MCLEAN, Va.--(BUSINESS WIRE)--Feb. 6, 2013-- Capital One Financial Corporation (NYSE: COF) announced today that its subsidiary, Capital One Bank (USA), National Association (“COBNA”) priced its previously announced offer to exchange any and all of its outstanding 8.80% Subordinated Notes due 2019 (the “Old Notes”) for a combination of new Subordinated Notes due 2023 (the “New Notes”) and cash. The pricing terms were determined as of the price determination date, which was 11:00 a.m., New York City time, on February 6, 2013, in accordance with the terms set out in the Confidential Offering Circular for the exchange offer, dated January 23, 2013, and related letter of transmittal.

The interest rate on the New Notes will be 3.375%. The “New Issue Yield” (as defined in the Confidential Offering Circular) on the New Notes will be 3.387% and the “New Notes Value” (as defined in the Confidential Offering Circular) of the New Notes will be $1,198.78. These amounts were determined by reference to the bid-side yield on the 1.625% U.S. Treasury Note due November 15, 2022, as of the price determination date, which was 1.987%.

The total exchange price to be received in the exchange offer for each $1,000 in aggregate principal amount of the Old Notes validly tendered, and not validly withdrawn, at or prior to the early participation date (5:00 p.m., New York City time, on February 5, 2013), is set forth in the table below. The total exchange price includes the early exchange premium of $30.00 per $1,000 principal amount of the Old Notes validly tendered, and not validly withdrawn, at or prior to the early participation date. The total exchange price for the exchange offer has been determined in accordance with the procedures set forth in the Confidential Offering Circular. Holders of Old Notes that validly tender Old Notes after the early participation date and whose Old Notes are accepted in the exchange offer will receive the exchange price, which is the total exchange price less the early exchange premium.

The table below shows, among other things, the total exchange price and exchange price per $1,000 principal amount of the Old Notes accepted in the exchange offer:

The total exchange price for the exchange offer will be paid in the following manner:

• $1,200.00 principal amount of New Notes; plus
• $174.07 in cash (which is equal to (a) the total exchange price for the exchange offer minus (b) the New Notes Value).

The exchange price for the exchange offer will be paid in the following manner:

• $1,200.00 principal amount of New Notes; plus
• $144.07 in cash (which is equal to (a) the total exchange price for the exchange offer less the early exchange premium minus (b) the New Notes Value).

In addition to the applicable total exchange price or exchange price, holders whose Old Notes are accepted for exchange will be paid accrued and unpaid interest on such Old Notes to but not including the applicable settlement date. In the case of Old Notes exchanged on the final settlement date, this amount will be reduced to reflect embedded interest on the New Notes as described in the Confidential Offering Circular.

The exchange offer will expire at the expiration date, which will be 11:59 p.m., New York City time, on February 20, 2013, unless extended or earlier terminated by COBNA.

The early settlement date is expected to be February 11, 2013 and will apply to all Old Notes validly tendered and accepted for exchange pursuant to the terms and conditions of the exchange offer as of the early participation date. The final settlement date is expected to be February 22, 2013 and will apply to all Old Notes validly tendered and accepted for exchange pursuant to the terms and conditions of the exchange offer after the early participation date but at or prior to the expiration date.

The exchange offer is being conducted by COBNA upon the terms and subject to the conditions set forth in a Confidential Offering Circular, dated January 23, 2013, and related letter of transmittal. The exchange offer is only extended, and copies of the offering documents will only be made available, to holders of Old Notes that have certified that such holder (1) is an institutional investor that is an “accredited investor” within the meaning of subparagraph (a)(1), (2), (3) or (7) of Rule 501 under the Securities Act of 1933, as amended (the “Securities Act”), and (2) will hold at all times an undivided beneficial interest in the New Notes in a principal amount not less than $250,000 (such holder, an “Eligible Holder”). Only Eligible Holders are authorized to receive or review the Confidential Offering Circular or to participate in the exchange offer.

The exchange offer is subject to the condition that a minimum of $500 million aggregate principal amount of New Notes be issued in exchange for Old Notes, as well as certain other conditions as described in the Confidential Offering Circular. Based on information provided by D.F. King & Co., Inc., the exchange agent for the exchange offer, the aggregate principal amount of the Old Notes validly tendered for exchange and not validly withdrawn as of the early participation date satisfies this minimum size condition.

Documents relating to the exchange offer will only be distributed to holders of the Old Notes that complete and return a letter of eligibility confirming that they are Eligible Holders. Holders of the Old Notes that desire to review the eligibility letter may visit the website for this purpose at http://www.dfking.com/capitalone or contact D.F. King & Co., Inc., the information agent for the exchange offer, by calling toll-free (800) 290-6427 or at (212) 269-5550 (banks and brokerage firms).

Credit Suisse Securities (USA) LLC and Deutsche Bank Securities Inc. are serving as lead dealer managers in connection with the exchange offer. For additional information regarding the terms of the exchange offer, please contact the lead dealer managers: Credit Suisse Securities (USA) LLC at +1 (800) 820-1653 (toll free) or +1 (212) 538-2147 (collect) or Deutsche Bank Securities Inc. at +1 (855) 287-1922 (toll free) or +1 (212) 250-7527 (collect).

This press release is not an offer to sell or a solicitation of an offer to buy any security. The exchange offer is being made solely by the Confidential Offering Circular and related letter of transmittal and only to such persons and in such jurisdictions as is permitted under applicable law. In particular, this communication is only addressed to and directed at Eligible Holders. COBNA is not required to register the New Notes with the Securities and Exchange Commission under the Securities Act. COBNA is offering and issuing the New Notes pursuant to the terms and regulations issued by the Office of the Comptroller of the Currency and in reliance upon an exemption provided by Section 3(a)(2) of the Securities Act.

This press release contains forward-looking statements which are subject to risks and uncertainties. The forward-looking statements contain words such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “will,” “may,” “likely” and similar expressions. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. COBNA undertakes no obligation to update or revise any forward-looking statements. Factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to, whether or not COBNA will ultimately consummate the exchange offer, the satisfaction of the conditions described in the Confidential Offering Circular and market conditions.

About Capital One

Capital One Financial Corporation (www.capitalone.com) is a financial holding company whose subsidiaries, which include Capital One, N.A., and Capital One Bank (USA), N.A., had $212.5 billion in deposits and $312.9 billion in total assets outstanding as of December 31, 2012. Headquartered in McLean, Virginia, Capital One offers a broad spectrum of financial products and services to consumers, small businesses and commercial clients through a variety of channels. Capital One, N.A. has more than 900 branch locations primarily in New York, New Jersey, Texas, Louisiana, Maryland, Virginia and the District of Columbia. A Fortune 500 company, Capital One trades on the New York Stock Exchange under the symbol "COF" and is included in the S&P 100 index.

About COBNA

Capital One Bank (USA), National Association (www.capitalone.com) is a banking association and a member of the Federal Reserve System. Capital One Bank (USA), National Association currently offers credit and debit card products, other lending products and deposit products. The deposits of Capital One Bank (USA), National Association are insured by the Deposit Insurance Fund of the FDIC up to applicable limits under the Federal Deposit Insurance Act (the “FDIA”). Capital One Bank (USA), National Association is among the largest issuers of Visa® and MasterCard® credit cards in the United States, based on managed credit card loans outstanding.

Source: Capital One Financial Corporation

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