Tender Offer

Principality Building Society

05 July 2023

 

THIS ANNOUNCEMENT RELATES TO THE DISCLOSURE OF INFORMATION THAT QUALIFIED OR MAY HAVE QUALIFIED AS INSIDE INFORMATION WITHIN THE MEANING OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (EU) 596/2014 AS IT FORMS PART OF UNITED KINGDOM DOMESTIC LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018, AS AMENDED (the EUWA).

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO, OR TO ANY PERSON LOCATED OR RESIDENT IN, OR AT ANY ADDRESS IN, THE UNITED STATES OF AMERICA, ITS TERRITORIES AND POSSESSIONS (INCLUDING PUERTO RICO, THE U.S. VIRGIN ISLANDS, GUAM, AMERICAN SAMOA, WAKE ISLAND AND THE NORTHERN MARIANA ISLANDS, ANY STATE OF THE UNITED STATES OF AMERICA AND THE DISTRICT OF COLUMBIA) (THE UNITED STATES) OR TO ANY U.S. PERSON (AS DEFINED IN REGULATION S OF THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE SECURITIES ACT)) OR IN OR INTO ANY JURISDICTION WHERE IT IS UNLAWFUL TO RELEASE, PUBLISH OR DISTRIBUTE THIS ANNOUNCEMENT (SEE "OFFER AND DISTRIBUTION RESTRICTIONS" BELOW).

PRINCIPALITY BUILDING SOCIETY ANNOUNCES MAXIMUM ACCEPTANCE AMOUNT FOR ITS CASH TENDER OFFER

5 July 2023. Further to its announcement dated 3 July 2023, Principality Building Society (the Offeror) announces today the Maximum Acceptance Amount for the purposes of its invitation to holders of its outstanding £300,000,000 2.375 per cent. Notes due 23 November 2023 (ISIN: XS1722899165) (the Notes) to tender their Notes for purchase by the Offeror for cash subject to the satisfaction (or waiver) of the New Issue Condition (as defined below) and the other conditions described in the Tender Offer Memorandum (as defined below) (such invitation, the Offer).

The Offer is being made on the terms and subject to the conditions contained in the tender offer memorandum dated 3 July 2023 (the Tender Offer Memorandum) prepared by the Offeror in connection with the Offer, and is subject to the offer restrictions set out below and as more fully described in the Tender Offer Memorandum. Capitalised terms used but not otherwise defined in this announcement shall have the meanings given to them in the Tender Offer Memorandum.

Noteholders are advised to read carefully the Tender Offer Memorandum - including the section "Risk Factors and other Considerations" - for full details of, and information on the procedures for participating in, the Offer.

Pricing of the New Notes and New Issue Condition

The Offeror has today priced an issue of a new series of sterling-denominated fixed rate senior non-preferred notes (the New Notes).

The Offeror has agreed to issue £300,000,000 in aggregate nominal amount of the New Notes.

The Offeror's purchase of any Notes validly tendered in the Offer is subject, without limitation, to the successful completion (in the sole determination of the Offeror) of the issue of the New Notes (the New Issue Condition).

Even if the New Issue Condition is satisfied, the Offeror is under no obligation to accept for purchase any Notes tendered pursuant to the Offer. The acceptance for purchase by the Offeror of Notes validly tendered pursuant to the Offer is at the sole discretion of the Offeror, and tenders may be rejected by the Offeror for any reason.

Maximum Acceptance Amount

Following the pricing of the New Notes, the Maximum Acceptance Amount (which is the maximum aggregate nominal amount of Notes the Offeror proposes to accept for purchase pursuant to the Offer) has been set at £300,000,000. Accordingly, if the Offeror decides to accept any Notes validly tendered for purchase pursuant to the Offer, it currently intends to accept all Notes which are so validly tendered (although the Offeror reserves the right, in its sole discretion, to accept significantly less than such amount, or to accept none of such Notes, for purchase pursuant to the Offer, as further described in the Tender Offer Memorandum). The final aggregate nominal amount of Notes (if any) accepted by the Offeror for purchase pursuant to the Offer (being the Final Acceptance Amount) is expected to be announced on 11 July 2023.

