Citycon Oyj commences tender offers for three series of bonds

CITYCON OYJ   Inside information   7 November 2019 at 13:00 hrs 

NOT FOR DISTRIBUTION IN OR INTO OR TO ANY PERSON LOCATED OR RESIDENT IN THE UNITED STATES, ITS TERRITORIES AND POSSESSIONS (INCLUDING PUERTO RICO, THE U.S. VIRGIN ISLANDS, GUAM, AMERICAN SAMOA, WAKE ISLAND AND THE NORTHERN MARIANA ISLANDS), ANY STATE OF THE UNITED STATES OR THE DISTRICT OF COLUMBIA OR IN ANY JURISDICTION WHERE IT IS UNLAWFUL TO RELEASE, PUBLISH OR DISTRIBUTE THIS ANNOUNCEMENT

THIS ANNOUNCEMENT RELATES TO THE DISCLOSURE OF INFORMATION THAT QUALIFIED OR MAY HAVE QUALIFIED AS INSIDE INFORMATION WITHIN THE MEANING OF ARTICLE 7(1) OF THE MARKET ABUSE REGULATION (EU) 596/2014

Citycon Oyj (the Offeror) has decided, subject to certain offer and distribution restrictions, to commence an offer (i) to purchase any and all of its €500,000,000 3.75 per cent. Notes due 2020 (ISIN: XS0946179529 / Common Code: 094617952) (the 2020 Notes) and (ii) to purchase, subject to the Offer Cap (as defined below), (a) the €300,000,000 2.375 per cent. Guaranteed Notes due 2022 of Citycon Treasury B.V. and guaranteed by Citycon Oyj (ISIN: XS1291367313 / Common Code: 129136731) (the 2022 Notes) and (b) the €350,000,000 2.50 per cent. Guaranteed Notes due 2024 of Citycon Treasury B.V. and guaranteed by Citycon Oyj (ISIN: XS1114434167 / Common Code: 111443416) (the 2024 Notes and, together with the 2020 Notes and the 2022 Notes, the Notes and each a Series).

The Offeror invites holders of the Notes (the Noteholders) to tender their Notes for cash in accordance with the procedures described in the tender offer memorandum dated 7 November 2019 (the Tender Offer Memorandum) (each such invitation in relation to each Series, a Tender Offer and collectively, the Tender Offers) as part of the Offeror’s refinancing transaction, pursuant to which Citycon Oyj (the New Notes Issuer), expects to issue, on or prior to 21 November 2019 (the Payment Date), new €400,000,000 subordinated fixed to reset rate capital securities (the New Notes), on terms and conditions reasonably satisfactory to the Offeror, the net proceeds of which will be used, among other things, to purchase Notes pursuant to the Tender Offers. 

The complete terms of the Tender Offers are set forth in the Tender Offer Memorandum. Terms used but not defined herein shall have the meaning ascribed to such terms in the Tender Offer Memorandum.

The Offeror has retained Danske Bank A/S and UBS Europe SE (together, the Dealer Managers) to manage the Tender Offers for the following securities:

Description of the Notes Principal AmountOutstanding ISIN / Common Code Maturity Date Purchase Yield* Purchase Spread Interpolated Mid-Swap Rate Call Date Amount Subject to the Tender Offers
3.75 per cent. Notes due 2020 €218,674,000 XS0946179529 /094617952 24 June 2020 -0.20 per cent. Not Applicable  Not Applicable  Not Applicable  Any and All 
2.375 per cent Guaranteed Notes due 2022 €300,000,000 XS1291367313 /129136731 16 September 2022 Determined as set out in the Tender Offer Memorandum 65 basis points 2022 Notes Interpolated Mid-Swap Rate 16 June 2022 Up to the Offer Cap (as defined below)
2.50 per cent Guaranteed Notes due 2024 €350,000,000 XS1114434167 /111443416 1 October 2024 Determined as set out in the Tender Offer Memorandum 140 basis points  2024 Notes Interpolated Mid-Swap Rate  1 July2024

* For information purposes only, the Purchase Price in respect of the 2020 Notes will, when determined in the manner described in the Tender Offer Memorandum on the basis of a Payment Date of 21 November 2019, be 102.336 per cent. Should the Payment Date be amended, the Purchase Price in respect of the 2020 Notes will be recalculated and announced, as further described in the Tender Offer Memorandum.

Purpose of the Tender Offers

The purpose of the Tender Offers, in conjunction with the issue of New Notes, is to reduce the Offeror’s leverage and optimise its capital structure. Furthermore, the Tender Offers will provide liquidity to those holders whose Notes are accepted for purchase in the Tender Offers.

