Centrica plc announces Tender Offers for certai...

Centrica plc announces Tender Offers for certain of its Notes

Centrica plc

22 February 2018

Centrica plc
(the “Company”)
announces Tender Offers for certain of its Notes

NOT FOR DISTRIBUTION IN OR INTO OR TO ANY PERSON LOCATED OR RESIDENT IN THE UNITED STATES OF AMERICA (INCLUDING ITS TERRITORIES AND POSSESSIONS) OR IN ANY OTHER JURISDICTION WHERE IT IS UNLAWFUL TO DISTRIBUTE THIS ANNOUNCEMENT (SEE “OFFER AND DISTRIBUTION RESTRICTIONS” BELOW)

22 February 2018. The Company¹ today announces its invitations (together, the “Tender Offers” and each a “Tender Offer”) to holders of the following Notes, to tender their Notes for purchase by the Company for cash, subject to the conditions described in the tender offer memorandum dated 22 February 2018 (the “Tender Offer Memorandum”): the outstanding £500,000,000 6.375 per cent. Notes due March 2022 (ISIN: XS0416397338) (the “2022 Notes” and the “First Priority Notes”); the outstanding £200,000,000 6.400 per cent. Notes due September 2026 (ISIN: XS0265184589) (the “2026 Notes”); the outstanding £750,000,000 4.375 per cent. Notes due March 2029 (ISIN: XS0753789980) (the “2029 Notes” and together with the 2026 Notes, the “Second Priority Notes”); the outstanding £770,000,000 7.000 per cent. Notes due September 2033 (ISIN: XS0388006123) (the “2033 Notes”); the outstanding £550,000,000 4.250 per cent. Notes due September 2044 (ISIN: XS0825385858) (the “2044 Notes” and together with the 2033 Notes, the “Third Priority Notes” and together with the First Priority Notes and the Second Priority Notes, the “Notes”), and in each case in the order of priority listed below subject to the acceptance of a maximum of £600,000,000 in aggregate principal amount of the Notes and on the terms and subject to the conditions set out in full in the Tender Offer Memorandum.

Tender Offer for the First Priority Notes

Title of Security

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ISIN

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Principal Amount Outstanding

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Priority Acceptance Level

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Reference security for Reference Rate

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Purchase Spread

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Amount subject to the Tender Offer

£500,000,000 6.375 per cent. Notes due March 2022

XS0416397338

£500,000,000

1

4.00 per cent. UK Treasury Gilt due March 2022 (ISIN: GB00B3KJDQ49)

45 basis points

Any and all

Tender Offer for the Second Priority Notes

Title of Security

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ISIN

Â

Principal Amount Outstanding

Â

Priority Acceptance Level

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Reference security for Reference Rate

Â

Purchase Spread

Â

Amount subject to the Tender Offer

£200,000,000 6.400 per cent. Notes due September 2026

XS0265184589

£200,000,000

2

1.50 per cent. UK Treasury Gilt due July 2026 (ISIN: GB00BYZW3G56)

110 basis points

The Maximum Tender Amount less the aggregate principal amount of the First Priority Notes validly tendered and accepted for purchase in the Tender Offers

£750,000,000 4.375 per cent. Notes due March 2029

XS0753789980

£750,000,000

2

6.00 per cent. UK Treasury Gilt due December 2028 (ISIN: GB0002404191)

115 basis points

Tender Offer for the Third Priority Notes

Title of Security

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ISIN

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Principal Amount Outstanding

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Priority Acceptance Level

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Reference security for Reference Rate

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Purchase Spread

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Amount subject to the Tender Offer

£770,000,000 7.000 per cent. Notes due September 2033

XS0388006123

£770,000,000

3

4.25 per cent. UK Treasury Gilt due June 2032 (ISIN: GB0004893086)

140 basis points

The Maximum Tender Amount less the aggregate principal amount of the First Priority Notes and Second Priority Notes validly tendered and accepted for purchase in the Tender Offers, provided however that the Series Acceptance Amount in respect of the 2033 Notes shall not exceed £77,000,000

£550,000,000 4.250 per cent. Notes due September 2044

XS0825385858

£550,000,000

3

3.25 per cent. UK Treasury Gilt due January 2044 (ISIN: GB00B84Z9V04)

140 basis points

Copies of the Tender Offer Memorandum are (subject to distribution restrictions) available from the Tender Agent as set out below. Capitalised terms used but not defined in this announcement have the meanings given to them in the Tender Offer Memorandum.

