RBS.L Regulatory News (RBS)

NOT FOR DISTRIBUTION IN OR INTO OR TO ANY PERSON LOCATED OR RESIDENT IN THE UNITED STATES, ITS TERRITORIES AND POSSESSIONS (INCLUDING PUERTO RICO, THE U.S. VIRGIN ISLANDS, GUAM, AMERICAN SAMOA, WAKE ISLAND AND THE NORTHERN MARIANA ISLANDS), ANY STATE OF THE UNITED STATES OR THE DISTRICT OF COLUMBIA (THE "UNITED STATES") OR IN ANY JURISDICTION WHERE IT IS UNLAWFUL TO RELEASE, PUBLISH OR DISTRIBUTE THIS DOCUMENT.

30 March 2016

THE ROYAL BANK OF SCOTLAND GROUP PLC AND THE ROYAL BANK OF SCOTLAND PLC LAUNCH CASH TENDER OFFERS FOR CERTAIN EURO AND POUNDS STERLING NOTES

The Royal Bank of Scotland Group plc ("RBSG plc" and, together with its consolidated subsidiaries, the "Group") and The Royal Bank of Scotland plc ("RBS plc") (each an "Offeror", and together the "Offerors") have today separately invited Holders of the notes issued by them and listed below (together the "Notes", and each a "Series") to tender their Notes for purchase by the relevant Offeror for cash (each an "Offer", and together, the "Offers") on the terms of, and subject to the conditions contained in, a tender offer memorandum dated 30 March 2016 (the "Tender Offer Memorandum"). Capitalised terms used but not otherwise defined in this announcement have the same meaning as assigned to them in the Tender Offer Memorandum. Copies of the Tender Offer Memorandum are (subject to distribution restrictions) available from the Tender Agent as set out below.

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

Rationale for the Offers

The Offerors have today also invited holders of certain U.S. dollar denominated debt securities to tender those securities issued by them for purchase (the "U.S. Offers"). Only the Offers are being made by the Tender Offer Memorandum, which does not relate to the U.S. Offers.

The Offers and the U.S. Offers are made as part of the Offerors' ongoing liability management, with the intention of supporting the Group's ongoing transition to a holding company capital and term funding model in line with regulatory requirements.

The Offerors intend to manage their overall liability composition and mix for value. In this regard, each Offeror considers future interest expense with reference to its balance sheet whilst maintaining a prudent approach to liquidity and costs.

The Group is offering relevant holders of RBS plc's Notes a further opportunity to tender their Notes. RBS plc is intended to be one of the future non-ringfenced banking entities of the Group.

The Offers are not conditional upon any future capital markets issuance.

Purchase Prices and Accrued Interest Payments

In respect of each Series, the relevant Offeror will pay for any Notes of the relevant Series validly tendered and accepted by it for purchase, pursuant to the relevant Offer, a purchase price (each a "Purchase Price") to be determined at or around 11.00 a.m. (London time) (the "Pricing Time") on 7 April 2016 (the "Pricing Date") in a manner described in the Tender Offer Memorandum by reference to:

(i) in respect of each Series of Notes described in the table above under the heading "Fixed Yield Notes", the fixed purchase yield of 0.000 per cent. (the "Fixed Purchase Yield"); and

(ii) in respect of each Series of Notes described in the table above under the heading "Fixed Spread Notes" (each such Series of Notes, a "Fixed Spread Series"), the sum (such sum to be annualised in the case of the Sterling Notes due 2017, the Sterling Notes due 2025 and the Sterling Notes due 2028) (such sum, in respect of each relevant Fixed Spread Series, the "Fixed Spread Note Purchase Yield") of:

(x) the relevant Fixed Purchase Spread specified in the table above; and

(y) the relevant Benchmark Rate.

Each Purchase Price will be determined in accordance with market convention and expressed as a percentage of the principal amount of the Notes of the relevant Series accepted for purchase pursuant to the relevant Offer, and is intended to reflect a yield to maturity of the Notes of the relevant Series on the Settlement Date based on the relevant Purchase Yield. Specifically, the Purchase Price applicable to the Notes of a particular Series will equal (a) the value of all remaining payments of principal and interest on the relevant Series up to and including the scheduled maturity date of the relevant Series, discounted to the Settlement Date at a discount rate equal to the relevant Purchase Yield, minus (b) Accrued Interest for such Series.

The relevant Offeror will also pay an Accrued Interest Payment in respect of Notes accepted for purchase by it pursuant to the Offers.

No Scaling

In respect of any Series, if the relevant Offeror decides to accept valid tenders of any Notes of such Series for purchase pursuant to the relevant Offer, it will accept for purchase all of the Notes of such Series that are validly tendered, with no pro rata scaling.

General

In respect of all Offers, Tender Instructions must be submitted in respect of a minimum principal amount of Notes of the relevant Series of no less than the minimum denomination for such Series and may thereafter be submitted in integral multiples of the relevant amount in each case as set out in the Tender Offer Memorandum.

Notes that are not tendered or accepted for purchase pursuant to the relevant Offer will remain outstanding.

