HBOS succeeds at soft bullet switches in second attempt
Monday, 21 May 2018
Bank of Scotland succeeded in converting two hard bullet euro benchmark covered bonds to soft bullets in bondholder meetings today (Monday), at its second attempt to gain approval for the switch.
On 27 April, Bank of Scotland (HBOS) announced the consent solicitation targeting a EUR1.25bn issue due June 2019 (ISIN: XS0193640629) and a EUR1.5bn issue due February 2020 (ISIN: XS0212074388).
Separate meetings were held with the holders of each bond in London this morning, and the issuer subsequently announced that the conversion of both was approved. The amendments to the conditions of both bonds will be implemented by Wednesday.
HBOS first attempted to convert the bonds in a 2015 consent solicitation. While the conversion of five other hard bullet bonds to soft bullets was approved in that exercise, bondholders voted against the conversion of the 2019 and 2020 issues – ahead of the latest consent solicitation, they were the issuer’s only remaining hard bullets.
Moody’s, S&P and Fitch announced that the conversion would not have an impact on their respective triple-A ratings of the covered bonds.