The Hongkong and Shanghai Banking Corporation Limited announces tender offer for up to an aggregate nominal amount of U.S.$600,000,000 of the outstanding U.S.$1,000,000,000 Fixed Rate Reset Guaranteed Exchangeable Subordinated Callable Notes due 2041 (Regulation S ISIN USG7306BAA29 and Rule 144A ISIN US74734PAA03) issued by QBE Capital Funding III Limited (the Notes) and guaranteed on a subordinated basis by QBE Insurance Group Limited (the Company)

HONG KONG, May 25, 2016 /PRNewswire/ -- The Hongkong and Shanghai Banking Corporation Limited (the Offeror) announced today invitations to Noteholders of the outstanding Notes to tender such Notes for purchase by the Offeror for cash up to an aggregate nominal amount of U.S.$600,000,000 (the Maximum Acceptance Amount), subject to the satisfaction of the conditions described in the tender offer memorandum dated 25 May 2016 (the Tender Offer Memorandum) prepared by the Offeror (each such invitation, an Offer).

This announcement does not contain the full terms and conditions of the Offer which are set out in the Tender Offer Memorandum.  This announcement is subject to the offer restrictions set out below and as more fully described in the Tender Offer Memorandum.  Noteholders are advised to read carefully the Tender Offer Memorandum, copies of which are (subject to distribution restrictions) available from the Dealer Managers and the Tender Agent as set out below.  Capitalised terms used in this announcement but not defined have the meanings given to them in the Tender Offer Memorandum.

The following table sets forth certain information relating to pricing for the Offer.

Rationale for the Offer

The Company has advised the Offeror that the rationale of the Offer is to help enhance the efficiency of the Company's capital base.

The Offer

In order to participate in, and be eligible to receive the Tender Consideration pursuant to the Offer, Noteholders must validly tender their Notes by delivering, or arranging to have delivered on their behalf, a valid Tender Instruction that is received by the Tender Agent by 11:59 p.m. (New York City Time) on Wednesday, 22 June 2016 (the Expiration Deadline).

Notes validly tendered prior to the Withdrawal Deadline may be validly withdrawn at any time before 5 p.m. (New York City Time) on 8 June 2016 (the Withdrawal Deadline), but not thereafter, and Notes validly tendered after the Withdrawal Deadline are irrevocable, except (i) where the Offeror determines that additional withdrawal rights are required by law or (ii) in the limited circumstances described in "Amendment and Termination" in the Tender Offer Memorandum.

In order to be eligible to receive the Early Tender Premium, Noteholders must validly tender, and not validly withdraw, their Notes at or prior to 5.00 p.m. (New York City Time) on 8 June 2016 (the Early Tender Deadline).

Tender Consideration

In respect of any Notes validly tendered for purchase at or prior to the Early Tender Deadline and accepted for purchase pursuant to the Offer, the Offeror will pay a cash purchase price equal to the sum of (1) the product of (x) the Total Purchase Price and (y) the nominal amount of the Notes accepted for purchase, divided by U.S.$1,000; and (2) the Accrued Interest Amount in respect of such Notes; rounded, if necessary, to the nearest U.S.$0.01, with half a cent being rounded upwards.

In respect of any Notes validly tendered for purchase after the Early Tender Deadline and at or prior to the Expiration Deadline and accepted for purchase pursuant to the Offer, the Offeror will pay a cash purchase price equal to the sum of (1) the product of (x) the Purchase Price; and (y) the nominal amount of the Notes accepted for purchase, divided by U.S.$1,000; and (2) the Accrued Interest Amount in respect of such Notes; rounded, if necessary, to the nearest U.S.$0.01, with half a cent being rounded upwards.

