LONDON – Royal Bank of Scotland, the parent company of Providence-based Citizens Financial Group, has announced it will buy back or exchange debt in order to improve its balance sheet.
According to Bloomberg News, RBS plans to buy back preferred shares and trust preferred securities worth 3.4 billion pounds ($5.2 billion at Tuesday’s exchange rate of 1.52827 U.S. dollars to the British pound). In addition, the Edinburgh, Scotland-based bank plans to exchange as much as 2.7 billion pounds ($4.1 billion) of subordinated debt for new senior debt.
“The rationale of the exchange offer and tender offers is to … further strengthen the quality of its capital base,” RBS said in today’s statement.
The bank is 84 percent controlled by the British treasury after receiving 45.5 billion pounds ($69.5 billion at Tuesday’s rate) in aid, and has since been forced to sell assets. As recently as last month, the bank was forced to deny rumors that it was planning to sell Citizens to Barclays Plc.
Additional information is available at citizensbank.com.
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