TIDM38DO TIDMTTM
RNS Number : 3908P
Thames Water Utilities Cayman Fin.
16 November 2016
THAMES WATER UTILITIES CAYMAN FINANCE LIMITED ANNOUNCES CONSENT
SOLICITATION
16 November 2016
Overview
Thames Water Utilities Cayman Finance Limited (the "Issuer")
today announced a consent solicitation in respect of the
GBP400,000,000 7.241 per cent. Guaranteed Class A Unwrapped
Puttable Callable Reset Bonds due 2058 (XS0356007012) issued by the
Issuer and unconditionally and irrevocably guaranteed by Thames
Water Utilities Limited, Thames Water Utilities Holdings Limited,
Thames Water Utilities Finance Limited and Thames Water Utilities
Cayman Finance Holdings Limited, issued under the Issuer's
GBP10,000,000,000 Multicurrency programme for the issuance of
Guaranteed Wrapped Bonds unconditionally and irrevocably guaranteed
as to scheduled payments of principal and interest pursuant to
financial guarantees issued by a Relevant Financial Guarantor and
Guaranteed Unwrapped Bonds financing Thames Water Utilities Limited
(the "Bonds").
Capitalised terms used in this announcement and not defined
herein shall have the meanings ascribed to them in the Solicitation
Memorandum dated 16 November 2016 (the "Solicitation
Memorandum").
Meeting of Bondholders
A meeting of Bondholders in respect of the Bonds to consider,
and if thought fit, pass the Extraordinary Resolution to approve
the Proposals and their implementation, shall take place at the
offices of Linklaters LLP, One Silk Street, London EC2Y 8HQ at 9:00
a.m. (London time) on 8 December 2016.
Bondholders who do not wish to attend the Meeting but who wish
to vote must take action on or prior to 4:00 p.m. (London time) on
5 December 2016 (the "Expiration Time"), subject to amendment,
extension or termination by the Issuer and any earlier deadlines
set by any intermediary through which such Bondholders hold their
Bonds.
Background to the Proposals
The proposals set out below form part of a broader strategy by
the Issuer to manage its refinancing risk in respect of the Bonds,
which are subject to an interest rate reset mechanism on 9 April
2018 (the "Reset/Put Date"), as further described below.
Under their current terms, the Bonds accrue a fixed interest
rate of 7.241 per cent. per annum until the Reset/Put Date. On and
from the Reset/Put Date, if certain conditions are satisfied, the
interest rate on the Bonds may be reset and the Bonds acquired from
the Bondholders and remarketed to new investors. In the event that
the relevant conditions are not satisfied, the Bonds will be
subject to the deemed exercise of an Investor Put Option (as
further described in the Final Terms), following which the Issuer
shall be required to redeem all Bonds in full in accordance with
the Final Terms.
The Bonds are further subject to an Assignable Call Option (as
further described in the Final Terms and the First Supplemental
Bond Trust Deed) which grants to the option holder the right to
acquire all of the Bonds in accordance with the terms of that
Assignable Call Option. Exercise of the Assignable Call Option is
one of the conditions to interest rate reset on the Bonds. The
interest reset procedure is described in paragraph 16 of the Final
Terms.
The initial holder of the Assignable Call Option is TWUL. TWUL
has granted two options (the "Low Strike Call Options") to Morgan
Stanley and RBS which grant to the option holders the right to take
an assignment of the Assignable Call Option.
In order to increase the flexibility of the timing of the
interest rate reset procedure, the Issuer proposes to amend the
terms of the Bonds so as to grant to Morgan Stanley (being one of
the holders of the Low Strike Call Option) an Investor Call Option
(as further described in the Consent Solicitation Memorandum). The
Investor Call Option shall grant to the option holder the right to
acquire, prior to the Reset/Put Date, all of the Bonds at the
Investor Call Option Purchase Price (as defined below). The
Investor Call Option Purchase Price is intended to compensate
Bondholders for their foregone return on the Bonds for the period
from settlement of the Investor Call Option to the Reset/Put
Date.