Determination of Total Purchase Price and Purchase Price

The Total Purchase Price will be determined at the Pricing Time in accordance with market convention and will be the price, expressed as an amount per U.S.$1,000 nominal amount of the Notes, which reflects the yield to 24 May 2021 (being the First Interest Rate Reset Date of the Notes) on the Early Tender Settlement Date equal to the sum (such sum, the Purchase Yield) of (a) the Benchmark Security Rate and (b) the Purchase Spread.  Specifically, the Total Purchase Price will equal (a) the sum of all remaining payments of principal and interest on the Notes up to and including 24 May 2021, discounted to the Early Tender Settlement Date at a discount rate equal to the Purchase Yield, minus (b) Accrued Interest (expressed as an amount per U.S.$1,000 nominal amount of the Notes) to (but excluding) the Early Tender Settlement Date.

The price to be paid by the Offeror for Notes validly tendered after the Early Tender Deadline is equal to the Total Purchase Price less the Early Tender Premium and is referred to herein as the Purchase Price.

Accrued Interest

The Offeror will also pay accrued and unpaid interest on the Notes from (and including) the immediately preceding interest payment date for the Notes to (but excluding) either (i) the Early Tender Settlement Date in the case of Notes validly tendered for purchase at or prior to the Early Tender Deadline and accepted for purchase or (ii) the Final Settlement Date in the case of Notes validly tendered for purchase after the Early Tender Deadline and at or prior to the Expiration Deadline and accepted for purchase (Accrued Interest).

Acceptance and Pro Rata Allocations

Subject to compliance with the terms of the Offer, the Offeror proposes to accept up to the Maximum Acceptance Amount of Notes for purchase pursuant to the Offer. If the aggregate nominal amount of Notes validly tendered for purchase pursuant to the Offer is greater than the Maximum Acceptance Amount, the Offeror intends to accept such validly tendered Notes on a pro rata basis such that the aggregate nominal amount of such Notes accepted for purchase is no greater than the Maximum Acceptance Amount. In such circumstances, each such tender of Notes will be scaled by a pro rata factor equal to (i) the Maximum Acceptance Amount, divided by (ii) the aggregate nominal amount of the Notes that have been validly tendered. Each tender of Notes that is scaled in this manner will be rounded down to the nearest U.S.$1,000.

Depending on the amount tendered and the pro rata factor applied, if (i) the nominal amount of Notes validly tendered for purchase would, as a result of pro-ration, be less than U.S.$200,000 (the Minimum Denomination) or (ii) the nominal amount of Notes returned to a Noteholder as a result of pro-ration would result in less than the Minimum Denomination being returned to such Noteholder, the Offeror will reject all of such Noteholder's validly tendered Notes.

Notwithstanding the foregoing, if the aggregate nominal amount of Notes validly tendered for purchase pursuant to the Offer as of the Early Tender Deadline is equal to or greater than the Maximum Acceptance Amount, the pro rata allocation will be made solely with respect to Notes validly tendered for purchase prior to the Early Tender Deadline, and Noteholders who tender Notes after the Early Tender Deadline will not have any of their Notes accepted for purchase.

Notes that are not successfully tendered for purchase pursuant to the Offer will remain outstanding.

Indicative Timetable for the Offer

The above times and dates are subject to the right of the Offeror to extend, re-open, amend and/or terminate the Offer (subject to applicable law and as provided in the Tender Offer Memorandum) as described in the Tender Offer Memorandum.

Noteholders are advised to read carefully the Tender Offer Memorandum for full details of, and information on the procedures for participating in the Offer.

The Hongkong and Shanghai Banking Corporation Limited, Morgan Stanley & Co. LLC and National Australia Bank Limited are acting as Dealer Managers and D.F. King & Co., Inc. is acting as Tender Agent.

Further Information

Questions and requests for assistance in connection with the Offer may be directed to the Dealer Managers:

Questions and requests for assistance in connection with the tender of Notes including requests for a copy of the Tender Offer Memorandum may be directed to the Tender Agent.

