TIDMAA.
RNS Number : 2368T
AA PLC
02 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
2nd July 2018
Announcement of AA's proposed bond issue and Tender Offer to
refinance the Group's shorter-term maturities
Proposed refinancing will extend debt maturities and enhance
credit profile
The AA plc today announces a proposed issuance by AA Bond Co
Limited (the "Issuer") of a single class of Sub-Class A7 Fixed Rate
Notes due 2024/2043 (the "New Notes") and a concurrent Tender Offer
as defined below. On completion of the proposed refinancing, and in
line with the Group's disciplined and pro-active approach to its
capital structure, a significant proportion of the AA plc's
shorter-term maturities will be extended, thereby increasing
operational flexibility and providing runway for the execution of
the recently-announced strategic plan.
The Tender Offer
Eligible holders of the GBP500m 4.2487% Class A3 Secured Notes
due 2020/2043 (XS0996575378) (the "Existing Notes"), have been
invited to tender their Existing Notes for purchase by AA Senior Co
Limited (the "Borrower") for cash. The Borrower will accept up to
GBP350m of the Existing Notes for purchase, with the actual amount
communicated in the final results announcement relating to the
Tender Offer.
The Tender Offer is in line with the Group's liability
management programme to optimise its capital structure, in the
context of current market conditions and upcoming maturities.
The Tender Offer will be funded with a portion of the proceeds
of the issuance of a new single class of Sub-Class A7 Fixed Rate
Notes as described below.
Bond Issue
The Issuer, a subsidiary of the AA plc, today announces a
proposed issuance of further Class A Notes under its multicurrency
bond programme listed on the regulated market of Euronext Dublin.
An issue of up to GBP600m of fixed-rate Class A Notes with a six
year tenor may follow subject to market conditions. The bonds will
be senior secured Reg S bearer notes and are expected to be rated
BBB-(sf) by S&P, details will be set out in a Class A Notes
Prospectus dated 2 July 2018.
Up to GBP350m of the proceeds of the new Notes are expected to
be used by the AA group to fund the Tender Offer in respect of the
Issuer's outstanding GBP500m Sub-Class A3 Notes on the next
interest payment date (31 July 2018).
Senior term facility and working capital facility
It is also intended that the New Notes will be used to redeem in
full the Group's existing GBP250m senior term facility due
2021.
In parallel with the Tender Offer and bond issuance, the AA will
enter into a forward starting senior term facility ("STF") due in
July 2023 for up to GBP200m in order to secure committed funding
for up to 100% of the remaining A3 Notes left outstanding post the
Tender Offer, at their effective maturity on 31 July 2020.
The AA also announces its intention to replace the Group's
existing working capital facility with a new working capital
facility ("WCF") of GBP60m (together with a GBP15m accordion
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 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.
Greenhill and Co. acted as sole financial advisor to the AA on
this transaction.
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.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
MSCFKBDDCBKKAOK
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