Each Offeror may, in its sole discretion, extend, re-open, amend, waive any condition of or terminate any Offer made by it at any time (subject to applicable law and as provided in the Tender Offer Memorandum). Details of any such extension, re-opening, amendment, waiver or termination will be announced as provided in the Tender Offer Memorandum as soon as reasonably practicable after the relevant decision is made.

Offer Period and Offer Results

The Offers commenced today, 30 March 2016 and will end at 4.00 p.m. (London time) on 6 April 2016 (the "Expiration Deadline")

The relevant deadline set by any intermediary or each Clearing System will be earlier than this deadline.

The Offerors will announce, as soon as reasonably practicable after the Pricing Time on the Pricing Date, their decision of whether to accept valid tenders of Notes pursuant to all or any of the Offers and, if so accepted, (i) in respect of each Series of Notes so accepted, the aggregate principal amount of Notes of the relevant Series so accepted and the relevant Purchase Price and (ii) in respect of each Series of Fixed Spread Notes so accepted, the relevant Fixed Spread Note Purchase Yield and the relevant Benchmark Rate.

Payment of the relevant Purchase Price and applicable Accrued Interest is expected to take place on 11 April 2016.

In order to participate in, and be eligible to receive the relevant Purchase Price and Accrued Interest Payment pursuant to the relevant Offer, Holders 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 the Expiration Deadline.

Tender Instructions will be irrevocable except in the limited circumstances described in the Tender Offer Memorandum. A separate Tender Instruction must be completed in respect of each Series.

Unless stated otherwise, announcements in connection with the Offers will be made (i) by publication through RNS and, in respect of the Sterling Notes due 2028, a Euronext Amsterdam Announcement and (ii) by the delivery of notices to the Clearing Systems for communication to Direct Participants. Such announcements may also be made (a) on the relevant Reuters Insider Screen, (b) by the issue of a press release to a Notifying News Service and/or (c) by publication on RBSG plc's website. Copies of all such announcements, press releases and notices can also be obtained upon request from the Tender Agent, the contact details for which are set out at the end of this announcement.

EXPECTED TIMETABLE

The times and dates below are indicative only. This timetable is subject to change and dates and times may be extended, reopened or amended by the Offerors in accordance with the terms of the Offers as described in the Tender Offer Memorandum. Accordingly, the actual timetable may differ from the timetable below.

Holders are advised to check with any bank, securities broker or other intermediary through which they hold Notes when such intermediary would need to receive instructions from a Holder in order for that Holder to be able to participate in, or (in the limited circumstances in which revocation is permitted) revoke their instruction to participate in, an Offer before the deadlines specified above.

FURTHER INFORMATION

Lucid Issuer Services Limited has been appointed by the Offerors as Tender Agent (the "Tender Agent") for the purposes of the Offers.

The Royal Bank of Scotland plc has been appointed as Global Arranger and Lead Dealer Manager and Goldman Sachs International has been appointed as Dealer Manager (together with the Global Arranger and Lead Dealer Manager and any entity that may subsequently be appointed as a co-dealer manager in connection with the Offers, the "Dealer Managers") in connection with the Offers.

Requests for information and for any documents or materials relating to the Offers should be directed to:

Requests for information in relation to the procedures for tendering Notes in, and for any documents or materials relating to, the Offers should be directed to:

DISCLAIMER

This announcement must be read in conjunction with the Tender Offer Memorandum. This announcement and the Tender Offer Memorandum contain important information which must be read carefully before any decision is made with respect to the Offers. If any holder of Notes is in any doubt as to the action it should take, it is recommended to seek its own legal, tax, accounting and financial advice, including as to any tax consequences, from its broker, bank manager, solicitor, accountant or other independent financial 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 participate in the Offers. None of the Offerors, the Dealer Managers, the Tender Agent and any person who controls, or is a director, officer, employee or agent of such persons, or any affiliate of such persons, makes any recommendation as to whether holders of Notes should participate in the Offers.

OFFER AND DISTRIBUTION RESTRICTIONS

This announcement and the Tender Offer Memorandum do not constitute an offer or an invitation to participate in the Offers in the United States or in any other jurisdiction in which, or to any person to or from whom, it is unlawful to make such offer or invitation or for there to be such participation under applicable securities laws. The distribution of this announcement and/or 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 Offerors, the Dealer Managers and the Tender Agent to inform themselves about, and to observe, any such restrictions.

United States

The Offers are not being made, and will not be made, directly or indirectly in or into, or by use of the mails of, or by any means or instrumentality of interstate or foreign commerce of or of any facilities of a national securities exchange of, the United States. This includes, but is not limited to, facsimile transmission, electronic mail, telex, telephone, the internet and other forms of electronic communication. The Notes may not be tendered in the Offers by any such use, means, instrumentality or facility from or within the United States or by persons located or resident in the United States. Accordingly, copies of this announcement, the Tender Offer Memorandum and any other documents or materials relating to the Offers are not being, and must not be, directly or indirectly mailed or otherwise transmitted, distributed or forwarded (including, without limitation, by custodians, nominees or trustees) in or into the United States or to any persons located or resident in the United States. Any purported tender of Notes in the Offers resulting directly or indirectly from a violation of these restrictions will be invalid and any purported tender of Notes made by, or by any person acting for the account or benefit of, a person located in the United States or any agent, fiduciary or other intermediary acting on a non-discretionary basis for a principal giving instructions from within the United States will be invalid and will not be accepted.