Morgan Stanley is not required to exercise the Investor Call
Option. However, if the Investor Call Option is exercised, the
Issuer and Morgan Stanley may enter into one or more transactions
which are intended to have the economic effect of applying a
pre-agreed rate of interest to the Bonds on and from the Reset/Put
Date. The potential transactions entered into by the Issuer and
Morgan Stanley may include a par-for-par exchange of the Bonds for
new GBP bonds issued by the Issuer which will accrue a pre-agreed
rate of interest (expected to be similar to the rate of interest on
the Bonds) until maturity on 9 April 2058.
If the Consent Solicitation is approved, the Issuer proposes to
add the Investor Call Option to the Final Terms and the Conditions.
The Investor Call Option will be in favour of Morgan Stanley and
will be exercisable by the payment of the Investor Call Option
Purchase Price. A Second Supplemental Bond Trust Deed and a Second
Supplemental Agency Agreement will also be executed to set out the
mechanics for exercise and settlement of the Investor Call Option.
Investor Call Option Purchase Price
The "Investor Call Option Purchase Price" means in respect of
each GBP100 of nominal value of Bonds, a price determined by a
financial adviser in London (selected by the Issuer acting in
consultation with Morgan Stanley & Co. International plc (the
"Investor Call Option Holder")) on the Investor Call Option Pricing
Date which is equal to the greater of GBP100 and the sum of A + B
where:
A = 107.241 / (1 + Y)(D1 / 365)
and
B = 7.241 / (1+Y)(D2 / 365)
if the Investor Call Option Settlement Date occurs prior to the
Interest Payment Date falling in 2017, or otherwise,
B = 0
where,
D1 = the number of days between the Investor Call Option
Settlement Date and the Reset / Put Date
D2 = the number of days between the Investor Call Option
Settlement Date and the Interest Payment Date falling in 2017
X = the Reference Yield on the Reference Gilt at or around 1.00
pm (London time) on the Investor Call Option Pricing Date
Y = (1 + X / 2)(2)
For the avoidance of doubt, the Investor Call Option Purchase
Price calculated as set out above includes an amount equal to
accrued but unpaid interest up to but excluding the Investor Call
Option Settlement Date.
The following definitions shall apply:
"Investor Call Option Exercise Date" means the date on which the
Investor Call Option Holder gives notice to the Bond Trustee, the
Issuer and the Principal Paying Agent in accordance with Clause
3.1.1 of the Second Supplemental Bond Trust Deed of the exercise of
the Investor Call Option, which may occur at any time up to (and
including) the day which is 7 Business Days prior to the Reset/Put
Date;
"Investor Call Option Pricing Date" means the date which is 5
Business Days following the Investor Call Option Exercise Date;
"Investor Call Option Settlement Date" means the date which is 7
Business Days following the Investor Call Option Exercise Date;
"Reference Gilt" means UKT 5 03/07/18, or where the financial
adviser advises the Issuer that, for reasons of illiquidity or
otherwise, such stock is not appropriate for such purposes, such
substitute as may be selected by the Issuer acting in consultation
with the Investor Call Option Holder; and
"Reference Yield" means the yield expressed as a percentage and
calculated on a basis consistent with the basis indicated by the
United Kingdom Debt Management Office publication "Formulae for
Calculating Gilt Prices from Yields" published 8 June 1998 with
effect from 1 November 1998 (as updated, supplemented, amended or
replaced from time to time) page 5 or any replacement thereof.
Further detail on the Proposals is set out below and in the
Solicitation Memorandum.
Priority Allocation in the New 2058 Bonds
If the Consent Solicitation is approved and the Issuer and
Morgan Stanley decide to proceed with the issuance of the New 2058
Bonds, then a Bondholder that submits an Electronic Voting
Instruction voting in favour of the Proposals and wishes to
subscribe for New 2058 Bonds can receive priority in the allocation
of such bonds (the "Priority Allocation"). The Priority Allocation
will be on the terms set out below.
Under the Priority Allocation, priority will be given to any
Bondholder that submits an Electronic Voting Instruction voting in
favour of the Proposals for a cash value of the New 2058 Bonds not
exceeding the aggregate principal amount of the Bonds in respect of
which the Electronic Voting Instruction was submitted by the
Bondholder (the "Priority Allocation Amount") and will be given in
preference to any other investor who is applying for purchase of
such New 2058 Bonds and did not submit an Electronic Voting
Instruction voting in favour of the Proposals.
