AA PLC Bond pricing & refinancing of senior term debt (2249U)
11 July 2018 - 2:23AM
UK Regulatory
TIDMAA.
RNS Number : 2249U
AA PLC
10 July 2018
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (EU) 596/2014
FOR DISTRIBUTION ONLY OUTSIDE THE UNITED STATES TO PERSONS OTHER
THAN "U.S. PERSONS" (AS DEFINED IN REGULATION S UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED). NOT FOR RELEASE,
PUBLICATION OR DISTRIBUTION IN OR INTO, OR TO ANY PERSON LOCATED OR
RESIDENT IN, ANY OTHER JURISDICTION WHERE IT IS UNLAWFUL TO
RELEASE, PUBLISH OR DISTRIBUTE THIS ANNOUNCEMENT
MANUFACTURER TARGET MARKET (MIFID II PRODUCT GOVERNANCE) IS
ELIGIBLE COUNTERPARTIES AND PROFESSIONAL CLIENTS ONLY (ALL
DISTRIBUTION CHANNELS). NO PRIIPS KEY IMFORMATION DOCUMENT (KID)
HAS BEEN PREPARED AS NOT AVAILABLE TO RETAIL IN EEA
AA plc
10(th) July 2018
Pricing of new A7 Fixed Rate Notes and successful refinancing of
the AA group's senior term and working capital facilities
Further to the Tender Offer announced on 02 July 2018, the AA is
pleased to confirm that its subsidiary, AA Bond Co Limited (the
"Issuer"), has today priced GBP550m aggregate principal of 4.875%
Sub-Class A7 Fixed Rate Notes due 2024/2043 (the "Class A7
Notes").
In addition, the AA is pleased to announce that valid
acceptances for GBP458,407,000 aggregate principal have been
received from eligible holders of the 4.2487% Class A3 Secured
Notes due 2020/2043 (XS0996575378) (the "Class A3 Notes"), of which
GBP300,000,000 have been accepted for purchase by the Borrower.
Following the settlement date (expected to be on 17 July 2018),
GBP200,000,000 aggregate principal amount of the Class A3 Notes
will remain outstanding.
The Bond Issue
Further to the Issuer's announcement this morning, the Issuer
has priced GBP550m of new Class A7 Notes with an expected maturity
of 31 July 2024 and a final maturity of 31 July 2043. The coupon is
4.875% payable semi-annually in arrear. The Class A7 Notes will be
senior secured Reg S bearer notes and are expected to be rated
BBB-(sf) by S&P.
The proceeds from the issuance of the Class A7 Notes will be
applied to repay in full the Group's existing GBP250m senior term
facility due 2021. The remaining GBP300m of the proceeds of the
Class A7 Notes will be used to redeem GBP300m of the outstanding
GBP500m aggregate principal of Class A3 Notes.
Senior term facility and working capital facility
The AA will enter into a GBP200m forward starting senior term
facility due in July 2023 in order to secure committed funding to
be able to redeem the GBP200m of Class A3 Notes left outstanding at
their effective maturity on 31 July 2020. This forward starting
facility will replace the Group's existing GBP250m senior term
facility.
A new working capital facility of GBP60m (together with a GBP15m
accordion facility), will also be put in place to replace the
existing GBP75m working capital facility, with a maturity to 31
July 2023 and with the current margin.
These refinancings are in line with the AA's disciplined and
pro-active approach to its capital structure and reduce any
refinancing risk in the near-term. The extension in maturity of
debt will mean that the next repayment of borrowings (other than
that to be funded by the committed forward starting senior
facility) is not due until January 2022, providing significant
runway for management to focus on the recently-announced strategic
plan.
Completion of the Tender Offer and issuance of the Class A7
Notes is expected to take place on 17 July 2018. Detailed
information on the Tender Offer will be available by way of the
Companies Announcement Service of the Irish Stock Exchange where
the Class A7 Notes will be listed.
Martin Clarke, CFO of the AA, said:
"The success of this transaction is a validation of our recently
announced strategy. Following this refinancing our effective
near-term debt maturity has been extended until January 2022,
providing us with the run-way we need to execute our plans and
deliver growth in our Roadside and Insurance businesses."
Greenhill and Co. acted as sole financial advisor to the AA on
this transaction.
Enquiries
Investors
Zeeshan Maqbool, Head of Investor Relations, AA plc +44 207 395
7303
Notes
Sub-Class A3 Fixed Rate Notes
GBP500m 4.2487% Class A3 Secured Notes due 2020/2043
(XS0996575378). GBP500 million in aggregate principal amount are
outstanding.
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END
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