Bradford & Bingley has achieved a near 100% take-up by investors of a tender offer for two long dated Swiss franc covered bonds and has received approval to redeem early the remaining bonds.

The nationalised UK bank yesterday (Wednesday) announced the results of a tender offer that was launched on 10 June and closed on Monday for a Sfr200m (Eu165m, £131m) 2.875% October 2031 issue and a Sfr150m 3.5% July 2027 issue.

Nearly all of the outstanding bonds were tendered: Sfr198m in the case of the 2031 bonds and Sfr109m of the 2027 bonds, of which only Sfr112m were outstanding after previous buybacks. The take-up rates were 99% and 98%, respectively.

BNP Paribas was sole dealer manager, and had set the purchase spread at 8bp through mid-swaps for the 2031 issue and 15bp through for the 2027, which provided a premium of 1.5%. The offer expired on Monday.

Bradford & Bingley yesterday also obtained approval, via two extraordinary resolutions, to redeem early the outstanding amounts of the two covered bonds.

Stelios Manetas, head of liability management at BNP Paribas, said that the offer was attractive for investors and represented an opportune move by the issuer, which is aiming to close the covered bond programme.

“The buyback premium on offer presented investors with the opportunity to take profit versus their mark-to-market levels while divesting from securities that had been subject to multiple rating actions and, as a result, increased their reporting obligations,” he said. “It is fair to say that investors were long poised for an action on these securities in line with similar liability management transactions targeting securities in wind-down mode.”

Bradford & Bingley intends to run to maturity the remaining covered bonds outstanding under the programme, according to Manetas, with the last due in 2018.

Bradford & Bingley covered bonds are rated AA+ by Fitch, Aa1 by Moody’s and AAA by Standard & Poor’s.