The aggregate principal amount of Notes that may be accepted by the Company for purchase in the Tender Offers will be based on a maximum tender amount of £600,000,000 (as increased or decreased in the sole discretion of the Company in accordance with the terms and conditions contained in the Tender Offer Memorandum) (the “Maximum Tender Amount”) and the priority level (the “Priority Acceptance Level”) for such Series, as set out under “Priority Acceptance Level” in the table above. Tenders of Second Priority Notes and Third Priority Notes in the Tender Offers may be pro-rated as set out in the Tender Offer Memorandum. All of the First Priority Notes, which have the highest Priority Acceptance Level (“Priority Acceptance Level 1”), that are validly tendered in the Tender Offer will be accepted in full before any of the Second Priority Notes (“Priority Acceptance Level 2”) and the Third Priority Notes (“Priority Acceptance Level 3”) (in such order of acceptance), that are validly tendered in the Tender Offer are accepted. If the Company accepts any validly tendered First Priority Notes for purchase then all First Priority Notes validly tendered will be accepted for purchase in full without pro-ration, in accordance with the terms and conditions of the Tender Offers. Second Priority Notes and Third Priority Notes validly tendered may be accepted for purchase in accordance with the terms and conditions of the Tender Offers but may be subject to pro-ration so that the Company will only accept for purchase Notes having an aggregate principal amount equal to the Maximum Tender Amount, as described in the next paragraph. The Company has full discretion as to the allocation of the purchase funds between Notes of the same Priority Acceptance Level, provided that the Series Acceptance Amount in respect of the 2033 Notes shall not exceed £77,000,000.

As the principal amount outstanding of the First Priority Notes is less than the Maximum Tender Amount, the Company will accept any and all of the First Priority Notes and an aggregate principal amount of Second Priority Notes validly tendered of up to (i) the Maximum Tender Amount less (ii) the aggregate principal amount of the First Priority Notes validly tendered and accepted for purchase in the Tender Offers. If the aggregate principal amount of Second Priority Notes of either Series validly tendered in the Tender Offer is greater than the relevant Series Acceptance Amount then such Second Priority Notes will, if accepted for purchase, be accepted on a pro-rata basis.

If the aggregate principal amount of the First Priority Notes and Second Priority Notes validly tendered is equal to or in excess of the Maximum Tender Amount then none of the Third Priority Notes will be accepted for purchase. If the aggregate principal amount of First Priority Notes and Second Priority Notes validly tendered in the Tender Offer is less than the Maximum Tender Amount, then the Company will accept an aggregate principal amount of Third Priority Notes validly tendered of up to (i) the Maximum Tender Amount less (ii) the aggregate principal amount of the First Priority Notes and Second Priority Notes validly tendered and accepted for purchase in the Tender Offers. If the aggregate principal amount of Third Priority Notes of either Series validly tendered in the Tender Offer is greater than the relevant Series Acceptance Amount then such Third Priority Notes will, if accepted for purchase, be accepted on a pro-rata basis. The aggregate principal amount of validly tendered 2033 Notes accepted for purchase by the Company pursuant to the relevant Tender Offer will not exceed £77,000,000.

In respect of each Series of Notes accepted for purchase, the price payable per £1,000 in principal amount of Notes (subject in each case to the applicable Minimum Denomination), as the case may be, will be determined at or around 12:00 hours (London Time) (the “Pricing Time”) on 2 March 2018 (the “Pricing Date”) by the Joint Dealer Managers in accordance with market convention, by reference to (i) in the case of each Series of Notes other than the 2026 Notes the annualised sum of (x) the relevant fixed Purchase Spread as specified in the table above, and (y) the relevant Reference Rate (as defined herein); and (ii) in the case of the 2026 Notes, the sum of (x) the relevant fixed Purchase Spread as specified in the table above and (y) the 2026 Benchmark Rate.