Each holder of Notes participating in an Offer will represent that it is not located in the United States and is not participating in such Offer from the United States, or it is acting on a non-discretionary basis for a principal located outside the United States that is not giving an order to participate in such Offer from the United States. For the purposes of this and the above paragraph, "United States" means the United States of America, its territories and possessions (including Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the Northern Mariana Islands), any state of the United States of America and the District of Columbia.

United Kingdom

This announcement, the Tender Offer Memorandum and any other documents or materials relating to the Offers have not been approved by an authorised person for the purposes of section 21 of the Financial Services and Markets Act 2000 (the "FSMA"). 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 is exempt from the restriction on financial promotions under section 21 of the FSMA on the basis that it is only directed at and may only be communicated to (i) those persons who are existing members or creditors of either Offeror or other persons within Article 43 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 and (ii) any other persons to whom these documents and/or materials may lawfully be communicated.

Neither this announcement nor the Tender Offer Memorandum is addressed to or directed at any other person, including any retail clients within the meaning of the rules, regulations and guidance issued by the Financial Conduct Authority and such other persons should not act or rely upon it.

Belgium

None of this announcement, the Tender Offer Memorandum or any other documents or materials relating to the Offers have been submitted to or will be submitted for approval or recognition to the Financial Services and Markets Authority (Autorité des services et marchés financiers / Autoriteit financiële diensten en markten) and, accordingly, the Offers may not be made in Belgium by way of a public offering, as defined in Articles 3 and 6 of the Belgian Law of 1 April 2007 on public takeover bids as amended or replaced from time to time. Accordingly, the Offers may not be advertised and the Offers will not be extended, and none of this announcement, the Tender Offer Memorandum or any other documents or materials relating to the Offers (including any memorandum, information circular, brochure or any similar documents) has been or shall be distributed or made available, directly or indirectly, to any person in Belgium other than "qualified investors" in the sense of Article 10 of the Belgian Law of 16 June 2006 on the public offer of placement instruments and the admission to trading of placement instruments on regulated markets, acting on their own account. This announcement and/or the Tender Offer Memorandum have been issued only for the personal use of the above qualified investors and exclusively for the purpose of the Offers. Accordingly, the information contained in this announcement and/or the Tender Offer Memorandum may not be used for any other purpose or disclosed to any other person in Belgium.

France

The Offers are 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 Offers 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 of the French Code monétaire et financier, are eligible to participate in the Offers. Neither this announcement nor the Tender Offer Memorandum has been or will be submitted for clearance to nor approved by the Autorité des Marchés Financiers.

Italy

None of the Offers, this announcement, the Tender Offer Memorandum or any other document or materials relating to the Offers has been or will be submitted to the clearance procedures of the Commissione Nazionale per le Società e la Borsa ("CONSOB") pursuant to Italian laws and regulations.

Each 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 of CONSOB Regulation No. 11971 of 14 May 1999, as amended. Holders or beneficial owners of the Notes that are located in Italy can tender Notes for purchase in the Offers through authorised persons (such as investment firms, banks or financial intermediaries permitted to conduct such activities in 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 Offers.

Switzerland

None of this announcement, the Tender Offer Memorandum or any other offering or marketing material relating to the Notes 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. Accordingly, the investor protection rules otherwise applicable to investors in Switzerland do not apply to the Offers. When in doubt, investors based in Switzerland are recommended to contact their legal, financial or tax adviser with respect to the Offers.

General

The Offers do not constitute an offer to buy or the solicitation of an offer to sell Notes in any circumstances in which such offer or solicitation is unlawful. In those jurisdictions where the securities or other laws require the Offers to be made by a licensed broker or dealer and any of the Dealer Managers or, where the context so requires, any of their respective affiliates is such a licensed broker or dealer in that jurisdiction, the Offers shall be deemed to be made on behalf of the relevant Offeror by such Dealer Manager or affiliate (as the case may be) in such jurisdiction.

In addition to the representations referred to above in respect of the United States, each Holder participating in an Offer will also be deemed to give certain representations in respect of the other jurisdictions referred to above and generally as set out in "Procedures for Participating in the Offers" in the Tender Offer Memorandum. Any tender of Notes for purchase pursuant to an Offer from a Holder that is unable to make these representations may be rejected. Each of the Offerors, the Dealer Managers and the Tender Agent reserves the right, in their absolute discretion, to investigate, in relation to any tender of Notes for purchase pursuant to an Offer, whether any such representation given by a Holder is correct and, if such investigation is undertaken and as a result the relevant Offeror determines (for any reason) that such representation is not correct, such tender may be rejected.