General

Any investment decision to purchase any New Notes should be made solely on the basis of the information contained in the Prospectus dated 26 April 2023 prepared by the Offeror in connection with its £1,000,000,000 (excluding Deposit Notes) Euro Medium Term Note Programme (including any amendment or supplement thereto, the Prospectus) and the final terms document to be prepared by the Offeror in connection with the issue and listing of the New Notes (the Final Terms), and no reliance is to be placed on any representations other than those contained in the Prospectus and the Final Terms.

For the avoidance of doubt, the ability to purchase New Notes is subject to all applicable securities laws and regulations in force in any relevant jurisdiction (including the jurisdiction of the Noteholder and the selling restrictions set out in the Prospectus). It is the sole responsibility of each Noteholder to satisfy itself that it is eligible to purchase the New Notes.

The New Notes are not being, and will not be, offered or sold in the United States. Nothing in this announcement or the Tender Offer Memorandum constitutes an offer to sell or the solicitation of an offer to buy the New Notes in the United States or any other jurisdiction. Securities may not be offered, sold or delivered in the United States absent registration under, or an exemption from the registration requirements of, the United States Securities Act of 1933, as amended (the Securities Act). The New Notes have not been, and will not be, registered under the Securities Act or the securities laws of any state or other jurisdiction of the United States and may not be offered, sold or delivered, directly or indirectly, within the United States or to, or for the account or benefit of, U.S. persons.

Compliance information for the New Notes: UK MiFIR professionals/ECPs-only/No UK/EU PRIIPS KID - eligible counterparties and professional clients only (all distribution channels). No sales to UK or EEA retail investors; no key information document in respect of the UK or EEA has been or will be prepared.

See the Prospectus for further information.

No action has been or will be taken in any jurisdiction in relation to the New Notes to permit a public offering of securities.

For detailed terms of the Offer please refer to the Tender Offer Memorandum which (subject to distribution restrictions) can be obtained from the Tender Agent referred to below.

Barclays Bank PLC (Telephone: [phone]; Attention: Liability Management Group; Email: [e-mail]), BNP Paribas (Telephone: [phone]; Attention: Liability Management Group; Email: [e-mail]) and Lloyds Bank Corporate Markets plc (Telephone: [phone] / 3939; Attention: Liability Management Group; Email: [e-mail]) are acting as Joint Dealer Managers for the Offer.

Kroll Issuer Services Limited (Telephone: [phone]; Attention: Jacek Kusion; Email: [e-mail]; Offer Website: https://deals.is.kroll.com/principality) is acting as Tender Agent for the Offer.

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MARKET ABUSE REGULATION: This announcement is released by Principality 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 as it forms party of United Kingdom domestic law by virtue of the EUWA (UK MAR), encompassing information relating to the Offer described above. For the purposes of UK MAR and the Implementing Technical Standards, this announcement is made by Iain Mansfield, Chief Financial Officer of Principality Building Society.

Legal Entity Identifier (LEI) of Principality Building Society: 2138003CSNVJEPFZ3U52

DISCLAIMER This announcement must be read in conjunction with the Tender Offer Memorandum. This announcement and the Tender Offer Memorandum contain important information which should be read carefully before any decision is made with respect to the Offer. If any Noteholder is in any doubt as to the contents of the Tender Offer Memorandum or the action it should take, it is recommended to seek its own financial and legal advice, including as to any tax consequences, from its broker, bank manager, solicitor, accountant or other independent financial, tax or legal adviser. Any individual or company whose Notes are held on its behalf by a broker, dealer, bank, custodian, trust company, nominee or other intermediary must contact such entity if it wishes to tender such Notes pursuant to the Offer. None of the Offeror, the Joint Dealer Managers or the Tender Agent nor any of their respective affiliates or controlling persons nor any director, officer, employee, agent or representative of any of the foregoing makes any recommendation as to whether Noteholders should tender Notes pursuant to the Offer. None of the Offeror, the Joint Dealer Managers or the Tender Agent (nor their respective affiliates or controlling persons nor any director, officer, employee, agent or representative of any of the foregoing) is providing Noteholders with any legal, business, tax or other advice in this announcement. Noteholders should consult with their own advisers as needed to assist them in making an investment decision and to advise them whether they are legally permitted to tender Notes for cash.