In case any Notes are accepted for purchase pursuant to the Tender Offers, the Company will also pay accrued and unpaid interest on the relevant Notes from, and including, the immediately preceding interest payment date for such Notes up to, but excluding, the Settlement Date, which is expected to be 6 March 2018.

The Company is not under any obligation to accept for purchase any Notes tendered pursuant to the Tender Offers. The acceptance for purchase by the Company of Notes validly tendered pursuant to the Tender Offers is at the sole discretion of the Company and tenders may be rejected by the Company for any reason.

The Company reserves the right at any time to waive any or all of the conditions of the Tender Offers as set out in the Tender Offer Memorandum.

The Company has today launched, contemporaneously with the launch of the Tender Offers, offers to purchase for cash (the “U.S. Tender Offers”) (i) any and all of one series of its U.S. dollar denominated debt securities with an outstanding principal amount of US$750,000,000 and (ii) a capped amount of one series of its U.S. dollar denominated debt securities with a principal amount outstanding of US$600,000,000. The U.S. Tender Offers are made separately to this announcement.

The Tender Offers, together with the U.S. Tender Offers, are being made as part of the implementation of the Company’s financial framework and resulting decrease in net debt, and are intended to achieve a more efficient balance sheet structure.

Electronic Offer Instructions

In order to participate in, and be eligible to receive the Tender Consideration in respect of the relevant Series of Notes pursuant to, the Tender Offers, Noteholders must submit, or procure the submission of, a valid offer to sell Notes (“Offer to Sell”) via an Electronic Offer Instruction that is received by the Tender Agent by 16:00 hours (London time) on 1 March 2018. Electronic Offer Instructions will be irrevocable except in the limited circumstances described in the Tender Offer Memorandum.

The Notes are denominated, and accordingly can only be tendered in the Tender Offers, in the Minimum Denominations and Permitted Integral Multiples in excess thereof applicable to each respective Series, being:

Series	Â	Minimum Denomination	Â	Permitted Integral Multiples
2022 Notes		£50,000		£1,000
2026 Notes		£50,000		£50,000
2029 Notes		£100,000		£1,000
2033 Notes		£50,000		£1,000
2044 Notes		£100,000		£1,000

Save for in respect of the First Priority Notes, a separate Offer to Sell must be completed on behalf of each beneficial owner and in respect of each Series of Notes.

Before making a decision whether to tender Notes pursuant to a Tender Offer, Noteholders should carefully consider all of the information in the Tender Offer Memorandum and, in particular, the factors set out under the heading “Risk Factors”.

Indicative Timetable for the Tender Offers

Events/Dates	Â	Times and Dates
Commencement of the Tender Offers
Tender Offers announced and beginning of Tender Offer Period. Tender Offer Memorandum available from the Tender Agent.		22 February 2018
Expiration Time
Deadline for receipt of Electronic Offer Instructions and end of Tender Offer Period. Tendering holders should note that Electronic Offer Instructions must be submitted in accordance with the deadlines of the Clearing Systems, which will be before the Expiration Time.		16:00 hours (London time) on 1 March 2018
Announcement of Indicative Results of Tender Offers
Announcement by the Company of the aggregate principal amount of Notes of each Series validly tendered pursuant to the Tender Offers and a non-binding indication of the level at which it expects to set (i) the aggregate principal amount of Notes to be accepted for purchase pursuant to the Tender Offers and each Series Acceptance Amount; and (ii) any indicative Pro-Rating Factor(s) (if applicable) in the event the Company decides to accept valid tenders of Notes pursuant to the Tender Offers.		As soon as reasonably practicable on 2 March 2018
Pricing Date and Time
Determination of each Purchase Price and determination of the relevant Reference Rate and the relevant Purchase Yield in respect of each Series of Notes accepted for purchase pursuant to the relevant Tender Offer.		At or around 12:00 hours (London time) on 2 March 2018
Announcement of Final Offer Results and Pricing
Announcement of (i) whether the Company will accept valid Offers to Sell pursuant to the Tender Offers; (ii) in respect of the Notes accepted for purchase, the relevant Accrued Interest Amount, the relevant Purchase Price, the relevant Reference Rate and the relevant Purchase Yield; and (iii) the aggregate principal amount of Notes to be accepted for purchase pursuant to the Tender Offers, each Series Acceptance Amount and any Pro-Rating Factor (if applicable) in respect of each Series of Notes accepted for purchase pursuant to the Tender Offers.		As soon as reasonably practicable after the Pricing Time on the Pricing Date
Settlement Date
Settlement of the Tender Offers and payment of the Tender Consideration in respect of Notes accepted for purchase.		Expected to take place on 6 March 2018

