ING announced today that it has completed its planned repurchase of EUR 5 billion of the Core Tier 1 securities issued in November 2008 to the Dutch State and its EUR 7.5 billion rights issue.
Jan Hommen, CEO of ING said: “Today we have successfully completed a major first part of the measures we announced in October to chart a clear course forward and return our focus to the business and what matters most to our customers. With the support of our investors we have paid back half of the funds we received last year from the Dutch State.”
As announced on 26 October 2009, ING and the Dutch State agreed to alter the repayment terms of half of the Core Tier 1 securities in order to facilitate early repayment. The total payment amounted to EUR 5,606 million, consisting of the EUR 5 billion principal amount, plus accrued coupon from 12 May 2009 to 20 December 2009 of EUR 259 million and a repayment premium of EUR 347 million.
ING has funded the State repayment with part of the proceeds of the rights issue that it has completed and settled today. A total of 1,768,412,544 (depositary receipts for) shares were offered and sold, of which 97% through the exercise of rights and the remainder through placements to institutional investors. As a result, ING today received approximately EUR 7.3 billion in proceeds, net of fees and expenses.
The proceeds of the rights issue in excess of the State repayment will be used to mitigate the capital impact of the additional payments for the Illiquid Assets Back-up Facility which ING agreed upon in order to get approval from the European Commission on ING’s Restructuring Plan, as announced on 26 October 2009. In total, these extra payments will amount to a net present value of EUR 1.3 billion, which will be booked as a one-off pre-tax special item in the fourth quarter of 2009. Further excess proceeds of the rights issue will be used to strengthen ING’s capital position.
