16th Aug 2006 07:50
Capital & Counties PLC16 August 2006 Liberty International PLC16 August 2006 Capital & Counties Limited (formerly Capital & Counties plc) debenture restructuring NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART INTO THE UNITEDSTATES OR ITALY, AS DESCRIBED BELOW. THERE ARE ALSO DISTRIBUTION RESTRICTIONS INTHE UNITED KINGDOM, AS ALSO DESCRIBED BELOW. Capital & Counties Limited (the "Company"), a wholly-owned subsidiary of LibertyInternational PLC ("Liberty International"), today announced proposals (the "Proposals") to restructure its £80,000,000 11.25% First Mortgage Debenture Stock2021 (the "2021 Stock") and £150,000,000 9.875% First Mortgage Debenture Stock2027 (the "2027 Stock" and, together with the 2021 Stock, the "Stock"). The Proposals provide for eligible Stockholders of the 2021 Stock and the 2027Stock to be redeemed by the issue of new First Mortgage Debenture Stock 2027 tobe issued by Capital & Counties Debenture PLC (the "New Stock") with: • a nominal value which equates to the estimated current market values ofthe 2021 Stock and the 2027 Stock; • a coupon in line with current market levels; • an updated trust deed; and • an amortisation schedule which, when combined with the interestpayable, will match the current cashflows of the 2027 Stock. The basis on which the 2021 Stock and the 2027 Stock will be exchanged for theNew Stock is set out in the Appendix to this announcement. The 2021 Stock and the 2027 Stock were issued in the early 1990s and late 1980srespectively and have historic high coupons which are out of line with currentmarket levels. They both trade significantly above par with the premium beingunsecured. The Company believes that a restructuring of these securities as envisaged bythe Proposals has several important benefits for investors including: • the substantial premium of market value to par of the 2021 Stock andthe 2027 Stock will become secured as a result of the increase in the nominalvalue to current market value; • a coupon in line with current market levels; • the New Stock issued in exchange for the 2021 Stock and the 2027 Stockwill benefit from a debt service coverage covenant while there is no equivalentcovenant in the 2027 Stock; • an enhanced security package including a larger and more diverse assetpool forming the security; • a new larger debt security expected to be more liquid than either the2021 Stock or the 2027 Stock is at present; and • an updated trust deed, including enhanced information provisions forinvestors. Commenting on the Proposals, Aidan Smith, Finance Director of LibertyInternational said: "Debenture financing still provides an efficient and effective long-term methodof funding for the Liberty International group. These proposals offer existingdebenture holders the opportunity to benefit from an improved security andcovenant package, as well as an updated trust deed and current market coupon." Enquiries: Liberty International PLC / Tel: 020 7960 1210Capital & Counties LimitedAidan Smith, Finance Director UBS Investment Bank Tel: 020 7567 7480Duane HebertAndrew Dennis Morgan Stanley & Co. International Limited Tel: 020 7677 5040Christopher ReesSteve White UBS Limited and Morgan Stanley & Co. International Limited are acting as JointSolicitation Agents and Joint Arrangers in connection with the Proposals andwill not be responsible to anyone other than Liberty International PLC andCapital & Counties Limited (whether or not a recipient of this announcement) forproviding the protections offered to clients of UBS Limited or Morgan Stanley &Co. International Limited nor for providing advice in relation to the Proposals. Appendix Overview of the Proposals The Company is giving notice to holders of the 2021 Stock and the 2027 Stockthat it is holding stockholder meetings to amend the conditions of each of the2021 Stock and the 2027 Stock to provide for the early redemption of therelevant stock by delivery of New Stock to eligible holders (or a cashequivalent to ineligible holders). These proposals will give eligible holders ofthe 2021 Stock and the 2027 Stock ("Stockholders") the opportunity to exchangetheir current holdings of the 2021 Stock and the 2027 Stock into a new andlarger series of 2027 stock with a current coupon to be issued by Capital &Counties Debenture PLC. Stockholders will receive New Stock for the premiumabove nominal value of the 2021 Stock and the 2027 Stock (a "market valueexchange"). The Company will also have the right to exchange the 2021 Stock and the 2027Stock of those eligible Stockholders who vote in favour of the Proposals even ifthe Extraordinary Resolutions are not approved in the relevant meeting ofStockholders. Details of these Proposals are set out in the consent solicitation statementdated 16 August 2006 (the "Consent Solicitation Statement"). Stockholders areadvised to refer to the Consent Solicitation Statement and Notices of Meetingsset out therein for full terms and procedures. The New Stock The New Stock to be offered to eligible Stockholders will have an amortisationschedule with a final maturity of 31 December 2027 to match the current maturityof the 2027 Stock. The principal repayment schedule of the New Stock will bedetermined based on the current cash flows of the 2027 Stock such that the sumof the periodic interest