Citizens Financial Group Announces Private Exchange Offers for Five Series of Subordinated Notes Open to Certain Investors

Rhea-AI Summary

Citizens Financial Group (CFG) has initiated offers to exchange five series of its outstanding subordinated notes for new subordinated notes. The offers, set to expire on February 9, 2021, include a total consideration for eligible holders, which can be enhanced by an Early Participation Premium if accepted by January 26, 2021. Eligible holders are defined as qualified institutional buyers or non-U.S. persons. The new notes will mature on February 11, 2031. The Exchange Offers are subject to certain conditions, and any questions can be directed to the Information Agent and Exchange Agent.

Positive

• Opportunity for eligible holders to exchange subordinated notes for new ones with favorable terms.
• Potentially lower interest rate risk with new 4.300% Fixed Rate Reset Subordinated Notes maturing in 2031.

Negative

• Exchange offers limited to qualified institutional buyers and non-U.S. persons, restricting broader participation.
• Dependence on market conditions and regulatory compliance for successful execution of the exchange.

Citizens Financial Group, Inc. (“Citizens”) (NYSE: CFG) today announced the commencement of its offers to exchange five series of its outstanding subordinated notes.

Citizens is offering to exchange in five concurrent, but separate, private offers (the “Exchange Offers”) any and all of the five series of outstanding subordinated notes identified under “Title of Series of Old Notes” in the table below (collectively, the “Old Notes”) for (a) one of three new series of subordinated notes set forth opposite the applicable series of Old Notes under “Title of Series of New Notes” in the table below (collectively, the “New Notes”) and (b) solely with respect to the 4.300% Subordinated Notes due 2025, an additional cash payment, in each case, on the terms and subject to the conditions set forth in the Offering Memorandum dated January 12, 2021 (the “Offering Memorandum” and, together with the accompanying eligibility certification, the “Exchange Offer Documents”). Only holders who have duly completed and returned an eligibility certification certifying that they are either (1) “qualified institutional buyers” as defined in Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”) (“QIBs”) or (2) non-“U.S. persons” (as defined in Rule 902 under the Securities Act) that are (a) located outside the United States, (b) not acquiring New Notes for the account or benefit of a U.S. Person, and (c) Non-U.S. Qualified Offerees (as defined in the Offering Memorandum), are authorized to receive the Offering Memorandum and to participate in the Exchange Offers (each, an “Eligible Holder”).

Description of the Old Notes				Exchange Consideration			Early Participation Premium		Total Consideration
CUSIP Number	Title of Series of Old Notes	Principal Amount Outstanding	Title of Series of New Notes		Cash Amount	New Notes Amount		New Notes Amount	Cash Amount	New Notes Amount
75524RAA7 / U7535RAA4	4.150% Subordinated Notes due 2022	$181,927,000	4.300% Fixed Rate Reset Subordinated Notes due 2031		N/A	$900		$30	N/A	$ 930
174610AC9	4.023% Subordinated Notes due 2024	$ 25,200,000	4.300% Fixed Rate Reset Subordinated Notes due 2031		N/A	$940		$30	N/A	$ 970
174610AK1	4.300% Subordinated Notes due 2025	$450,162,000	4.300% Fixed Rate Reset Subordinated Notes due 2031		$5.00	$970		$30	$5.00	$1,000
174610AL9	3.750% Subordinated Notes due 2024	$158,629,000	3.750% Fixed Rate Reset Subordinated Notes due 2031		N/A	$970		$30	N/A	$1,000
174610AJ4	4.350% Subordinated Notes due 2025	$194,016,000	4.350% Fixed Rate Reset Subordinated Notes due 2031		N/A	$970		$30	N/A	$1,000

The Exchange Offers will expire at 11:59 p.m. (Eastern time) on February 9, 2021, unless extended or earlier terminated by Citizens (such date and time with respect to an Exchange Offer, as the same may be extended or earlier terminated, the “Expiration Date”). In order to receive the Early Participation Premium (as defined below), holders of Old Notes must validly tender their Old Notes at or prior to 5:00 p.m. (Eastern time) on January 26, 2021 (such date and time with respect to an Exchange Offer, as the same may be extended, the “Early Participation Date”). Old Notes tendered may be validly withdrawn at any time at or prior to 5:00 p.m. (Eastern time) on January 26, 2021 (such date and time with respect to an Exchange Offer, as the same may be extended, the “Withdrawal Deadline”), but tenders after the Withdrawal Deadline will be irrevocable, except in certain limited circumstances where additional withdrawal rights are required by law. Subject to applicable law, the Early Participation Date and the Expiration Date may be extended for any reason, with or without extending the Withdrawal Deadline. The “Settlement Date” with respect to the Exchange Offers will be promptly following the Expiration Date and is expected to be February 11, 2021.

