7 June 2006
Principality, Wales' largest building society,
has raised £120 million in capital to support the group's growth
plans over the medium term.
Principality presented to more than 20 potential investors in
London and Edinburgh and was three-and-a-half times oversubscribed
for the 10 year subordinated debt issue, with almost 100% of the
investors met participating.
The issue, which can be called after five years, returns a rate
of 5.375% fixed for five years – 0.9% over Gilts. The deal is due
to complete tomorrow (on Thursday 8 June 2006).
This is the second time that Principality has accessed the
capital markets following the very successful £60 million Permanent
Interest Bearing Shares (PIBS) issue in June 2004.
Guy Thomas, finance director at Principality, said: "We are
delighted with the keen response to this issue which shows the
Principality brand is known and respected by the investment
community. The deal has extended our footprint in the capital
markets - a total of 24 investors participated in the transaction,
of whom 20 were new to Principality.
"In the face of our solid retail inflows, strong asset growth
and the positive tone of the UK housing market, we are keen to
maintain our robust solvency ratios. This additional capital
enables us to become an even stronger Welsh mutual organisation and
will fund our residential, commercial and secured lending
businesses."
The issue was led jointly by Barclays Capital and Royal Bank of
Scotland.
Daniel Fairclough, associate director at Barclays Capital added:
"The transaction was a huge success with the deal being covered
within an hour of the books opening to investors. The total order
book reached over £400m, a strong response considering the size of
the transaction, allowing the issue to be priced at the upper end
of the price guidance."
"The building society's credit story was well received
by the London and Edinburgh based investors – reflecting
Principality's strong Welsh franchise and robust 2005
performance."
Ends
Picture Caption
Guy Thomas, finance
director at Principality Building Society.
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