and principal repayments for the New Stock shall equalthe current periodic cash payments of the 2027 Stock on each cash payment date(subject to adjustment for the first coupon payment date, 31 December 2006, toaccount for the partial coupon period). The New Stock will have a coupon determined on the pricing date by reference tothe mid-market benchmark security rate of the 6.00% UK Treasury Gilt dueDecember 2028 plus a spread of 125 basis points. The New Stock will benefit from a larger, more liquid issue size and updatedcovenants and provisions in the trust deed. Terms of the Proposals The redemption price of the 2021 Stock and the 2027 Stock (used to calculate theredemption amount) will be determined by reference to the sum of the relevantmid-market benchmark security rate on 14 September 2006 (the "Pricing Date"),and the applicable Spread over Benchmark as stated in the table below. The 2027Stock has a higher spread over benchmark than the 2021 Stock due to its longermaturity. The amount of New Stock that each Stockholder receives will be determined basedon the relevant exchange ratio calculated by dividing the redemption price foreach of the 2021 Stock and the 2027 Stock by the new issue price for the NewStock to be delivered in settlement of the redemption amount for each of the2021 Stock and the 2027 Stock (each an "Exchange Ratio"). The effect of each Exchange Ratio is to provide Stockholders with a presentvalue of New Stock equivalent to the present value of the 2021 Stock and the2027 Stock respectively. The table below shows the indicative impact of the Proposals, based on Giltyields as at 14 August 2006. Existing Stock issued by the Company Benchmark Spread over Redemption Exchange RedemptionSeries Security Benchmark Price (1) Ratio (1) Amount (1) (%)£80m 11.25% due Dec-2021 4.75% UKT due Mar-2020 +115 bps 153.985 1.53985x £123.2m£150m 9.875% due Dec-2027 6.00% UKT due Dec-2028 +125 bps 150.643 1.50643x £226.0m .New Stock to be issued by Capital & CountiesDebenture PLC Benchmark Spread over Issue New NewSeries Security Benchmark Price (1) Coupon (1) (%) Notional (%) (1)£349m(1) 5.723% due 6.00% UKT due Dec-2028 +125 bps 100.00 5.723% £349.2mDec-2027 Note 1: Indicative amounts based on mid-market benchmark security yields of4.697% for the 2021 Stock and 4.473% for the 2027 Stock as at 14 August 2006assuming 100% exchanged and a Settlement Date of 5 October 2006. Expected timetable Date EventWednesday 16 August 2006 Commencement of the Consent SolicitationThursday 17 August 2006 (or earlier) Notices of Meetings sent to StockholdersWednesday 6 September 2006 Early Solicitation Deadline (12.00 noon UK)Monday 11 September 2006 Expiration Deadline (12.00 noon UK)Wednesday 13 September 2006 Meetings held (commencing 12.00 noon UK) Results of MeetingsThursday 14 September 2006 Pricing DateThursday 5 October 2006 Settlement Date Early Solicitation Fee and Resolution Fee An Early Solicitation Fee is being offered by the Company to each Stockholderwho delivers a valid stockholder instruction on or before 12.00 noon on 6September 2006 (the "Early Solicitation Deadline") to the Registrar, togetherwith the certificate or certificates for the Stock the subject of thestockholder instruction, and who does not subsequently validly revoke itsstockholder instruction, subject to the relevant Extraordinary Resolution at therespective Meeting being passed except as set out under "Partial Acceptance"below. In addition, a Resolution Fee is being offered by the Company to eachStockholder who delivers a valid stockholder instruction on or before 12.00 noonon 11 September 2006 (the "Expiration Deadline") to the Registrar, together withthe certificate or certificates for the Stock the subject of the stockholderinstruction, and who does not subsequently validly revoke its stockholderinstruction, subject to the relevant Extraordinary Resolution at the respectiveMeeting being passed except as set out under "Partial Acceptance" below. The Early Solicitation Fee and/or the Resolution Fee, as applicable, will bepayable on the Settlement Date in cash on redemption of the Stock pursuant tothe Extraordinary Resolutions. 2021 Stock 2027 StockEarly Solicitation Fee% of nominal amount 0.20% 0.20%Approx. value in bps running yield 1.47bps 1.21bps Resolution Fee% of nominal amount 0.60% 0.60%Approx. value in bps running yield 4.42bps 3.62bps Total Fee% of nominal amount 0.80% 0.80%Approx. value in bps running yield 5.89bps 4.83bps Partial Acceptance If either Extraordinary Resolution is not passed, the Company will also have theright to purchase, in exchange for New Stock, any 2021 Stock and 2027 Stock, inrespect of which a valid stockholder instruction voting in favour of therelevant Extraordinary Resolution has been received from an eligible stockholderand not subsequently validly revoked by not later than 12.00 noon on theExpiration Deadline, at the redemption amount by delivery of New Stock, inaccordance with the Proposals. Further, in this event, the Company will deliverto the relevant eligible Stockholders whose 2021 Stock or 2027 Stock is to be soredeemed, the Early Solicitation Fee and/or the Resolution Fee, as applicable,in accordance with the Proposals. Any 2021 Stock or 2027 Stock not so purchasedwill remain outstanding. Prior review and negotiations with