DISCLAIMER This announcement must be read in conjunction with the Tender Offer Memorandum.  The Tender Offer Memorandum contains important information which should be read carefully before any decision is made with respect to the Offer.  If any Noteholder is in any doubt as to the action it should take, it is recommended to seek its own financial advice, including in respect of any tax consequences, from its broker, bank manager, solicitor, accountant or other independent financial, tax or legal adviser.  Any individual or company whose Notes are held on its behalf by a broker, dealer, bank, custodian, trust company or other nominee must contact such entity if it wishes to tender such Notes pursuant to the Offer. None of the Offeror, the Dealer Managers, the Tender Agent or the Company makes any recommendation as to whether Noteholders should tender Notes pursuant to the Offer.

OFFER AND DISTRIBUTION RESTRICTIONS

The distribution of this announcement and the Tender Offer Memorandum in certain jurisdictions may be restricted by law.  Persons into whose possession this announcement and/or the Tender Offer Memorandum comes are required by each of the Offeror, the Dealer Managers, the Company and the Tender Agent to inform themselves about and to observe any such restrictions.  Neither this announcement nor the Tender Offer Memorandum constitutes an offer to buy or a solicitation of an offer to sell Notes (and tenders of Notes in the Offer will not be accepted from Noteholders) in any circumstances in which such offer or solicitation is unlawful.  In any jurisdiction where the securities, blue sky or other laws require the Offer to be made by a licensed broker or dealer and any of the Dealer Managers or any of their respective affiliates is such a licensed broker or dealer in such jurisdiction, the Offer shall be deemed to be made by such Dealer Manager or such affiliate, as the case may be, on behalf of the Offeror in such jurisdiction.

Australia. None of the Offer, this announcement, the Tender Offer Memorandum, prospectus or other disclosure document (as defined in the Corporations Act 2001 (Cth) (Corporations Act) of Australia) in relation to the Offer has been or will be lodged with the Australian Securities and Investments Commission (ASIC) or any other regulatory authority in Australia and the Tender Offer Memorandum does not comply with Division 5A of Part 7.9 of the Corporations Act. 

In addition, the Tender Offer Memorandum and any other offering material or advertisement relating to the Offer will not be distributed or published in Australia, unless:

(i) such action complies with all applicable laws, directives and regulations (including, without limitation, the licensing requirements set out in Chapter 7 of the Corporations Act);

(ii) such action does not require any document to be lodged with ASIC or any other regulatory authority in Australia; and

(iii) the offer or invitation is made in circumstances specified in Corporations Regulation 7.9.97.

If you are a resident of Australia, you have been sent the Tender Offer Memorandum on the basis that you are (A) a person to whom Corporations Regulation 7.9.97 applies and (B) a "wholesale client" for the purposes of Section 761G of the Corporations Act or otherwise a person to whom disclosure is not required under Part 6D.2 or Chapter 7 of the Corporations Act.

EEA. The Offer is not being made in any Member State of the European Economic Area which has implemented the Prospectus Directive, other than to persons who are "qualified investors" for the purposes of Article 3(2)(a) of the Prospectus Directive, or in other circumstances falling within Article 3(2) of the Prospectus Directive.

France.  The Offer is not being made, directly or indirectly, to the public in the Republic of France (France).  None of this announcement, the Tender Offer Memorandum or any other document or material relating to the Offer has been or shall be distributed to the public in France and only (i) providers of investment services relating to portfolio management for the account of third parties (personnes fournissant le service d'investissement de gestion de portefeuille pour compte de tiers) and/or (ii) qualified investors (investisseurs qualifiés), other than individuals, acting for their own account, all as defined in, and in accordance with, Articles L.411-1, L.411-2 and D.411-1 to D.411-3 of the French Code monétaire et financier, are eligible to participate in the Offer.  Neither this announcement nor the Tender Offer Memorandum have been or will be submitted for clearance to or approved by the Autorité des Marchés Financiers.

