F&C plans debt exchange to boost balance sheet

F&C has made a debt exchange offer to holders of its £260m in subordinated notes, in a move aimed at reducing its gross and net debt.

The recently independent F&C hopes the move will knock off £32.5m from its gross and net debt, further strengthening the group's balance sheet. The planned transaction would see a swap of up to 50% of the existing loan notes, which have a 6.75% coupon and are currently trading at a price below par value, for new senior notes. The new notes will hold a fixed coupon of 9%, be repayable in 2016. If successful, F&C says the proposed transaction would crystallise an accounting profit.