TIDMAA.

RNS Number : 0491K

AA PLC

04 July 2017

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

AA plc and AA Bond Co Limited

4 July 2017

Announcement of AA Bond Co Limited's proposed bond issue and intention to replace the AA group's senior term and working capital facilities

Proposed refinancings will reduce interest costs and extend maturity on improved terms

The AA plc announces today a proposed refinancing package in line with the Group's strategy to reduce overall borrowings and associated interest costs. On completion of the proposed refinancing detailed below, in addition to the extension of the maturity of debt, further savings in annual interest costs will allow the company to use more of its free cash flow to pay down debt in line with its strategy to de-lever over time.

Bond Issue

AA Bond Co Limited, a subsidiary of the AA plc (the "Issuer") today announces its intention to issue further Class A Notes under its multicurrency bond programme listed on the Irish Stock Exchange. Subject to market conditions, the Issuer is expecting to issue up to GBP250m of fixed-rate Class A Notes with a six year tenor. The bonds will be senior secured Reg S bearer notes and are expected to be rated BBB-(sf) by S&P.

The proceeds of the new Notes are expected be used by the AA group to redeem the Issuer's remaining GBP175m Sub-Class A1 Notes and GBP55m Sub-Class A4 Notes in full on the next interest payment date, including any required make-whole payments.

Senior debt repayment, renegotiation and working capital facility

AA Senior Co Limited (the "Borrower"), a subsidiary of AA plc, today announces its intention to replace its existing senior term facility with a new senior term facility. This will result in a reduction of GBP98m in the Borrower's senior term debt, an extension of the maturity of that debt to 31 July 2021 and a reduction in the margin.

The Borrower also announces its intention to replace its existing working facility with a new working capital facility of GBP75m (as opposed to the GBP150m currently in place), with a maturity to 31 July 2021 and, again, a reduced margin.

These refinancings are in line with the AA's strategy to reduce overall Group borrowings as well as the associated interest cost. The extension in maturity of debt will mean that the next repayment of borrowings is due in July 2020, while further savings in annual interest costs will allow the company to use more of its free cash flow to pay down debt in line with its strategy to de-lever over time.

Forward Looking Statements

This release includes forward-looking statements within the meaning of the securities laws of certain applicable jurisdictions. These forward-looking statements can be identified by the use of forward-looking terminology, including, but not limited to, terms such as "aim", "anticipate", "assume", "believe", "continue", "could", "estimate", "expect", "forecast", "guidance", "intend", "may", "outlook", "plan", "predict", "project", "should", "will" or "would" or, in each case, their negative, or other variations or comparable terminology. These forward-looking statements include, but are not limited to, all statements other than statements of historical facts and include statements regarding AA plc's and the Issuer's intentions, beliefs or current expectations concerning, among other things, AA plc and its subsidiaries' future financial conditions and performance, results of operations and liquidity, strategy, plans, objectives, prospects, growth, goals and targets, future developments in the markets in which AA plc and its subsidiaries participate or are seeking to participate, and anticipated regulatory changes in the industry in which AA plc and its subsidiaries operate. By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors because they relate to events and depend on circumstances that may or may not occur in the future. Readers are cautioned that forward-looking statements are not guarantees of future performance and are based on numerous assumptions. Given these risks and uncertainties, readers should not rely on forward looking statements as a prediction of actual results.

Enquiries

 
 Investors 
 Jill Sherratt, Head of Investor 
  Relations, AA plc                 +442073957301 
 Media (Headland) 
 Francesca Tuckett                  +44 2038054822

This information is provided by RNS

The company news service from the London Stock Exchange

END

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(END) Dow Jones Newswires

July 04, 2017 04:41 ET (08:41 GMT)

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