Royal Bank of Scotland Group Plc, Britain’s biggest publicly owned lender, offered to exchange a total $8.6 billion of lower Tier 2 securities for new notes, valuing the debt at as little as 75 percent of face value.
The bonds, in Canadian, Australian and U.S. dollars, as well as euros and Swiss francs, have a final maturity date as late as 2017 and can be called this year, according to a statement. The European Commission prohibited the bank from exercising calls as a con1dition of the bailout it received from the U.K. government.
European banks are adjusting their capital structures to be ready for new regulations designed to force them to hold bigger cushions against losses. By buying back its bonds at a discount, Edinburgh-based RBS can register a gain which the lender can use to bolster its capital ratios.
Adam Durchslag, a spokesman at the lender in London, declined to comment on the overall size of the potential capital gain, saying the bank had no information on take up.
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