Hong Kong. The Offer is not being made, directly or indirectly, to the public in Hong Kong.  Neither of this announcement, the Tender Offer Memorandum nor any other documents or materials relating to the Offer have been or shall be distributed to persons other than "professional investors" as defined in the Securities and Futures Ordinance (Cap. 571) of Hong Kong and any rules made under that Ordinance, or  in circumstances which would result in this document being a "prospectus" as defined in the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32) of Hong Kong or which would constitute an offer to the public or an invitation of offers by the public in Hong Kong within the meaning of that Ordinance.  Only "professional investors" as defined in the Securities and Futures Ordinance (Cap. 571) of Hong Kong and any rules made under that Ordinance are eligible to participate in the Offer.

Italy.  None of the Offer, this announcement, the Tender Offer Memorandum and any other document or materials relating to the have been submitted to the clearance procedures of the Commissione Nazionale per le Società e la Borsa (CONSOB) pursuant to Italian laws and regulations. The Offer is being carried out in Italy as an exempted offer pursuant to article 101-bis, paragraph 3-bis of the Legislative Decree No. 58 of 24 February 1998, as amended (the Financial Services Act) and article 35-bis, paragraph 4, letter b) of CONSOB Regulation No. 11971 of 14 May 1999, as amended.

Noteholders or beneficial owners of the Notes that are located in Italy can tender Notes for purchase in the Offer through authorised persons (such as investment firms, banks or financial intermediaries permitted to conduct such activities in the Republic of Italy in accordance with the Financial Services Act, CONSOB Regulation No. 16190 of 29 October 2007, as amended from time to time, and Legislative Decree No. 385 of 1 September 1993, as amended) and in compliance with applicable laws and regulations or with requirements imposed by CONSOB or any other Italian authority. Each intermediary must comply with the applicable laws and regulations concerning information duties vis-à-vis its clients in connection with the Notes or the Tender Offer Memorandum.

Japan. No securities registration has been, or shall be, made in relation to the Offer under the Financial Instruments and Exchange Law of Japan (Law No. 25 of 1948, as amended: the FIEA). Accordingly, the Offer has not, directly or indirectly, been offered or sold and shall not, directly or indirectly, be offered or sold in Japan or to or for the benefit of a resident of Japan (as defined in Item 5, Paragraph 1, Article 6 of the Foreign Exchange and Foreign Trade Act No. 228 of 1949, as amended), or to others for re-offering or re-sale, directly or indirectly, in Japan, or to or for the benefit of any resident of Japan, except pursuant to an exemption from the registration requirements of, and otherwise in compliance with the FIEA and other relevant laws, regulations and ministerial guidelines of Japan.

Singapore. Neither this announcement nor the Tender Offer Memorandum have been and will not be registered as a prospectus with the Monetary Authority of Singapore. The Offer does not constitute a public tender offer for the purchase of the Notes nor an offering of securities in Singapore pursuant to the Securities and Futures Act, Chapter 289 of Singapore.

Switzerland. None of this announcement, the Tender Offer Memorandum or any other document or material relating to the Offer constitutes a prospectus as such term is understood pursuant to article 652a or article 1156 of the Swiss Federal Code of Obligations or a listing prospectus within the meaning of the listing rules of the SIX Swiss Exchange or any other regulated trading facility in Switzerland. Accordingly, the investor protection rules otherwise applicable to investors in Switzerland do not apply to the Offer.  When in doubt, investors based in Switzerland are recommended to contact their legal, financial or tax adviser with respect to the Offer.

United Kingdom.  This announcement and the Tender Offer Memorandum and any other documents or materials relating to the Offer are not being made by, and such documents and/or materials have not been approved by, an authorised person for the purposes of section 21 of the Financial Services and Markets Act 2000. 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. The communication of such documents and/or materials as a financial promotion is only being made to those persons in the United Kingdom falling within the definition of investment professionals (as defined in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the Order) or to persons falling within Article 43(2) of the Order, or to other persons to whom it may otherwise lawfully be made in accordance with the Order.

SOURCE The Hongkong and Shanghai Banking Corporation Limited