The denominations of the New 2058 Bonds will be GBP100,000 (and
integral multiples of GBP1,000 in excess thereof up to and
including GBP199,000). Accordingly, in order for any priority in
the allocation of the New 2058 Bonds to be effective, Bondholders
will need to have a minimum of GBP100,000 in aggregate principal
amount of Notes in respect of which an Electronic Voting
Instruction voting in favour of the Proposals is submitted.
In order for a Bondholder to be eligible to receive a Priority
Allocation, a unique reference number (the "Allocation Identifier
Code") must be quoted in that Bondholder's Electronic Voting
Instruction. A Noteholder can obtain such an Allocation Identifier
Code by contacting Morgan Stanley using the contact details set out
on the back cover of this Solicitation Memorandum.
The quoting of an Allocation Identifier Code in conjunction with
any voting of Bonds in the Consent Solicitation is not an
allocation of the New 2058 Bonds. In order to apply for the
purchase of the relevant New 2058 Bonds, subject to the Consent
Solicitation being approved and the Issuer and Morgan Stanley
deciding to proceed with the issuance of the New 2058 Bonds, such
Bondholder must make a separate application to Morgan Stanley for
the purchase of such New 2058 Bonds.
For the avoidance of doubt, the ability to purchase New 2058
Bonds and for the Priority Allocation to be effective is subject to
all applicable securities laws and regulations in force in any
relevant jurisdiction. In the event that any such Bondholder is
ineligible to be offered or to be sold the New 2058 Bonds in
accordance with any applicable securities laws and regulations then
no Priority Allocation will be given.
Recommendation to vote in favour of the Proposals
The Proposals have been considered by a Special Committee (the
"Special Committee") of The Investment Association at the request
of the Issuer. The members of the Special Committee, who hold in
aggregate approximately 40.38 per cent. of the Bonds, have examined
the Proposals. They have informed the Issuer that they find the
Proposals acceptable; that, subject to client and other approvals,
they intend to vote in favour of the Proposals in respect of their
holdings of the Bonds; and they invite other members of The
Investment Association to consider a similar course of action. The
Special Committee has advised the Issuer that this recommendation
relates only to the Proposals with respect to the Bonds and not to
any future offers or proposals which the Issuer may make.
Early Instruction Fee and Base Fee
Subject to the conditions set out in this Solicitation
Memorandum and the approval and implementation of the Extraordinary
Resolution, the Issuer will pay to (i) each Holder of the Bonds
that has delivered a valid Electronic Voting Instruction which has
been received by the Tabulation Agent at or prior to the Early
Instruction Deadline, which has not been validly withdrawn at or
prior to the Expiration Time and which remains in full force and
effect until the conclusion of the Meeting, the Early Instruction
Fee, by reference to the Principal Amount Outstanding of the Bonds
the subject of such Electronic Voting Instruction and (ii) each
Holder of the Bonds that has delivered a valid Electronic Voting
Instruction which has been received by the Tabulation Agent after
the Early Instruction Deadline but at or prior to the Expiration
Time, which has not been validly withdrawn at or prior to the
Expiration Time and which remains in full force and effect until
the conclusion of the Meeting, the Base Fee, by reference to the
Principal Amount Outstanding of the Bonds the subject of such
Electronic Voting Instruction.
Any Early Instruction Fee or Base Fee, as the case may be, shall
be paid on the Payment Date via the relevant Clearing System for
payment to the cash account of an eligible holder of Bonds in such
Clearing System.
Early Instruction Fee: 15bps of the Principal Amount Outstanding
of the Bonds
Base Fee: 5bps of the Principal Amount Outstanding of the
Bonds
Expected Timetable
The times and dates below (other than the time and date of the
Meeting and the Expiration Time) are indicative only. Accordingly,
the actual timetable may differ significantly from the expected
timetable set out below.
Event Date
Announcement of Proposals and Notice 16 November
of Meeting given to Bondholders 2016
through the Clearing Systems.
Solicitation Memorandum and drafts 16 November
of the Final Terms Amendment, the 2016
Second Supplemental Bond Trust Deed
and the Second Supplemental Agency
Agreement to be made available at
the specified office of the Tabulation
Agent (copies of which are obtainable
by Bondholders upon request, free
of charge).
Early Instruction Deadline: Latest 4.00 p.m. (London
time and date for receipt of Electronic time)
Voting Instructions through the On 28 November
Clearing Systems voting in favour 2016
of the Extraordinary Resolution
to be received by the Tabulation
Agent for eligibility for payment
of the Early Instruction Fee.
