ING announced today that it has notified the Dutch State that it will exercise its option to early repurchase EUR 5 billion of the Core Tier 1 securities.
As announced on 26 October 2009, ING and the Dutch State agreed to alter the repayment terms of the Core Tier 1 securities issued in November 2008, in order to facilitate early repayment. The repayment, for which the Dutch Central Bank has given its consent, is expected to take place on 21 December 2009.
The total payment is expected to amount to EUR 5,606 million. This consists of a repayment of the EUR 5 billion principal amount, representing half of the Core Tier 1 securities, plus accrued coupon from 12 May 2009 to 20 December 2009 of EUR 259 million and a repayment premium of EUR 347 million.
ING intends to fund the repayment with the proceeds of the EUR 7.5 billion rights issue that ING expects to complete on 21 December 2009.
Jan Hommen, CEO of ING stated: “After repaying half of the funds we received last year from the Dutch State, we will work now towards repaying the second half of the Core Tier 1 securities. We anticipate doing so using retained earnings and potential proceeds from divestments. The Dutch State has indicated it is open to discussing modification of the repayment conditions for the second half.”
