ISSUE OF HYBRID CAPITAL SECURITIES

SSE PLC

ISSUE OF HYBRID CAPITAL SECURITIES

SSE plc has successfully launched an issue of hybrid capital securities, a financial instrument which is subordinate to all senior creditors. This dual tranche issue comprises:

· a perpetual non-call 5.75 year note at £600m with a coupon of 3.74%; and

· a perpetual non-call 7.0 year note at €500m with a coupon of 3.125%.

The €500m tranche has been partly swapped back to Sterling, resulting in an all-in funding cost for both tranches to SSE of just under 3.8% per annum.

The intent is to use the proceeds of c.£1,060m to replace SSE's hybrids issued in 2015 (at an all-in rate of 4.02%), which have issuer first call dates of 10 September 2020 (£750m) and 1 April 2021 (€600m).

Gregor Alexander, SSE's Finance Director, said "We have always viewed optionality, agility and discipline as important qualities in financing, and the importance of these qualities has been emphasised by the disruptions to capital markets following the outbreak of coronavirus.

"Notwithstanding the current challenging market conditions that have been induced by the coronavirus pandemic, today's hybrid tranches have been well received, and were oversubscribed for. This latest hybrid issuance is consistent with our commitment to maintaining a strong balance sheet as we continue our low-carbon investment programme."

Notes

The first call dates of the new perpetual hybrids are 14 April 2026 for the £600m; and 14 July 2027 for the €500m. Both will be equity (cash) accounted with the coupon presented as distributions to other equity holders and reflected within adjusted earnings per share. 

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