In exchange for each $1,000 principal amount of a series of Old Notes that is validly tendered at or prior to the applicable Early Participation Date and not validly withdrawn at or prior to the applicable Withdrawal Deadline, and accepted for exchange, holders of such Old Notes will be entitled to receive the consideration corresponding to such series of Old Notes set forth under “Total Consideration” in the table above (with respect to each series of Old Notes, the “Total Consideration”). The Total Consideration for each series of Old Notes includes an early participation premium set forth under “Early Participation Premium” for such series of Old Notes in the table above (with respect to each series of Old Notes, the “Early Participation Premium”), which consists of $30 principal amount of the corresponding series of New Notes per $1,000 principal amount of the applicable series of Old Notes.

In exchange for each $1,000 principal amount of a series of Old Notes that is validly tendered after the applicable Early Participation Date but prior to the applicable Expiration Date and not validly withdrawn, and accepted for exchange, holders of such Old Notes will be entitled to receive the consideration corresponding to such series of Old Notes set forth under “Exchange Consideration” in the table above (with respect to each series of Old Notes, an “Exchange Consideration”), which is equal to the applicable Total Consideration less the applicable Early Participation Premium.

In addition to the applicable Exchange Consideration or Total Consideration, Eligible Holders whose Old Notes are accepted for exchange will be paid accrued and unpaid interest on such Old Notes to, but not including, the Settlement Date. Interest will cease to accrue on the Settlement Date for all Old Notes accepted.

Each series of New Notes will mature on February 11, 2031 (the “Maturity Date”) and will bear interest (a) from the Settlement Date to, but excluding, February 11, 2026 (the “Reset Date”), at the rate set forth under “Initial Rate” for the applicable series of New Notes in the table below and (b) from and including the Reset Date to, but excluding, the Maturity Date, at a rate equal to the Five-Year U.S. Treasury Rate (as defined in the Offering Memorandum) as of the day falling two Business Days prior to the Reset Date plus 2.5%.

Title of Series of New Notes	Initial Rate
4.300% Fixed Rate Reset Subordinated Notes due 2031	4.300%
3.750% Fixed Rate Reset Subordinated Notes due 2031	3.750%
4.350% Fixed Rate Reset Subordinated Notes due 2031	4.350%

Citizens’ obligation to accept any series of Old Notes tendered in the Exchange Offers is subject to the satisfaction or waiver of certain conditions applicable to the Exchange Offer for such series as described in the Offering Memorandum. Citizens reserves the right, subject to applicable law, to waive any and all conditions to any Exchange Offer.

If and when issued, the New Notes will not be registered under the Securities Act or any state securities laws. Therefore, the New Notes may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and any applicable state securities laws. Citizens will enter into a registration rights agreement with respect to each series of the New Notes.

Global Bondholder Services Corporation will act as the Information Agent and the Exchange Agent for the Exchange Offers. Questions or requests for assistance related to the Exchange Offers or for additional copies of the Exchange Offer Documents may be directed to Global Bondholder Services Corporation at (866) 470-3800 (toll free) or (212) 430-3774 (collect). You may also contact your broker, dealer, commercial bank, trust company or other nominee for assistance concerning the Exchange Offers. The Exchange Offer Documents can be accessed at the following link http://gbsc-usa.com/eligibility/Citizens.

If Citizens terminates any Exchange Offer with respect to one or more series of Old Notes, it will give prompt notice to the Exchange Agent, and all Old Notes tendered pursuant to such terminated Exchange Offer will be returned promptly to the tendering holders thereof. With effect from such termination, any Old Notes blocked in DTC will be released.

Holders are advised to check with any bank, securities broker or other intermediary through which they hold Old Notes as to when such intermediary needs to receive instructions from a holder in order for that holder to be able to participate in, or (in the circumstances in which revocation is permitted) revoke their instruction to participate in, the Exchange Offers before the deadlines specified herein and in the Exchange Offer Documents. The deadlines set by each clearing system for the submission and withdrawal of exchange instructions will also be earlier than the relevant deadlines specified herein and in the Exchange Offer Documents.

This press release is for informational purposes only and does not constitute an offer to purchase, or a solicitation of an offer to sell, any Old Notes, and does not constitute an offer to sell, or a solicitation of an offer to purchase, any New Notes. The Exchange Offers are being made solely pursuant to the Offering Memorandum and related documents. The Exchange Offers are not being made to holders of Old Notes in any jurisdiction in which the making or acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction. In any jurisdiction in which the securities laws or blue sky laws require the Exchange Offers to be made by a licensed broker or dealer, the Exchange Offers will be deemed to be made on behalf of Citizens by the dealer managers or one or more registered brokers or dealers that are licensed under the laws of such jurisdiction.

This communication is not a prospectus for the purposes of the Prospectus Regulation. The expression “Prospectus Regulation” means Regulation (EU) 2017/1129, as amended, and includes any relevant implementing measure in any member state (“Member State”) of the European Economic Area (the “EEA”) which has implemented the Prospectus Regulation. PROHIBITION OF OFFERS TO EEA RETAIL INVESTORS. The New Notes are not intended to be offered or otherwise made available to and should not be offered or otherwise made available to any retail investor in the EEA. For these purposes, a retail investor means a person who is one (or more) of: (i) a retail client as defined in point (11) of Article 4(1) of Directive 2014/65/EU, as amended (“MiFID II”); (ii) a customer within the meaning of Directive (EU) 2016/97, as amended (the “Insurance Distribution Directive”), where that customer would not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II; or (iii) not a qualified investor as defined in the Prospectus Regulation. Consequently, no key information document required by Regulation (EU) No 1286/2014, as amended (the “PRIIPs Regulation”), for offering the New Notes or otherwise making them available to retail investors in the EEA has been prepared and therefore offering of the New Notes or otherwise making them available to any retail investor in the EEA may be unlawful under the PRIIPs Regulation.