The Company may, in its sole discretion, extend, re-open, amend or terminate the Tender Offers and amend any of the terms and conditions at any time (subject to applicable law and as provided in the Tender Offer Memorandum) and the above times and dates are subject to the right of the Company to so extend, re-open, amend and/or terminate the Tender Offers.

Noteholders are advised to check with the broker, dealer, bank, custodian, trust company, or other nominee through which they hold their Notes as to the deadlines by which such intermediary would require receipt of instructions from Noteholders to participate in, or (where permitted) to withdraw their instructions to participate in, the Tender Offers in accordance with the terms and conditions of the Tender Offers as described in the Tender Offer Memorandum in order to meet the deadlines set out above and in the Tender Offer Memorandum. The deadlines set by any such intermediary and each Clearing System for the submission and (where permitted) withdrawal of Offers to Sell will be earlier than the relevant deadlines specified above and in the Tender Offer Memorandum.

Unless stated otherwise, announcements in connection with the Tender Offers will be made by the delivery of notices to the Clearing Systems for communication to Direct Participants. Such announcements may also be made on the relevant Reuters Screen and/or by the issue of a press release to a Notifying News Service and/or via the Regulatory News Service operated by the London Stock Exchange. Copies of all such announcements, press releases and notices can also be obtained upon request from the Tender Agent, the contact details for which are on the last page of the Tender Offer Memorandum. Significant delays may be experienced where notices are delivered to the Clearing Systems and Noteholders are urged to contact the Tender Agent for the relevant announcements during the course of the Tender Offers. In addition, Noteholders may contact the Joint Dealer Managers for information using the contact details below.

Noteholders are advised to carefully read the Tender Offer Memorandum for full details of, and information on, the procedures for participating in the Tender Offer.

Barclays Bank PLC, Citigroup Global Markets Limited, Société Générale and The Royal Bank of Scotland plc (trading as NatWest Markets) are acting as Joint Dealer Managers for the Tender Offers and Lucid Issuer Services Limited is acting as Tender Agent.

Questions and requests for information in relation to the Tender Offers may be directed to the Company or the Joint Dealer Managers.

THE COMPANY
	Â
Centrica plc
Millstream
Maidenhead Road
Windsor
Berkshire SL4 5GD
United Kingdom
	Â
Investors and Analysts
Tel: [phone]
Email: [e-mail]
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Media
Tel: [phone]
Email: [e-mail]
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Treasury
Tel: [phone]
Email: [e-mail]
	Â
JOINT DEALER MANAGERS
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Barclays Bank PLC	Citigroup Global Markets Limited
5 The North Colonnade	Citigroup Centre
Canary Wharf	33 Canada Square
London E14 4BB	Canary Wharf
United Kingdom	London E14 5LB
	United Kingdom
	Â
Tel: [phone]	Tel: [phone]
Attention: Liability Management Group	Attention: Liability Management Group
Email: [e-mail]	Email: [e-mail]
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Société Générale	The Royal Bank of Scotland plc
Tours Société Générale	(trading as NatWest Markets)
17, Cours Valmy	250 Bishopsgate
92987 Paris La Défense Cedex	London EC2M 4AA
France	United Kingdom
	Â
Tel: [phone]	Tel: [phone]
Attention: Liability Management	Attention: Liability Management
Email: [e-mail]	Email: [e-mail]

