ING May Avoid Bond-Sale Hangover After CEO Departure Wrecks Deal

(Bloomberg) -- ING Groep NV may face little investor pushback if it revives a sale of risky bonds that was derailed by the sudden exit of Chief Executive Officer Ralph Hamers.

“We don’t expect the bank to encounter any hurdles when it comes back,” said Sohail Malik, co-chief investment officer and portfolio manager at Roxbury Asset Management, which doesn’t hold ING AT1s. “The market has digested this now.”

Shares and bonds of ING stabilized on Thursday as the news of Hamers’s move to UBS Group AG provided a reason for the postponement of the Additional Tier 1 sale. Securities dropped in the wake of Wednesday’s unexplained postponement, which came even after investors had placed more than $11 billion of orders in the $1 billion offering.

“Things didn’t turn out as bad as many have feared,” said Michael Huenseler, a portfolio manager at Assenagon Asset Management, which owns some ING AT1s. “But, I’d still call it highly unusual.”

A spokesman for ING declined to comment on the bank’s AT1 plans, including on whether issuance would have to wait for a new or interim CEO.

Investors have previously shown appetite for deals halted amid much greater uncertainty than that facing ING. Danske Bank A/S completed a sale of dollar senior non-preferred bonds in January 2019, days after a delay caused by money-laundering revelations.

ING also has a $1 billion 6% AT1 callable on April 16. It will need to give holders 30 days’ notice if it intends to use this redemption option.

The note is trading around par, suggesting investors still expect a call. The bank’s comfortable AT1 buffer means it can redeem the old bond even without selling a new one, according to Simon Adamson, chief executive at CreditSights, a research company.

Still, the lender will likely press ahead with the planned sale, potentially with a small coupon boost as a goodwill gesture, he said.

“I don’t think the CEO news will have much -- if any -- impact on them issuing,” said Adamson. “A change of CEO tends not to rattle the bond market, unless there’s a bigger story behind it.”

To contact the reporter on this story: Alice Gledhill in London at agledhill@bloomberg.net

To contact the editors responsible for this story: Hannah Benjamin at hbenjamin1@bloomberg.net, Neil Denslow, V. Ramakrishnan

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