PROHIBITION OF SALES TO UK RETAIL INVESTORS. The New Notes are not intended to be offered or otherwise made available to and should not be offered or otherwise made available to any retail investor in the UK. For these purposes: the expression “retail investor” means a person who is one (or more) of the following: (i) a retail client, as defined in point (8) of Article 2 of Regulation (EU) No 2017/565 as it forms part of domestic law by virtue of the EUWA; or (ii) a customer within the meaning of the provisions of the Financial Services and Markets Act 2000 (“FSMA”) and any rules or regulations made under the FSMA to implement the Insurance Distribution Directive, where that customer would not qualify as a professional client, as defined in point (8) of Article 2(1) of Regulation (EU) No 600/2014 as it forms part of domestic law by virtue of the EUWA; or (iii) not a qualified investor as defined in Article 2 of the Prospectus Regulation as it forms part of domestic law by virtue of the EUWA. Consequently, no key information document required by the PRIIPs Regulation as it forms part of domestic law by virtue of the EUWA (the “UK PRIIPs Regulation”) for offering or selling the New Notes or otherwise making them available to retail investors in the UK has been prepared and therefore offering or selling the New Notes or otherwise making them available to any retail investor in the UK may be unlawful under the UK PRIIPs Regulation.

In the United Kingdom, this press release is being distributed only to, and is directed only at qualified investors within the meaning of Article 2(e) of the Prospectus Regulation as it forms a part of domestic law by virtue of the EUWA who are (i) persons who have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended, the “Order”), and/ or (ii) high net worth companies (or persons to whom it may otherwise be lawfully communicated) falling within Article 49(2)(a) to (d) of the Order, which persons together we refer to in this press release as “relevant persons.” Accordingly, such documents and/or materials are not being distributed to, and must not be passed on to, the general public in the United Kingdom. This press release must not be acted on or relied on in the United Kingdom by persons who are not relevant persons. In the United Kingdom, any investment or investment activity to which this press release relates is only available to, and will be engaged in with, relevant persons only.

About Citizens Financial Group, Inc.

Citizens Financial Group, Inc. is one of the nation’s oldest and largest financial institutions, with $179.2 billion in assets as of September 30, 2020. Headquartered in Providence, Rhode Island, Citizens offers a broad range of retail and commercial banking products and services to individuals, small businesses, middle-market companies, large corporations and institutions. Citizens helps its customers reach their potential by listening to them and by understanding their needs in order to offer tailored advice, ideas and solutions. In Consumer Banking, Citizens provides an integrated experience that includes mobile and online banking, a 24/7 customer contact center and the convenience of approximately 2,700 ATMs and approximately 1,000 branches in 11 states in the New England, Mid-Atlantic and Midwest regions. Consumer Banking products and services include a full range of banking, lending, savings, wealth management and small business offerings. In Commercial Banking, Citizens offers a broad complement of financial products and solutions, including lending and leasing, deposit and treasury management services, foreign exchange, interest rate and commodity risk management solutions, as well as loan syndication, corporate finance, merger and acquisition, and debt and equity capital markets capabilities.

Forward-Looking Statements

This communication contains “forward-looking statements” — that is, statements related to future, not past, events. In this context, forward-looking statements often address our expected future business and financial performance and financial condition, and often contain words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “see,” “will,” “would,” or “target.” Forward-looking statements by their nature address matters that are, to different degrees, uncertain. Statements with respect to the Exchange Offers are forward-looking statements, based on our current expectations for the transactions, and are subject to the risk that the transactions may not be completed in a timely manner or at all, and that the final terms of the transactions may differ, possibly materially, from those described in this press release due to future events. The forward-looking statements included in this press release are made only as of the date of this press release, and we undertake no obligation to update publicly these forward-looking statements to reflect new information, future events or otherwise.

CFG-IR

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FAQ

What is the deadline for Citizens Financial Group's exchange offers for subordinated notes?

The exchange offers will expire at 11:59 p.m. Eastern time on February 9, 2021.

How can eligible holders participate in the exchange offers for CFG subordinated notes?

Eligible holders must complete and return an eligibility certification to participate in the exchange offers.

What is the benefit of participating in the CFG exchange offers?

Participants can exchange old subordinated notes for new notes potentially with lower interest rates and an early participation premium.

What happens if the exchange offers are terminated?

If terminated, all old notes tendered will be promptly returned to the holders.

Who can participate in the CFG subordinated notes exchange offers?

Only qualified institutional buyers and non-U.S. persons are eligible to participate.