FGP Firstgroup Plc

FIRSTGROUP PLC
NEW SUSTAINABILITY-LINKED BANK FACILITY
AND REPAYMENT OF LEGACY DEBT

FirstGroup plc (‘FirstGroup’ or ‘the Group’) announces that it has signed a new £300m sustainability-linked Revolving Credit Facility (‘RCF’) with a group of its relationship banks. The RCF has an initial maturity of four years, with the option to extend by a further year subject to bank consent. The covenants have been structured to reflect the future shape of the Group and to give substantial headroom against them.

The initial interest rate will be the Bank of England's Sterling Overnight Index Average (‘SONIA’) interest rate plus 1%, and will thereafter vary according to two measures. The first of these is the Group’s leverage; and the second is its performance against two sustainability KPIs, being the level of Scope 1, 2 and 3 emissions per £m of revenue from its First Bus and First Rail operations, and the relative growth of its zero-emission bus fleet in the UK.

The new RCF replaces all the Group’s former committed syndicated and bilateral banking facilities, which have recently been repaid and cancelled. The Group has recently also repaid the UK Government's Covid Corporate Financing Facility (‘CCFF’) commercial paper as well as all of its Private Placement debt, and will shortly give notice to the holders of its £325m 5.25% bonds due November 2022 that it will exercise its right to repay them early. The Group’s £200m 6.875% bonds due September 2024 are not affected and remain outstanding.

As previously outlined, the Group expects to have pro forma adjusted pre IFRS16 net debt of c.£100m following all of the funds flows related to the First Student and First Transit transaction and the use of proceeds as set out in the circular and the announcement of completing the sale.

Commenting on the above, Ryan Mangold, FirstGroup CFO, said:

"The new sustainability-linked RCF and repayment of our CCFF commercial paper, 2022 bonds, and private placement notes completes the reorganisation of our debt arrangements following the recent sale of our North American contract businesses. This has been an important step that complements the rationalisation of the Group and ensures that our debt arrangements are fit-for-purpose for our future development. We are pleased with the support shown by our relationship banks for our new facility, which has a clear link to our decarbonisation plans, including our commitment to operating a zero emission First Bus fleet by 2035."

Notes

Legal Entity Identifier (LEI): 549300DEJZCPWA4HKM93. Classification as per DTR 6 Annex 1R: 3.1.

FirstGroup plc (LSE: FGP.L) is a leading private sector provider of public transport services. With £4.3 billion in revenue and around 30,000 employees, our UK divisions transported nearly 700,000 passengers a day in the 52 weeks to 27 March 2021. First Bus is the second largest regional bus operator in the UK, serving two-thirds of the UK’s 15 largest conurbations with a fleet of c.5,000 buses. First Rail is the UK’s largest rail operator, with many years of experience running long-distance, commuter, regional and sleeper rail services. We operate a fleet of c.3,750 rail vehicles on four contracted operations (Avanti, GWR, SWR, TPE) and two open access routes (Hull Trains and a new East Coast service launching later in 2021). We create solutions that reduce complexity, making travel smoother and life easier. Our businesses are at the heart of our communities and the essential services we provide are critical to delivering wider economic, social and environmental goals. We are formally committed to operating a zero-emission First Bus fleet by 2035 and to cease purchasing further diesel buses after 2022; and First Rail will help support the UK Government’s goal to remove all diesel-only trains from service by 2040. Visit our website at www.firstgroupplc.com and follow us @firstgroupplc on Twitter.