Expiration Time: Latest time and 4:00 p.m. (London
date for (i) delivery and receipt time)
by the Tabulation Agent of valid on 5 December
Electronic Voting Instructions through 2016
the Clearing Systems (such Electronic
Voting Instructions are irrevocable
from this date) and (ii) obtaining
a voting certificate from the Principal
Paying Agent and for the issuance
or revocation of a voting instruction
whether given by way of an Electronic
Voting Instruction or otherwise.
Time and date of the Meeting. Commencing
at 9:00 a.m.
(London time)
on 8 December
2016 as set
out in the
Notice of Meeting
Notice of results of the Meeting Promptly following
to be given to Bondholders through the Meeting
the Clearing Systems. on 8 December
2016
If the Extraordinary Resolution
is approved and implemented
Execution of the Second Supplemental On or about
Bond Trust Deed and the Second Supplemental 8 December
Agency Agreement. 2016
Payment of any Early Instruction 9 December
Fee or Base Fee, as the case may 2016
be.
General
Subject to applicable law and as provided in the Solicitation
Memorandum, the Issuer may, in its sole discretion, amend the terms
of (save for the terms of the Extraordinary Resolution or the
Expiration Time), terminate or withdraw the Consent Solicitation at
any time prior to the Solicitation Amendment Deadline.
Bondholders are advised to check with the bank, securities
broker, custodian, Clearing System or other intermediary through
which they hold their Bonds whether such intermediary will apply
different deadlines for participation to those set out in the
Solicitation Memorandum and, if so, should adhere to such deadlines
if such deadlines are prior to the deadlines set out in the
Solicitation Memorandum.
In relation to the delivery or revocation of Electronic Voting
Instructions, in each case, through the Clearing Systems,
Bondholders holding Bonds in Euroclear or Clearstream, Luxembourg
should note the particular practice of the relevant Clearing
System, including any earlier deadlines set by such Clearing
System.
Only direct accountholders in Euroclear or Clearstream,
Luxembourg may deliver Electronic Voting Instructions. Bondholders
who are not direct accountholders in Euroclear or Clearstream,
Luxembourg should arrange for the accountholder through which they
hold their Bonds to deliver an Electronic Voting Instruction on
their behalf to the relevant Clearing System as more particularly
described in the Solicitation Memorandum. The deadlines specified
by the relevant Clearing System may be earlier than the Expiration
Time.
Bondholders are advised to read carefully the Solicitation
Memorandum for full details of and information on the procedures
for participating in the Consent Solicitation.
A complete description of the terms and conditions of the
Consent Solicitation will be set out in the Solicitation
Memorandum.
For Further Information:
Further details on the Consent Solicitation and copies of the
Solicitation Memorandum can be obtained from:
The Solicitation Agent
Morgan Stanley & Co. International plc
25 Cabot Square
Canary Wharf
London E14 4QA
United Kingdom
Tel: +44 207 677 5040
Email: liabilitymanagementeurope@morganstanley.com
Attention: Liability Management
The Tabulation Agent
Lucid Issuer Services Limited
Tankerton Works
12 Argyle Walk
London WC1H 8HA
United Kingdom
Telephone: +44 20 7704 0880
Email: thameswater@lucid-is.com
Attention: Thomas Choquet
Disclaimer
This announcement must be read in conjunction with the
Solicitation Memorandum. The Solicitation Memorandum contains
important information which should be read carefully before any
decision is made with respect to the Consent Solicitation. If any
Bondholder is in doubt as to the action it should take, it is
recommended to seek its own financial advice, including as to any
tax consequences, from its stockbroker, bank manager, solicitor,
accountant, independent financial adviser authorised under the
Financial Services and Markets Act 2000 (if in the United Kingdom)
or other appropriately authorised financial adviser. Any individual
or company whose Bonds 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 Consent Solicitation.
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCGGGMGGUPQGMQ
(END) Dow Jones Newswires
November 16, 2016 12:19 ET (17:19 GMT)
Thames W.u.62 (LSE:38DO)
Historical Stock Chart
From May 2024 to Jun 2024
Thames W.u.62 (LSE:38DO)
Historical Stock Chart
From Jun 2023 to Jun 2024
