NEW ISSUE: Paragon Banking Group £175m 10NC5 Green T2; UKT+230a
IGC European Market: Deal Flow - General
Issuer
Term
Call
Maturity
Size
Ranking
Type
IPT
Paragon Banking Group
10NC5
5y
30-Sep-36
£175m
T2
Fixed Rate Reset
UKT+230a
IPTs: UKT+230a
Issuer: Paragon Banking Group plc
LEI: 213800S1TDKIB1IUTS72
Instrument: Fixed Rate Reset Callable Subordinated Tier 2 Green Notes
Issuer Ratings: Baa2 (stable) by Moody’s / BBB+ (stable) by Fitch
Expected Ratings of Issue: Baa3 (Moody’s) / BBB- (Fitch)
Status and Subordination: The Notes constitute direct, unsecured, unguaranteed and subordinated obligations of the Issuer and rank pari passu and without any preference among themselves. Upon a winding up or administration of the Issuer, the claims of Noteholders (a) are subordinated to the claims of Senior Creditors (being (i) unsubordinated creditors of the Issuer, (ii)subordinated creditors of the Issuer (other than those whose claims rank pari passu or junior, to claim of the Noteholders or are in respect of Tier 1 Capital and all classes of share capital of the Issuer or Tier 2 Capital) or (iii) creditors of secondary non-preferential debts, and (b) rank (i) at least pari passu with all other subordinated obligations which constitute Tier 2 Capital; and (ii) in priority to the claims of holders of Tier 1 Capital and all classes of share capital of the Issuer
Format: Standalone, Reg S, Registered
Size: £175m (expected)
IPTs: UKT+230bps area
Issue / Settlement Date: 21-Jul-26 (T+5)
Maturity: 30-Sep-36
First Call Date: 01-Aug-31
Reset Date: 30-Sep-31
Benchmark Reference Bond: UKT 0.250% Jul-31
Interest: The Notes will bear interest on their outstanding principal amount from (and including) the Issue Date to (but excluding) the Reset Date at a rate of [●] per cent. per annum. From (and including) the Reset Date to (but excluding) the Maturity Date (the Reset Period), the Notes will bear interest at a rate which is the aggregate of the margin of [●] per cent. and the relevant Reset Reference Rate
Interest Payment Dates: 30 March and 30 September in each year, commencing on 30 March 2027 (long first interest period)
Optional Redemption: Subject to PRA Permission and compliance with the Regulatory Preconditions, the Issuer may redeem the Notes, in whole but not in part, at par, plus accrued and unpaid interest, on any day (from and including) 1st August 2031 to (and including) the Reset Date
Redemption following a Tax Event or Regulatory Event: Subject to PRA Permission and compliance with the Regulatory Preconditions, the Issuer may redeem the Notes, in whole but not in part, at par, plus accrued and unpaid interest, at any time upon a Regulatory Event or a Tax Event
Issuer's Clean-up Call Option: Subject to PRA Permission and compliance with the Regulatory Preconditions, if, at any time, the outstanding aggregate principal amount of the Notes is 25 per cent. or less of the aggregate principal amount of the Notes, the Issuer may redeem all (but not some only) of the remaining outstanding Notes on any date at par plus accrued and unpaid interest
No set-off: Subject to applicable law, no Noteholder may exercise or claim or plead any right of set-off, compensation, counterclaim, retention or netting in respect of any amount owed to it by the Issuer in respect of, or arising under or in connection with, the Notes or the Trust Deed and each Noteholder will, by virtue of their holding of any Note (or any beneficial interest therein), be deemed, to the fullest extent permitted by applicable law, to have waived all such rights of set-off, compensation, counterclaim, retention and netting.
Bail-in: Agreement and Acknowledgement with Respect to the Exercise of Bail-in Power by the relevant UK Resolution Authority
Regulatory Event: Whole or partial de-recognition from Tier 2 Capital of the Group due to a change in regulatory classification
Tax Event: A change in the relevant tax laws or regulations resulting in, amongst other things, (i) loss of tax deductibility or (ii) requirement to pay additional amounts in respect of the Notes
Substitution / Variation: Subject to PRA Permission and compliance with the Regulatory Preconditions, where required, upon the occurrence of a Tax Event, Regulatory Event, the Issuer may at any time, in its sole discretion and without the consent of Holders, substitute all (but not some only) of the Notes for, or vary the terms of the Notes or the Trust Deed so that the Notes remain or become, Compliant Notes
Events of Default: In the event of non-payment of principal or interest on the Notes when due, the Trustee may (if so directed by Noteholders) institute proceedings for the winding up of the Issuer. The Notes may only be accelerated in the event of a Winding-Up Event
Selling Restrictions: Regulation S, not 144A eligible, as described in the Preliminary Offering Circular. Customary selling restrictions in the UK, EEA, Canada, Italy, Japan, Singapore and as more fully set out in the Preliminary Offering Circular
Clearing Systems: Euroclear and Clearstream, Luxembourg
Denominations: £100,000 and integral multiples of £1,000 in excess thereof
Expected Listing: Admission to trading on the International Securities Market (ISM) of the London Stock Exchange and the Sustainable Bond Market of the London Stock Exchange
Governing Law: English law
Use of Proceeds: Proceeds of the Notes will be on-lent to Paragon Bank plc by way of the Issuer purchasing an equivalent principal amount of tier 2 securities to be issued by Paragon Bank plc. Paragon Bank plc will use such proceeds for the general corporate purposes of the Group, which may include the refinancing of the Issuer's £150,000,000 4.375 per cent. Fixed Rate Reset Callable Subordinated Tier 2 Notes due 2031. An amount equal to the gross proceeds of the Notes will be down streamed to Paragon Bank. The Issuer also intends that an amount equal to the proceeds will be allocated in accordance with its Green Bond Framework for the financing and/or re-financing of Eligible Loans (as described more fully in the Preliminary Offering Circular)
Target Market: UK MiFIR product governance is eligible counterparties and professional clients only (all distribution channels). No EEA PRIIPs key information document (KID) or UK CCI product summary has been prepared as the Notes will not be made available to retail investors in the EEA or the UK. No sales to retail clients (as defined in the FCA COBS 3.4) in the UK