RBS sees 51-64 pct take-up on $23 bln debt offer

Royal Bank of Scotland said on Thursday it had seen an early average take-up of 51 to 64 percent on its $23 billion three-part bond buyback and exchange offer.

The bank said the early take-up offer to exchange 5.75 billion pounds' ($8.5 billion) worth of Tier 1 and Upper Tier 2 bonds into senior unsecured bonds was 61 percent.

That drew slightly less bondholder interest than Lloyds Banking Group's debt exchange offer, which saw an early take-up rate in excess of 65 percent last week and final interest of 67 percent on Thursday.

RBS said that 64 percent of bondholders had opted to participate in its buyback offer for $750 million and 3.25 billion euros ($4.3 billion) worth of Tier 1 and Upper Tier 2 bonds.

The part-nationalised bank offered to pay 40 to 70 percent of face value for early tenders on the exchange and 40 to 50 percent of face value on the tender offer.

The final deadline for the exchange and buybacks is April 22, although the offer prices are less attractive.

In addition, RBS said that it had seen an average 51 percent take-up for a tender on $10 billion worth of 10 U.S. dollar-denominated bonds, on which the bank had offered 30 to 45 percent of face value including an additional payment for early tender.

Senior unsecured bonds rank higher than Upper Tier 2 and Tier 1 bonds in a bank's capital structure.

Other banks, including UBS and Credit Agricole, have launched bond buyback or exchange offers to strengthen the quality of their balance sheets by taking advantage of discounted prices.