may in the future receive, customary fees and
commissions for these transactions. In addition, in the ordinary
course of their business activities, the Banks and their affiliates
may make or hold a broad array of investments and actively trade
debt and equity securities (or related derivative securities) and
financial instruments (including bank loans) for their own account
and for the accounts of their customers. Such investments and
securities activities may involve securities and/or instruments of
the Society or its affiliates. The underwriters and their
affiliates may also make investment recommendations and/or publish
or express independent research views in respect of such securities
or financial instruments and may hold, or recommend to clients that
they acquire, long and/or short positions in such securities and
instruments.
None of the Banks or any of their respective subsidiary
undertakings, affiliates or any of their respective directors,
officers, employees, advisers, agents or any other person accepts
any responsibility or liability whatsoever for, or makes any
representation or warranty, express or implied, as to the truth,
accuracy, verification, completeness or fairness of the information
or opinions in this announcement (or whether any information has
been omitted from this announcement) or any other information
relating to the Society, its subsidiaries or associated companies,
whether written, oral or in a visual or electronic form, and
howsoever transmitted or made available or for any loss howsoever
arising from any use of this document or its contents or otherwise
arising in connection therewith or regarding the legality of any
investment in CCDS by any person under the laws applicable to such
person or for any other statement made or purported to be made by
it, or on its behalf, in connection with the Society, the Offer or
the CCDS, and nothing in this announcement is, or shall be relied
upon as, a promise or representation in this respect, whether as to
the past of the future.
To the fullest extent permissible, each of the Banks accordingly
disclaims all and any responsibility or liability whether arising
in tort, contract or otherwise (save as referred to above) which
they might otherwise have in respect of this announcement or any
such statement.
Stabilisation and Over-allotment Option
In connection with the Offer, J.P. Morgan (as "Stabilisation
Manager") (or any person acting on behalf of the Stabilisation
Manager) may over-allot CCDS or effect other transactions with a
view to supporting the market price of the CCDS at a level higher
than that which might otherwise prevail. However, stabilisation may
not necessarily occur. Any stabilisation action may begin on or
after the date on which adequate public disclosure of the Issue
Price was made and must end no later than the day falling 30
calendar days after the date of allotment of the further CCDS. Any
stabilisation action or over-allotment must be conducted by the
Stabilisation Manager (or persons acting on behalf of the
Stabilisation Manager) in accordance with all applicable laws and
rules.
In connection with the Offer, the Society has granted J.P.
Morgan as Stabilisation Manager on behalf of the Banks an option
(the "Over-allotment Option"), pursuant to which the Stabilisation
Manager is entitled to require the Society to make available
additional CCDS of up to 15 per cent. of the aggregate number of
further CCDS available in the Offer (before any exercise of the
Over-Allotment Option) to cover over-allotments, if any, made in
connection with the Offer. The Over-allotment Option will be
capable of being exercised, in whole or in part, at any time during
the period commencing on the date on which adequate public
disclosure of the issue price is made and ending on the London
business day falling immediately prior to the publication of the
Prospectus.
The contents of this announcement are not to be construed as
legal financial or tax advice. Each prospective investor should
consult his own legal adviser, financial adviser or tax adviser for
legal financial or tax advice, respectively.
Your right to access this service is conditional upon complying
with the above requirement.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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