Issue of Debt

RNS Number : 1530O

National Grid PLC

13 September 2011

 



13 September 2011

The information contained herein may only be released, published or distributed in the United Kingdom,

Jersey and Guernsey. The information contained herein is not for release, publication or distribution in or into the United States, Australia, Canada, Japan, South Africa, Republic of Ireland or in any other jurisdiction where it is unlawful to distribute this press release. The bonds may only be sold in Jersey in compliance with the provisions of the Control of Borrowing (Jersey) Order 1958.

NATIONAL GRID LAUNCHES RPI LINKED 10 YEAR STERLING RETAIL BOND

National Grid has today launched a 10 year RPI linked Sterling bond available to retail investors.

The bonds will pay interest semi-annually at a 1.25% annual gross rate of interest adjusted to take account of changes in the level of the Retail Price Index*. On maturity, the amount due to be paid will be the full face value of the bonds adjusted to take account of any overall increase in the RPI. However on maturity, even if the RPI has fallen, National Grid will be required to repay the bonds at no less than their full face value.

National Grid is the first company to issue an RPI-linked bond available to retail investors, having traditionally only offered such bonds to major institutional investors. National Grid has a capital investment programme of approximately £22bn for the period from 2010 to 2015 for which it requires funding.

Malcolm Cooper, Global Tax and Treasury Director at National Grid, said

"National Grid is a relatively low risk business due to the demand for what we do and our highly regulated nature. There is evidence of strong demand from retail investors for inflation linked products to protect them from certain effects of inflation, and we hope that this product will address some of that demand".

Barclays Capital and Evolution Securities Limited have been appointed Joint Lead Managers of the bond issue. The bonds are expected to be issued on 6 October 2011. The offer period for the bonds is expected to remain open until 29 September 2011 but may close earlier.

The bonds are being issued by National Grid plc pursuant to its €15,000,000,000 EMTN programme and are expected to be listed on the London Stock Exchange (LSE) and to trade on the LSE's Order book for Retail Bonds.

* Inflation adjustments will be calculated by comparing the RPI level relating to the month which is 8 months before each payment is due to be made with the RPI level relating to the month which was 8 months before the October 2011 issue date, i.e. February 2011. For more information please read the Information Booklet, Prospectus and Final Terms relating to the bonds.

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For media enquiries please contact:

National Grid

Gemma Stokes           [phone]

Chris Mostyn               [phone]       [phone] (m)

Brunswick

Tom Burns                  [phone]

Tom Batchelar            [phone]

 Notes to editors:

·     The bonds may not be suitable for all investors. Investors should ensure they fully understand the risks and seek independent financial advice.

·     Investors should note that the price of the bonds can rise and fall during the life of the bonds and the price of the bonds could fall below the issue price of £100.

·     In the event of deflation, the interest rate on the bonds may be less than 1.25% per year.

·     If an investor has, or is eligible to set up, a Stocks & Shares ISA or a SIPP which can hold bonds, depending on their individual tax circumstances and subject to any future changes in legislation, they may be entitled to interest paid on the bonds and any gain on sale or redemption of the bonds free of UK tax.

·     During the life of the bonds, investors may sell the bonds at any time (within market hours and in normal market conditions) on the open market through their stockbroker.

·     In the event that National Grid defaults or becomes insolvent, investors may lose some or all of their investment.

CAUTIONARY STATEMENT

This announcement contains certain statements that are neither reported financial results nor other historical information. These statements are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements include information with respect to National Grid's financial condition, its results of operations and businesses, strategy, plans and objectives. Words such as 'anticipates', 'expects', 'intends', 'plans', 'believes', 'seeks', 'estimates', 'targets', 'may', 'will', 'continue', 'project' and similar expressions, as well as statements in the future tense, identify forward-looking statements. These forward-looking statements are not guarantees of National Grid's future performance and are subject to assumptions, risks and uncertainties that could cause actual future results to differ materially from those expressed in or implied by such forward-looking statements. Many of these assumptions, risks and uncertainties relate to factors that are beyond National Grid's ability to control or estimate precisely, such as changes in laws or regulations and decisions by governmental bodies or regulators; breaches of, or changes in, environmental, climate change and health and safety laws or regulations, including breaches arising from the potentially harmful nature of its activities; network failure or interruption, the inability to carry out critical non network operations and damage to infrastructure, owing to adverse weather conditions or otherwise; performance against regulatory targets and standards and against National Grid's peers with the aim of delivering stakeholder expectations regarding costs and efficiency savings, including those related to restructuring and internal transformation projects; and customers and counterparties failing to perform their obligations to the Company and its arrangements with the Long Island Power Authority not being renewed. Other factors that could cause actual results to differ materially from those described in this announcement include fluctuations in exchange rates, interest rates and commodity price indices; restrictions in National Grid's borrowing and debt arrangements, funding costs and access to financing; National Grid's status as a holding company with no revenue generating operations of its own; inflation; seasonal fluctuations; the funding requirements of its pension schemes and other post-retirement benefit schemes; the loss of key personnel or the ability to attract, train or retain qualified personnel and any disputes arising with its employees or the breach of laws or regulations by its employees; accounting standards, rules and interpretations, including changes of law and accounting standards and other factors that may affect National Grid's effective rate of tax; and incorrect or unforeseen assumptions or conclusions relating to business development activity. For a more detailed description of some of these assumptions, risks and uncertainties, together with any other risk factors, please see National Grid's filings with and submissions to the US Securities and Exchange Commission (the 'SEC') (and in particular the 'Risk factors' and 'Operating and Financial Review' sections in our most recent Annual Report on Form 20-F). The effects of these factors are difficult to predict. New factors emerge from time to time and National Grid cannot assess the potential impact of any such factor on its activities or the extent to which any factor, or combination of factors, may cause results to differ materially from those contained in any forward-looking statement. Except as may be required by law or regulation, National Grid undertakes no obligation to update any of its forward-looking statements, which speak only as of the date of this announcement. The contents of any website references herein do not form part of this announcement.

 

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