OFFER AND DISTRIBUTION RESTRICTIONS

General: Neither this announcement nor the Tender Offer Memorandum constitutes an offer or an invitation to participate in the Offer in any jurisdiction in which, or to any person to or from whom, it is unlawful to make such offer or invitation or for there to be such participation under applicable securities laws. The distribution of this announcement and/or the Tender Offer Memorandum in certain jurisdictions may be restricted by law.  Persons into whose possession this announcement and/or the Tender Offer Memorandum come(s) are required by each of the Offeror, the Joint Dealer Managers and the Tender Agent to inform themselves about, and to observe, any such restrictions. Nothing in this announcement or the Tender Offer Memorandum constitutes (i) an offer to buy or a solicitation of an offer to sell the Notes (and tenders of Notes in the Offer will not be accepted from any Noteholders) in any circumstances in which such offer or solicitation is unlawful or (ii) an offer to sell or a solicitation of an offer to buy the New Notes. In any jurisdiction where the securities, blue sky or other laws require the Offer to be made by a licensed broker or dealer and any of the Joint Dealer Managers or any of the Joint Dealer Managers' respective affiliates is such a licensed broker or dealer in such jurisdiction, the Offer shall be deemed to be made by such Joint Dealer Manager or such affiliate, as the case may be, on behalf of the Offeror in such jurisdiction.

No action has been or will be taken in any jurisdiction in relation to the New Notes that would permit a public offering of securities and the minimum denomination of the New Notes will be £100,000.

United States: The Offer is not being made, and will not be made, directly or indirectly in or into, or by use of the mail of, or by any means or instrumentality of interstate or foreign commerce of, or of any facilities of a national securities exchange of, the United States or to any U.S. person (as defined in Regulation S of the United States Securities Act of 1933, as amended (each a U.S. Person)). This includes, but is not limited to, facsimile transmission, electronic mail, telex, telephone, the internet and other forms of electronic communication. Accordingly, copies of this announcement and the Tender Offer Memorandum and any other documents or materials relating to the Offer are not being, and must not be, directly or indirectly mailed or otherwise transmitted, distributed or forwarded (including, without limitation, by custodians, nominees or trustees) in or into the United States, to any person located or resident in the United States or to any U.S. Person, and the Notes cannot be tendered in the Offer by any such use, means, instrumentality or facility or from within the United States or by any person located or resident in the United States or by, or by any person acting for the account or benefit of, a U.S. Person. Any purported tender of Notes in the Offer resulting directly or indirectly from a violation of these restrictions will be invalid and any purported tender of Notes made by any person located in the United States or any agent, fiduciary or other intermediary acting on a non-discretionary basis for a principal giving instructions from within the United States or by or on behalf of any U.S. Person or by use of such mails or any such means, instrumentality or facility will be invalid and will not be accepted.

Neither this announcement nor the Tender Offer Memorandum is an offer of securities for sale in the United States or to U.S. Persons. Notes may not be offered, sold or delivered in the United States absent registration under, or an exemption from the registration requirements of, the Securities Act. The New Notes have not been, and will not be, registered under the Securities Act or the securities laws of any state or other jurisdiction of the United States and may not be offered, sold or delivered, directly or indirectly, within the United States or to, or for the account or benefit of, U.S. Persons.