Requests for information in relation to the procedures for tendering Notes in the Tender Offers and the submission of Electronic Offer Instructions or for copies of the Tender Offer Memorandum or related documents should be directed to:

THE TENDER AGENT

Â

Lucid Issuer Services Limited Tankerton Works 12 Argyle Walk London WC1H 8HA United Kingdom

Â

Tel: [phone]

Attention: Thomas Choquet

Email: [e-mail]

This announcement contains inside information which is disclosed in accordance with the Market Abuse Regulation.

DISCLAIMER

Nothing in this announcement constitutes an offer of securities in the United States of America. The notes referred to above have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”) or with any securities regulatory authority of any state or other jurisdiction of the United States.

This announcement must be read in conjunction with the Tender Offer Memorandum. This announcement and the Tender Offer Memorandum contain important information which should be read carefully before any decision is made with respect to the Tender Offers. If any Noteholder is in any doubt as to the content of this announcement or the Tender Offer Memorandum or the action it should take, it is recommended to seek its own financial advice, including in respect of any tax consequences, from its broker, bank manager, solicitor, accountant or other independent financial, tax or legal adviser. Any individual or company whose Notes are held on its behalf by a broker, dealer, bank, custodian, trust company or other nominee must contact such entity if it wishes to tender such Notes pursuant to the Tender Offers. None of the Company, the Joint Dealer Managers or the Tender Agent or any of their respective directors, employees or affiliates makes any recommendation whether Noteholders should tender any Notes pursuant to the Tender Offers.

OFFER AND DISTRIBUTION RESTRICTIONS

United States

The Tender Offers are not being made, and will not be made, directly or indirectly in or into, or by use of the mail of, or by any means or instrumentality of interstate or foreign commerce of or of any facilities of a national securities exchange of, the United States. This includes, but is not limited to, facsimile transmission, electronic mail, telex, telephone, the internet and other forms of electronic communication. The Notes may not be tendered in the Tender Offers by any such use, means, instrumentality or facility from or within the United States or by persons located or resident in the United States or by any person acting for the account or benefit of a person located or resident in the United States. Accordingly, copies of this announcement, the Tender Offer Memorandum and any other documents or materials relating to the Tender Offers are not being, and must not be, directly or indirectly mailed or otherwise transmitted, distributed or forwarded (including, without limitation, by custodians, nominees or trustees) in or into the United States or to any persons located or resident in the United States. Any purported tender of Notes in the Tender Offers resulting directly or indirectly from a violation of these restrictions will be invalid and any purported tender of Notes made by, or by any person acting for the account or benefit of a person located in the United States or from within the United States or from any agent, fiduciary or other intermediary acting on a non-discretionary basis for a principal giving instructions from within the United States will be invalid and will not be accepted.

Each holder of Notes participating in the Tender Offers will represent that it is not located in the United States and it is not participating in the Tender Offers from the United States, or that it is acting on a non-discretionary basis for a principal located outside the United States that is not giving an order to participate in the Tender Offers from the United States. For the purposes of this and the above paragraph, “United States” means the United States of America, its territories and possessions (including Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the Northern Mariana Islands), any state of the United States of America and the District of Columbia.

United Kingdom

The communication of this announcement, the Tender Offer Memorandum and any other documents or materials relating to the Tender Offers are not being made by, and such documents and/or materials have not been approved by, an authorised person for the purposes of section 21 of the Financial Services and Markets Act 2000, as amended. Accordingly, such documents and/or materials are not being distributed to, and must not be passed on to, the general public in the United Kingdom. The communication of such documents and/or materials as a financial promotion is only being made to those persons in the United Kingdom falling within the definition of investment professionals (as defined in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”) or to persons falling within Article 43(2) of the Order (including a creditor of the Company), or to other persons to whom it may otherwise lawfully be made in accordance with the Order.