The Tender Offers

Acceptance of the Notes and Pro Ration

The Offeror will decide in its sole and absolute discretion whether to purchase Notes validly tendered and not withdrawn prior to 5:00 p.m., Central European time, on 15 November 2019 (the Expiration Deadline).

If the Offeror decides to accept any validly tendered Notes for purchase pursuant to the Tender Offers, the Offeror intends to:

(i)            first accept any and all of the 2020 Notes; and

(ii)           if the total amount payable (excluding Accrued Interest) for the 2020 Notes is less than €250,000,000 (although the Offeror reserves the right, in its sole and absolute discretion and for any reason, to significantly increase or significantly decrease  such amount) (such amount as the same may be significantly increased or significantly decreased, the Maximum Aggregate Consideration), then accept an aggregate nominal amount of 2022 Notes and/or 2024 Notes for purchase pursuant to the relevant Tender Offer(s) such that the total amount payable (excluding Accrued Interest) for such Notes (the Offer Cap) is no greater than (i) the Maximum Aggregate Consideration less (ii) the total amount (excluding Accrued Interest) payable for the 2020 Notes accepted for purchase pursuant to the relevant Tender Offer(s), all on the terms and conditions contained in the Tender Offer Memorandum. The Offeror will determine the allocation of the Offer Cap between each of the 2022 Notes and the 2024 Notes in its sole and absolute discretion, and reserves the right to accept significantly more or significantly less (or none) of either the Series of the 2022 Notes or the Series of the 2024 Notes, as applicable, as compared to the other Series of the 2022 Notes or the 2024 Notes, as applicable.

In respect of each Series of the 2022 Notes and the 2024 Notes, if the Offeror decides to accept any validly tendered 2022 Notes or 2024 Notes, as applicable, for purchase pursuant to the relevant Tender Offer(s) and the aggregate nominal amount of such tendered Notes is greater than the relevant final aggregate nominal amount of each Series accepted for purchase pursuant to the relevant Tender Offer (in respect of each Series, the Series Acceptance Amount) the Offeror intends to accept such Notes for purchase on a pro rata basis such that the aggregate nominal amount of the 2022 Notes or 2024 Notes, as applicable, is no greater than the relevant Series Acceptance Amount as further described in the Tender Offer Memorandum.

If a Noteholder submits a valid tender of Notes pursuant to the relevant Tender Offer(s) and the Offeror accepts the tender of such Notes, the Offeror will pay a purchase price (in respect of each Series, a Purchase Price) to be determined in the manner described in the Tender Offer Memorandum:

(i)            in the case of the 2020 Notes, by reference to a fixed purchase yield of -0.20 per cent. (the 2020 Notes Purchase Yield); and

(ii)           in the case of the 2022 Notes and the 2024 Notes, at or around 2.00 p.m., Central European time, on 18 November (the Pricing Time) by reference to the sum (each such sum, together with the 2020 Notes Purchase Yield, a Purchase Yield) of:

               (a)    the relevant Purchase Spread specified in the table above; and

               (b)    the relevant Interpolated Mid-Swap Rate (as defined in the Tender Offer Memorandum).

For information purposes only, the Purchase Price in respect of the 2020 Notes will, when determined in the manner described in the Tender Offer Memorandum on the basis of a Payment Date of 21 November 2019, be 102.336 per cent. Should the Payment Date be amended, the Purchase Price in respect of the 2020 Notes will be recalculated and announced, as further described in the Tender Offer Memorandum.

Financing Condition

Whether the Offeror will purchase any Notes validly tendered in the Tender Offers is subject, without limitation, to (i) the pricing of the issue of the New Notes on terms and conditions acceptable to the New Notes Issuer, (ii) the signing by the New Notes Issuer and the managers of a subscription agreement in respect of the subscription for the New Notes and (iii) such subscription agreement remaining in full force and effect as at the Payment Date (the Financing Condition). Even if the Financing Condition is satisfied (or waived), the Offeror is not under any obligation to accept for purchase any Notes validly tendered pursuant to the Tender Offers.

Priority Allocation of the New Notes

The New Notes Issuer will, in connection with allocations of the New Notes, consider among other factors whether or not the relevant investor seeking an allocation of the New Notes has validly tendered or indicated a firm intention to validly tender Notes pursuant to the relevant Tender Offer(s), and, if so, the aggregate nominal amount of Notes tendered or firmly intended to be tendered by such investor. When considering allocations of the New Notes, the New Notes Issuer intends to give preference to those investors who, prior to such allocation, have validly tendered, or indicated their firm intention to validly tender, Notes. Any such preference will be applicable up to the aggregate nominal amount of Notes validly tendered or firmly indicated to be validly tendered pursuant to the relevant Tender Offer(s). However, the New Notes Issuer is not obliged to allocate the New Notes to an investor which has validly tendered or indicated a firm intention to validly tender the Notes pursuant to the relevant Tender Offer(s). Any allocation of the New Notes, while being considered by the New Notes Issuer as set out above, will be made in accordance with customary new issue allocation processes and procedures.