Each Noteholder participating in the Offer will represent that it is not a U.S. Person and is not located in the United States and is not participating in the Offer from the United States, or it is acting on a non-discretionary basis for a principal located outside the United States that is not giving an order to participate in the Offer from the United States and who is not a U.S. Person. For the purposes of this and the above two paragraphs, United States means the United States of America, its territories and possessions (including Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the Northern Mariana Islands), any state of the United States of America and the District of Columbia.

Italy: None of the Offer, this announcement, the Tender Offer Memorandum or any other document or materials relating to the Offer have been or will be submitted to the clearance procedures of the Commissione Nazionale per le Società e la Borsa (CONSOB) pursuant to Italian laws and regulations. The Offer is being carried out in the Republic of Italy (Italy) as an exempted offer pursuant to article 101-bis, paragraph 3-bis of the Legislative Decree No. 58 of 24 February 1998, as amended (the Financial Services Act) and article 35-bis, paragraph 4 of CONSOB Regulation No. 11971 of 14 May 1999, as amended. Accordingly, Noteholders or beneficial owners of the Notes that are located in Italy can tender Notes for purchase pursuant to the Offer through authorised persons (such as investment firms, banks or financial intermediaries permitted to conduct such activities in Italy in accordance with the Financial Services Act, CONSOB Regulation No. 20307 of 15 February 2018, as amended from time to time, and Legislative Decree No. 385 of 1 September 1993, as amended) and in compliance with applicable laws and regulations or with requirements imposed by CONSOB or any other Italian authority.

Each intermediary must comply with the applicable laws and regulations concerning information duties vis-à-vis its clients in connection with the Notes and/or the Offer.

The New Notes will not be offered, sold or otherwise made available to any investor in Italy.

United Kingdom: This announcement and the Tender Offer Memorandum have been issued by Principality Building Society of Principality House, The Friary, Cardiff CF10 3FA, United Kingdom which is authorised by the Prudential Regulation Authority (the PRA) of 20 Moorgate, London EC2R 6DA, United Kingdom and regulated by the Financial Conduct Authority (the FCA) of 12 Endeavour Square, London E20 1JN, United Kingdom and the PRA. This announcement and the Tender Offer Memorandum are only addressed to Noteholders where they would (if they were clients of the Offeror) be per se professional clients or per se eligible counterparties of the Offeror within the meaning of the FCA rules. This announcement and the Tender Offer Memorandum are not addressed to or directed at any persons who would be retail clients within the meaning of the FCA rules and any such persons should not act or rely on them. Recipients of this announcement and the Tender Offer Memorandum should note that the Offeror is acting on its own account in relation to the Offer and will not be responsible to any other person for providing the protections which would be afforded to clients of the Offeror or for providing advice in relation to the Offer.

In addition, this announcement, the Tender Offer Memorandum and any other documents or materials relating to the Offer are not being distributed to, and must not be passed on to, the general public in the United Kingdom. The communication of such documents and/or materials as a financial promotion is only being made to those persons in the United Kingdom falling within the definition of investment professionals (as defined in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended, the Financial Promotion Order)) or within Article 43 of the Financial Promotion Order, or to any other persons to whom it may otherwise lawfully be made under the Financial Promotion Order.

Belgium: The Offer is not being made, and will not be made or advertised, directly or indirectly, to any individual in Belgium qualifying as a consumer within the meaning of Article I.1 of the Belgian Code of Economic Law, as amended from time to time (a Belgian Consumer) and none of this announcement, the Tender Offer Memorandum or any other documents or materials relating to the Offer have been distributed, nor will they be distributed, directly or indirectly, in Belgium to Belgian Consumers.

France: This announcement, the Tender Offer Memorandum and any other document or material relating to the Offer have only been and shall only be distributed in France to qualified investors as defined in Article 2(e) of Regulation (EU) 2017/1129. Neither this announcement nor the Tender Offer Memorandum has been submitted, nor will they be submitted, for clearance to or approved by the Autorité des Marchés Financiers.

 

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