26th Jun 2008 11:11
Greene King plc completes successful £350m securitisation issuance
Greene King plc ("Greene King") has finalised successfully terms for a second tap of its whole business securitisation issuing an additional £350m of investment grade bonds. This is consistent with our strategy of taking advantage of longer-term, lower cost bond finance when conditions allow. By doing so, we have introduced high quality pubs from the acquired estates of Belhaven, Hardy's and Hanson's and New Century Inns into the securitisation.
At the same time, Greene King has simplified its bank borrowing facilities to a four-year facility of £400m. Both transactions have been completed in an extremely tough trading and lending environment and are testament to the quality of the Greene King estate, security of its cash flows and strength of its business model.
The main benefits and facts behind these initiatives include: -
Longer term and more attractively priced bond finance
Total issuance now £1.45bn
Securitisation represents 2035 pubs or 80% of the estate
Committed £400m bank financing until April 2012 provides enhanced headroom
Blended interest coupon unchanged at 6.0%
100% of debt now fixed
Investment flexibility and balance sheet agility maintained
The tap issue has today been priced, and it is expected that the transaction will be completed June 30th, when the funds raised will be used to partially re-pay the group's existing bank facilities. The securitisation tap issue has been pre-placed, and priced at the following levels:
|
Class |
Rating |
Type |
Amount |
Coupon |
|
A5 |
A |
FRN |
£290m |
Libor + 100bp1 |
|
AB1 |
BBB+ |
FRN |
£60m |
Libor + 210bp1 |
|
Total |
£350m |
Libor + 119bps2 |
1 FRNs are fully hedged and will be issued at a discount to par price of 99.95%
2 This represents the weighted average margin to the step-up at year 5
Rooney Anand, CEO, says:
"The fact that we have been able to launch successfully and price attractively a tap of a pub securitisation in difficult debt markets, demonstrates the quality of the Greene King estate and strength of the Greene King covenant. Going forward, the increased headroom and the strength and efficiency of our capital structure give us a platform to continue to invest in the business, to maintain flexibility within our pub estate and to be alive to any additional opportunities to enhance shareholder value."
The bond finance has been arranged and placed by The Royal Bank of Scotland plc.
For further information:
|
Greene King plc |
Rooney Anand, Chief Executive Ian Bull, Group Finance Director |
Tel: 01284 763222 |
|
Financial Dynamics |
Ben Foster / Marc Cohen |
Tel: 020 7831 3113 |
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