The Offeror has commenced, concurrently with the announcement of the Tender Offers, an offer (the NOK Notes Tender Offer) to purchase the NOK 1,250,000,000 senior unsecured Notes due 2021 issued by Citycon Treasury B.V. (the 2021 NOK Notes). The 2021 NOK Notes are not being, and will not be, offered or sold pursuant to the Tender Offer Memorandum and the NOK Notes Tender Offer is not being, and will not be, subject to the terms and conditions set forth in the Tender Offer Memorandum. None of the Offeror, any of the Offeror’s subsidiaries or affiliates or their respective advisors or the Dealer Managers are providing the noteholders of the 2021 NOK Notes with any legal, business, tax, investment or other advice in connection with the NOK Notes Tender Offer. Such noteholders should consult with their own advisors as needed to assist in making an investment decision.

Expected Timetable

Below is an indicative timetable providing information with respect to the expected dates and times for the Tender Offers. The timetable is subject to change, and dates and times may be extended, amended or terminated by the Offeror in accordance with the terms of the Tender Offers, as described in the Tender Offer Memorandum.

Date Calendar Date and Time Event
Commencement Date 7 November 2019 Commencement of the Tender Offers upon the terms and subject to the conditions set forth in the Tender Offer Memorandum. Tender Offer Memorandum available from the Tender Agent.
Expiration Deadline 5:00 p.m., Central European time, on 15 November 2019 Final deadline for Notes of each Series to be validly tendered. The Tender Offers expire unless earlier extended or terminated. The Offeror may, in its sole and absolute discretion, extend or terminate any Tender Offer.
Indicative Results Announcement As soon as practicable after the Expiration Deadline The Offeror will announce a non-binding indication of whether it intends to accept (subject to satisfaction or waiver of the Financing Condition and all of the General Conditions) valid tenders of Notes pursuant to the Tender Offers and, if so, the aggregate nominal amount of each Series of Notes validly tendered pursuant to the relevant Tender Offer(s) and a non-binding indication of the level at which the Offeror expects to set the Maximum Aggregate Consideration and each Series Acceptance Amount and any applicable Pro-Ration Factor for the 2022 Notes and/or 2024 Notes, as applicable.
Pricing of the Tender Offers At or around 2.00 p.m., Central European time, on 18 November 2019 Determination of the 2022 Notes Interpolated Mid-Swap Rate, the 2024 Notes Interpolated Mid-Swap Rate, the Purchase Yield in respect of each Series of the 2022 Notes and the 2024 Notes, and the Purchase Price for each Series.
Final Results Announcement As soon as practicable after the Pricing Time on 18 November 2019 The Offeror will announce whether it will accept (subject to satisfaction or waiver of the Financing Condition and all of the General Conditions) valid tenders of Notes of a Series pursuant to the relevant Tender Offer(s) and, if so, (a) confirmation of the 2022 Notes Interpolated Mid-Swap Rate, the 2024 Notes Interpolated Mid-Swap Rate, the Purchase Yield in respect of each Series of the 2022 Notes and the 2024 Notes, and the Purchase Price and Accrued Interest in respect of each Series, (b) the aggregate nominal amount of Notes of each Series validly tendered pursuant to the relevant Tender Offer(s), (c) the Maximum Aggregate Consideration and each Series Acceptance Amount and (d) any applicable Pro-Ration Factor for the 2022 Notes and/or 2024 Notes, as applicable.
Payment Date Expected to be on or about 21 November 2019 (being the same date as the issuance of the New Notes) Subject to satisfaction or waiver of the Financing Condition and all of the General Conditions, the payment of the relevant Purchase Price and Accrued Interest for Notes of each Series validly tendered and accepted for purchase pursuant to the relevant Tender Offer(s).If the Offeror accepts the tender of Noteholders’ Notes pursuant to the Tender Offers, Noteholders, or the custodial entity acting on such Noteholders’ behalf, must deliver to the Offeror good and marketable title to such Notes.