Italy

None of the Tender Offers, this announcement, the Tender Offer Memorandum or any other documents or materials relating to the Tender Offers have been or will be submitted to the clearance procedures of the Commissione Nazionale per le Società e la Borsa (“CONSOB”) pursuant to Italian laws and regulations. The Tender Offers are being carried out in the Republic of Italy (“Italy”) as an exempted offer pursuant to article 101-bis, paragraph 3-bis of the Legislative Decree No. 58 of 24 February 1998, as amended (the “Financial Services Act”) and article 35-bis, paragraph 4 of CONSOB Regulation No. 11971 of 14 May 1999, as amended.

Any holder or beneficial owner of the Notes located in Italy may tender their Notes for purchase in the Tender Offers through authorised persons (such as investment firms, banks or financial intermediaries permitted to conduct such activities in Italy in accordance with the Financial Services Act, CONSOB Regulation No. 16190 of 29 October 2007, as amended from time to time, and Legislative Decree No. 385 of 1 September 1993, as amended) and in compliance with applicable laws and regulations or with requirements imposed by CONSOB or any other Italian authority. Each intermediary must comply with the applicable laws and regulations concerning information duties vis-à-vis its clients in connection with the Notes, this announcement or the Tender Offer Memorandum.

France

The Tender Offers are not being made, directly or indirectly, to the public in the Republic of France (“France”). None of this announcement, the Tender Offer Memorandum or any other document or material relating to the Tender Offers have been or shall be distributed to the public in France and only (i) providers of investment services relating to portfolio management for the account of third parties (personnes fournissant le service d’investissement de gestion de portefeuille pour compte de tiers) and/or (ii) qualified investors (investisseurs qualifiés) other than individuals, in each case acting for their own account, all as defined in, and in accordance with, Articles L.411-1, L.411-2 and D.411-1 of the French Code Monétaire et Financier, are eligible to participate in the Tender Offers. None of this announcement, the Tender Offer Memorandum, or any other document or material relating to the Tender Offers has been or will be submitted for clearance to or approved by the Autorité des Marchés Financiers.

General

None of this announcement, the Tender Offer Memorandum or the electronic transmission thereof constitutes an offer to buy or the solicitation of an offer to sell Notes (and Offers to Sell will not be accepted from Noteholders) in any circumstances in which such offer or solicitation is unlawful. In those jurisdictions where the securities, blue sky or other laws require the Tender Offers to be made by a licensed broker or dealer or similar and any of the Joint Dealer Managers or any of the Joint Dealer Managers’ respective affiliates is such a licensed broker or dealer or similar in any such jurisdiction, the Tender Offers shall be deemed to be made by such Joint Dealer Manager or such affiliate, as the case may be, on behalf of the Company in such jurisdiction.

In addition to the representations referred to above in respect of the United States, each Noteholder participating in a Tender Offer will also be deemed to give certain representations in respect of the other jurisdictions referred to above and generally as set out in the section of the Tender Offer Memorandum titled “Procedures for Submitting Offers to Sell”. Any tender of Notes for purchase pursuant to the Tender Offers from a Noteholder that is unable to make these representations may be rejected. Each of the Company, the Joint Dealer Managers and the Tender Agent reserves the right, in its absolute discretion (and without prejudice to the relevant Noteholder’s responsibility for the representations made by it), to investigate, in relation to any tender of the Notes for purchase pursuant to the Tender Offers, whether any such representation given by a Noteholder is correct and, if such investigation is undertaken and as a result the Company determines (for any reason) that such representation is not correct, such Offer to Sell may be rejected.

Centrica plc is listed on the London Stock Exchange (CNA)
Registered Office: Millstream, Maidenhead Road, Windsor, Berkshire SL4 5GD
Registered in England & Wales number: 3033654
Legal Entity Identifier number: E26EDV109X6EEPBKVH76
ISIN number: GB00B033F229

¹ (LEI E26EDV109X6EEPBKVH76)

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