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OTP launches €535 mln ICES scheme

OTP Bank Nyrt said it was launching an offer of approximately €535 million (Ft 141.4 billion) of Income Certificates Exchangeable for Shares (ICES), based upon 14.5 million underlying shares on Thursday.

The ICES will be issued by Opus Securities, and will be exchangeable into ordinary shares of OTP. Merrill Lynch International is acting as sole bookrunner and lead manager.
OTP will use the net proceeds from the sale to partially fund the acquisitions of the Russian Investsberbank Group (96.4% stake), and Raiffeisenbank Ukraine. The bank said that, subject to market conditions, it expects to finance the remaining part of these acquisitions by issuing a perpetual, non-dilutive subordinated debt in the near term. OTP, in fact, has already commissioned UBS and BNP Paribas as lead managers to a euro-denominated upper tier 2 subordinated bond, its first such transaction according to a London report earlier on Thursday.
Dow Jones reported the deal will launch and price following investor roadshows to be held between October 25 and October 29.
The ICES will be issued at 100% of their principal amount. They are expected to bear a cash coupon of between 3.45% and 3.95% per annum up to year 10, thereafter they are expected to bear a floating rate of 3-month Euribor plus 3.0% to 3.5 %, paid quarterly in arrear.
The ICES are planned to be listed on the Luxembourg Stock Exchange on or following the issuance date. The ICES will be offered as a private placement to institutional investors outside the United States, in line with regulations of the U.S. Securities Act.