General

Subject to applicable law, the Offeror expressly reserves the right, in its sole and absolute discretion, to (i) extend the period during which the Tender Offers are open, (ii) re-open or amend the Tender Offers in any respect, (iii) amend the timing of the Tender Offers including delaying the Expiration Deadline and/or the Payment Date and (iv) terminate the relevant Tender Offer prior to acceptance for purchase by the Offeror of the Notes in the Tender Offers. Any extension, termination, re‑opening or amendment of the Tender Offers will be made through a press release to be distributed through the Clearing Systems for communication to persons who are shown in the records of the Clearing Systems as holder of the Notes, a stock exchange release to be posted on Nasdaq Helsinki Ltd stock exchange as well as a notice posted on the Euronext Dublin website. From time to time during or after completion of the Tender Offers, the Offeror or its respective affiliates may acquire any Notes that are not tendered and accepted in the Tender Offers through open market purchases, privately negotiated transactions, tender offers, exchange offers, redemptions or otherwise, upon such terms and at such prices as the Offeror or the relevant affiliate may determine (or as may be provided for in the Trust Deeds). The value received in any such transaction might be more or less than that offered in the Tender Offers for the Notes.

Each Noteholder participating in the relevant Tender Offer(s) will represent that it is not a U.S. Person (as defined in Regulation S of the Securities Act of 1933, as amended) and is not participating in such Tender Offer from the United States or it is acting on a non-discretionary basis for a principal who is not a U.S. Person and is located and resident outside the United States that is not giving an order to participate in such Tender Offer from the United States. For the purposes hereof, United States means the United States of America, its territories and possessions (including Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the Northern Mariana Islands), any state of the United States of America and the District of Columbia.

Lucid Issuer Services Limited is acting as tender agent in respect of the Tender Offers (the Tender Agent). Noteholders with questions about the Tender Offers should contact the Dealer Managers or the Tender Agent.

Noteholders who have Notes registered in the name of a broker, dealer, commercial bank, custodian, trust company or other nominee must contact, and issue appropriate instructions to, such broker, dealer, commercial bank, custodian, trust company or other nominee if such Noteholder desires to tender those Notes. The deadlines set by each Clearing System for the submission and withdrawal of electronic instructions will be earlier than the relevant deadlines specified in the Tender Offer Memorandum.

Copies of the Tender Offer Memorandum can be obtained upon request by eligible Noteholders from the Tender Agent at the telephone numbers or email addresses below.

Espoo, 7 November 2019

CITYCON OYJ

For further information, please contact:

Eero Sihvonen
Executive VP and CFO
Tel. +358 50 557 9137
eero.sihvonen@citycon.com 

Mikko Pohjala
IR and Communications Director
Tel. +358 40 838 0709
mikko.pohjala@citycon.com 

Citycon Oyj is a leading owner, manager and developer of urban, grocery-anchored shopping centres in the Nordic region, managing assets that total approximately EUR 4.4 billion. Citycon is the number one shopping centre owner in Finland and among the market leaders in Norway, Sweden and Estonia. Citycon has also established a foothold in Denmark.

Citycon Oyj has investment-grade credit ratings from Moody's (Baa3) and Standard & Poor's (BBB-). Citycon Oyj’s shares are listed on Nasdaq Helsinki Ltd. stock exchange.

For more information about Citycon Oyj, please visit www.citycon.com.

Requests for information in relation to the Tender Offers should be directed to:

THE DEALER MANAGERS

Danske Bank A/S2-12 Holmens KanalDK-1092 Copenhagen KDenmarkAttention: Debt Capital MarketsEmail: liabilitymanagement@danskebank.dk Telephone: +45 33 64 88 51 UBS Europe SE
Bockenheimer Landstraße 2-4
60306 Frankfurt am MainGermany Attention: Liability Management GroupEmail: ol-liabilitymanagement-eu@ubs.com Telephone: +44 20 7568 1121

Requests for information in relation to the procedures for tendering Notes and participating in the Tender Offers and the submission of an electronic instruction should be directed to the Tender Agent:

THE TENDER AGENT

Lucid Issuer Services Limited
Tankerton Works
12 Argyle Walk
London WC1H 8HA
United Kingdom Telephone: +44 (0)20 7704 0880
Email: citycon@lucid-is.com
Attention: David Shilson

DISCLAIMER

The Tender Offers are not being made, and will not be made, directly or indirectly, in or into, or by use of the mails of, or by any means or instrumentality of interstate or foreign commerce of, or of any facilities of a national securities exchange of, the United States. This includes, but is not limited to, facsimile transmission, electronic mail, telex, telephone and the internet. Accordingly, copies of this announcement and the Tender Offer Memorandum and any other documents or materials relating to the Tender Offers are not being, and must not be, directly or indirectly mailed or otherwise transmitted, distributed or forwarded (including, without limitation, by custodians, nominees or trustees) in or into the United States or to any U.S. person (as defined in Regulation S under the Securities Act) (a U.S. person). Any purported tender of Notes in the Tender Offers resulting directly or indirectly from a violation of these restrictions will be invalid and any purported tender of Notes made by a person located in the United States or that is a U.S. person, or any agent, fiduciary or other intermediary acting on a non‑discretionary basis for a principal giving instructions from within the United States or that is a U.S. person will be invalid and will not be accepted.

