71GA Ang.w.s.f.bd37

 
TIDM71GA TIDM95LS 
 
Anglian Water Services Financing plc ("AWSF") and Anglian Water (Osprey) 
Financing Plc ("AWOF") 
 
NEW FINANCING STRATEGY AND STRUCTURE FOR ASSET MANAGEMENT PERIOD 2020-2025 
("AMP7") 
 
AWSF and Anglian Water Services Limited ("AWS" or "Opco"), the regulated entity 
that trades as Anglian Water, announce a new financing structure to support 
AWS's AMP7 investment commitments. This follows a full review, announced on 30 
March 2021 of the AWS financing strategy. Following that review, AWS committed 
to reduce total gearing in order to maintain its current solid investment grade 
credit ratings and ensure it has a sustainable and efficient capital structure 
in the interest of customers and investors, the environment and long-term 
viability. 
 
AWSF and AWOF (together, the "Issuers") can now confirm that a new financing 
structure is today being put in place to refinance existing debt at AWSF and 
AWOF and support AWS in meeting its commitments outlined above. The key 
elements of the new financing structure and proposed deleveraging at Opco 
(together, the "Refinancing and Deleveraging Transaction") are as set out 
below. 
 
A three tiered financing structure at Opco, Midco and Holdco:  The new 
financing structure comprises financing arrangements at each of the three 
following levels (i) Aigrette Financing Limited ("New HoldCo" and "AFL"), which 
indirectly holds 100% of the shares in MidCo, (ii) Osprey Acquisitions Limited 
("MidCo" and "OAL"), which indirectly holds 100% of the shares in AWS and (iii) 
AWS. While the gearing will remain broadly unchanged at group level, with the 
ratio of net debt to regulated capital value of c.86% on an aggregate basis, 
the new financing structure shifts the balance of debt between Opco, Midco and 
the New Holdco in order to enable companies at the various levels to access the 
debt markets more efficiently. 
 
Substantial reduction in debt and gearing at AWS: Approximately £1bn of new 
debt is intended to be raised at New HoldCo and MidCo which will be contributed 
as equity capital to AWS. This would reduce the ratio of net debt to regulated 
capital value at AWS from c.82% currently to below 70% and support AWS in 
maintaining its current solid investment grade ratings at A-/A3/A- by Standard 
and Poor's, Moody's and Fitch respectively. The credit rating agencies will be 
making their own announcements and investors should refer to the relevant 
websites to obtain details of such announcements. 
 
AWSF Class B deed poll, prepayment of Class B private placement notes and the 
option for Class B bondholders to convert into Class A: AWSF and AWS intend to 
enter into a deed poll ("OpCo Deed Poll") to grant additional financial 
covenants for the benefit of all secured creditors in the Opco securitisation 
structure in order to bring the Class B covenants relating to restricted 
payments in line with existing Class A covenants and to ensure that no new 
Class B debt is raised at Opco. Further, AWS and AWSF intend to repay the Class 
B private placement notes that are due to mature in the near term and, in due 
course, to offer the outstanding Class B AWSF bondholders the option to convert 
into Class A bonds. 
 
New investment grade "Midco" financing platform: OAL has established a new 
ring-fenced financing platform ("New Midco Financing Platform") through AWOF 
and will issue debt that is expected to be rated investment grade by at least 
one credit rating agency. The consolidated net debt to regulated capital value 
at Midco will be reduced from c.86% to just below 80%. AWOF has raised an 
additional committed term loan facility of approximately £150m and an 
additional committed bridge facility of approximately £450m. The existing £250m 
revolving credit facility has been amended and restated and included within the 
New MidCo Financing Platform alongside these additional facilities. 
 
The New Midco Financing Platform is designed to operate alongside the existing 
Euro Medium Term Note Programme and the existing intercreditor arrangements 
while the two series of bonds (the £210m 5% Notes due 30 April 2023 and the £ 
240m 4 % Notes due 8 March 2026) remain outstanding. The bondholders in these 
respective bonds will, in due course, be offered the opportunity to become part 
of the New MidCo Financing Platform if they wish to do so. 
 
New Holdco financing platform: a newly established holding company Aigrette 
Financing Limited, which indirectly holds 100% of the shares in OAL, has raised 
committed term loan facility of £200m and bridge facility of £360m with the net 
proceeds to be contributed as equity to its subsidiaries in order to reduce the 
gearing at Midco and Opco as stated above. The consolidated net debt to 
regulated capital value at New Holdco will c.86%. 
 
New Refinancing Debt:  As of today, OAL (through AWOF) and New HoldCo have 
committed term loan and bridge facilities as described above, that are 
sufficient to implement the Refinancing and Deleveraging Transaction. OAL 
intends to raise longer term debt by issue of public bonds and private 
placement bonds through AWOF and New HoldCo intends to raise private placement 
debt. The combination of any such longer term debt proceeds and any drawings 
under the committed term loan and bridge facilities and would be used to reduce 
gearing in AWS and implement the Refinancing and Deleveraging Transaction. As a 
condition to drawing any of the new debt facilities, AWSF and AWS will be 
required to execute the OpCo Deed Poll. 
 
While OAL and New Holdco expect to raise the longer term debt before 30 
September 2021, this remains subject to market conditions and there is no 
certainty that it will be raised by that date. 
 
Information contained in this announcement would have been deemed inside 
information for the purposes of UK version of Regulation (EU) No 596/2014 which 
is part of English law by virtue of the European (Withdrawal) Act 2018, as 
amended, until the release of this announcement. 
 
This announcement is a communication to the market. Nothing in this 
announcement constitutes an offer of securities for sale in the United States 
or any other jurisdiction. This announcement does not constitute a prospectus 
or a prospectus equivalent document. 
 
This announcement has been delivered to you on the basis that you are a person 
into whose possession this announcement may be lawfully delivered in accordance 
with the laws of the jurisdiction in which you are located and you may not, nor 
are you authorised to, deliver this announcement to any other person. The 
distribution of this announcement in jurisdictions other than the United 
Kingdom may be restricted by law and therefore persons into whose possession 
this announcement comes should inform themselves about, and observe, such 
restrictions. Any failure to comply with the restrictions may constitute a 
violation of the securities laws of any such jurisdiction. 
 
Contact for more information:           Jane Pilcher 
 
                                                           Group Treasurer 
 
                                                           Jane.Pilcher@awg.com 
 
                                                           Regan Harris 
 
                                                           Anglian Water Press 
Office 
 
 
pressoffice@anglianwater.co.uk 
 
                                                           07900210450 
 
 
 
END 
 
 

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