holders The Proposals have been considered and examined by holders of the 2021 Stock andthe 2027 Stock, representing approximately 53% and 37% by nominal value,respectively, who have indicated their support for the Proposals. A copy of the Consent Solicitation Statement is available for inspection at theDocument Viewing Facility of the Financial Services Authority, 25 The NorthColonnade, London E14 5HS. This release does not constitute an invitation to participate in the Proposalsin any jurisdiction in which, or to or from any person to or from whom, it isunlawful to make such invitation under applicable securities laws. No offer or invitation to redeem any securities is being made pursuant to thisrelease. This release must be read in conjunction with the Consent SolicitationStatement. This release and the Consent Solicitation Statement contain importantinformation which should be read carefully before any decision is made inrelation to the Proposals. If you are in any doubt as the to the action youshould take, you are recommended to seek your own financial advice, including inrespect of any tax consequences, immediately from your stockbroker, bankmanager, solicitor, accountant or other independent financial adviser. Anyindividual or company whose Stock is held on its behalf by a broker, dealer,bank, custodian trust company or other nominee must contact such entity if theywish to participate in the Proposals. None of Capital & Counties Limited,Capital & Counties Debenture PLC, UBS Limited or Morgan Stanley & Co.International Limited (nor any person related to any such entity) makes anyrecommendation as to whether or not holders of Stock should participate in theProposals. This press release is not being made and will not be made directly or indirectlyin or into, or by use of the mails of, or by any means or instrumentality ofinterstate or foreign commerce of, or any facilities of a national securitiesexchange of, the United States or to U.S. persons (within the meaning ofRegulation S under the United States Securities Act of 1933, as amended (the "Securities Act")). This includes, but is not limited to, facsimile transmission,electronic mail, telex, telephone and the Internet. Accordingly, copies of thispress release are not being, and must not be, directly or indirectly mailed orotherwise transmitted, distributed or forwarded in or into the United States.The New Stock has not been, and will not be, registered under the Securities Actor the securities laws of any state or jurisdiction of the United States and maynot be offered, sold or delivered, directly or indirectly, in the United Statesor to or for the account or benefit of any U.S. persons (as defined in theSecurities Act). This press release is not being made in the Republic of Italy ("Italy"). TheProposals, this press release and the Consent Solicitation Statement have notbeen submitted to the clearance procedure of the Commissione Nazionale per leSocieta e la Borsa (CONSOB) or the Bank of Italy pursuant to Italian laws andregulations. Accordingly, Stockholders are notified that, to the extent suchholders are resident and/or located in the Republic of Italy ("Italy"), thisdocument does not constitute an offer for sale of securities and the New Stockwill not be offered, sold or delivered, directly or indirectly, in the Republicof Italy or to any Italian persons. New Stock will not be delivered in any jurisdiction other than to Stockholderswho are Eligible Stockholders. An "Eligible Stockholder" is a Stockholder of aseries who will receive an aggregate redemption amount in respect of its Stockof such series (settled by delivery of New Stock and any applicable cashrounding amount) of not less than £50,000 and who is either (a) a person who isresident and located in the UK and not a U.S. or Italian person or (b) not aU.S. or Italian person and resident in a jurisdiction in which delivery of theNew Stock to such person by the Company in consideration for redemption of theStock would not be unlawful and/or would not be subject to prior approval orauthorisation by the competent authority of the jurisdiction of the relevantStockholder or publication of a prospectus or any other requirements by reasonof the special status that such Stockholder may have in the relevantjurisdiction or otherwise (e.g. professional and/or institutional investor). The communication of this press release and any other documents or materialsrelating to the Proposals is not being made, and such documents have not beenapproved, by an authorised person for the purposes of section 21 of theFinancial Services and Markets Act 2000 (the "FSMA"). Accordingly, suchdocuments and/or materials are not being distributed to, and must not be passedon to, the general public in the United Kingdom. The communication of suchdocuments and/or materials as a financial promotion is only being made to thosepersons in the United Kingdom falling within the definition of InvestmentProfessionals (as defined in Article 19(5) of the Financial Services and MarketsAct 2000 (Financial Promotion) Order 2005 (the "Order")) or persons who arewithin Article 43 of the Order or any other persons to whom it may otherwiselawfully be made under the Order. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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