Neither this announcement nor the Tender Offer Memorandum is an offer of securities for sale in the United States or to U.S. persons. Securities may not be offered or sold in the United States absent registration under, or an exemption from the registration requirements of, the Securities Act. The New Notes have not been, and will not be, registered under the Securities Act or the securities laws of any state or other jurisdiction of the United States, and may not be offered, sold or delivered, directly or indirectly, in the United States or to, or for the account or benefit of, U.S. persons.

Each Noteholder participating in the Tender Offers will represent that it is not located in the United States, it is not participating in the Tender Offers from the United States and it is not a U.S. person, or that it is acting on a non‑discretionary basis for a principal located outside the United States that is not giving an order to participate in the Tender Offers from the United States and that is not a U.S. person. For the purposes of this and the above two paragraphs, “United States” means the United States of America, its territories and possessions, any state of the United States of America and the District of Columbia.

The distribution of the Tender Offer Memorandum in certain jurisdictions (in particular, the United States, the United Kingdom, France, Italy and Finland) may be restricted by law. Persons into whose possession the Tender Offer Memorandum comes are required by the Offeror, the Dealer Managers and the Tender Agent to inform themselves about, and to observe, any such restrictions. The Offeror, the Dealer Managers, the Tender Agent and their respective officers, directors and representatives assume no legal responsibility for any violations of such restrictions, regardless of whether the parties contemplating divesting the Notes are aware of these restrictions or not.

This announcement is neither an offer to purchase nor the solicitation of an offer to sell any of the Notes, nor in any circumstances nor in any jurisdiction in which such offer or solicitation is unlawful. The Tender Offers are made solely pursuant to the Tender Offer Memorandum dated 7 November 2019.  

This announcement is released by Citycon Oyj and contains information that qualified or may have qualified as inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 (MAR), encompassing information relating to the Tender Offers described above. For the purposes of MAR and Article 2 of Commission Implementing Regulation (EU) 2016/1055, this announcement is made by Eero Sihvonen, CFO at Citycon Oyj.

This announcement must be read in conjunction with the Tender Offer Memorandum. This announcement and the Tender Offer Memorandum contain important information which should be read carefully before any decision is made with respect to the Tender Offers. If any Noteholder is in any doubt as to the action it should take, it is recommended that such Noteholder seek its own financial and legal advice, including as to any tax consequences, immediately from its broker, bank manager, solicitor, accountant or other independent financial or legal adviser. None of the Offeror, the Dealer Managers, the Tender Agent or any of their affiliates are making any recommendations to the Noteholders as to whether to tender or refrain from tendering their Notes in the Tender Offers. Noteholders must decide how many Notes they will tender, if any.

The information contained in this announcement and the Tender Offer Memorandum does not constitute an invitation or inducement to engage in investment activity within the meaning of the United Kingdom Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended, the “Financial Promotion Order”)). In the United Kingdom, this announcement and the Tender Offer Memorandum are being distributed only to, and are directed only at, and must not be acted on or relied on by any person except, those persons who (i) have professional experience in matters relating to investments falling within the definition of investment professionals (as defined in Article 19(5) of the Financial Promotion Order), (ii) are persons falling within Article 49(2)(a) to (d) (“high net worth companies, unincorporated associations etc.”) of the Financial Promotion Order, (iii) are existing Noteholders or other persons falling within Article 43 of the Financial Promotion Order, (iv) are outside the United Kingdom, or (v) are persons to whom an invitation or inducement to engage in investment activity within the meaning of section 21 of the Financial Services and Markets Act 2000 in connection with the issue or sale of any securities may otherwise lawfully be communicated or caused to be communicated. This announcement and the Tender Offer Memorandum are directed only at relevant persons and must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this document relates is available only to relevant persons and will be engaged in only with relevant persons.

Other restrictions apply, including in respect of Finland, France and Italy, as more fully set out in the Tender Offer Memorandum.

This announcement contains forward-looking statements and information that is necessarily subject to risks, uncertainties, and assumptions. No assurance can be given that the transactions described herein will be consummated or as to the terms of any such transactions. The Offeror assumes no obligation to update or correct the information contained in this announcement.

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