Bloomberg News

ING Makes Tender, Exchange Offers for $7.7 Billion in Debt

December 12, 2011

(Updates with details on buyback offers in fifth paragraph.)

Dec. 12 (Bloomberg) -- ING Groep NV, the biggest Dutch financial-services company, offered to buy back and exchange 5.8 billion euros ($7.7 billion) of subordinated debt to bolster its finances as regulators demand higher capital reserves.

ING made three offers for seven tranches of debt securities, with offer prices ranging from 58 percent to 87 percent of nominal value, the Amsterdam-based lender said in a statement today. It made a bid for cash on two portions of debt in the U.S. and two exchange offers for new senior debt on five tranches of debt in euros and British pounds in Europe.

The Dutch firm follows competitors including Lloyds Banking Group Plc, BNP Paribas SA and Commerzbank AG in making efforts to improve the quality of their capital as they are pressed by regulators to boost their ability to absorb losses. Financial- services companies seek to replace debt that will count less toward the highest form of capital under rules set by the Basel Committee on Banking Supervision, scheduled to take effect in 2013.

“The offers will strengthen the quality of ING’s capital base,” the company said in the statement. The transaction is also in anticipation of regulatory changes that will “diminish the contribution of subordinated debt to regulatory capital going forward,” it said.

ING offered to buy back for cash $2.5 billion in Tier 1 securities in the U.S. at 80 percent of their nominal value. In Europe, the firm seeks to swap Tier 1 and Lower Tier 2 debt denominated in euros and pounds into senior unsecured paper.

Banks divide debt capital into tiers, depending on the ability of the bonds to absorb losses. The most junior is Tier 1, which includes equity and retained earnings.

UBS AG is lead deal manager for the offer, while Barclays Plc and ING are acting as joint dealer manager.

ING is scheduled to announce the results of the offers, which have been approved by the European Commission and the Dutch central bank, on Dec. 21.

--Editors: Stephen Taylor, Dylan Griffiths

To contact the reporter on this story: Maud van Gaal in Amsterdam at mvangaal@bloomberg.net

To contact the editor responsible for this story: Frank Connelly at fconnelly@bloomberg.net


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