Financing transactions

RNS Number : 6715C

SAGA PLC

22 June 2021

 

THIS ANNOUNCEMENT RELATES TO THE DISCLOSURE OF INFORMATION THAT QUALIFIED OR MAY HAVE QUALIFIED AS INSIDE INFORMATION WITHIN THE MEANING OF ARTICLE 7(1) OF THE MARKET ABUSE REGULATION (EU) 596/2014 as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018 (MAR).

THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT CONSTITUTE OR FORM PART OF ANY OFFER INVITATION TO SELL OR ISSUE, OR ANY SOLICITATION OF AN OFFER TO PURCHASE OR SUBSCRIBE FOR, ANY SECURITIES OF SAGA PLC.

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO, OR TO ANY PERSON LOCATED OR RESIDENT IN, ANY JURISDICTION WHERE IT IS UNLAWFUL TO RELEASE, PUBLISH OR DISTRIBUTE THIS ANNOUNCEMENT. PLEASE SEE THE IMPORTANT NOTICE AT THE END OF THIS ANNOUNCEMENT.

22 June 2021

Saga plc

Financing transactions

Saga plc ("Saga" or "the Group"), the UK's specialist in products and services for people over 50, today announces a number of financing transactions intended to improve its financial flexibility by increasing available liquidity, extending debt maturities and providing greater headroom against covenants.

The transactions, which deliver against Saga's strategic priority to strengthen the balance sheet, are the launch of a roadshow in respect of a £250 million fixed rate guaranteed unsecured bond, the launch of a tender offer in respect of its Existing Bonds (as defined below) with a target acceptance amount of up to £100 million, the £70 million repayment of its term loan and amendments to the covenants in its existing revolving credit facilities. All transactions are contingent on each other.

Proposed offering of GBP denominated fixed rate guaranteed bonds

Saga has mandated Barclays Bank PLC, HSBC Bank plc, Mizuho International plc and NatWest Markets Plc to carry out roadshows in connection with a proposed offering (the "Offering") of £250 million GBP denominated fixed rate guaranteed bonds (the "Bonds") to be fully, unconditionally and irrevocably guaranteed on a joint and several basis by Saga Mid Co Limited and Saga Services Limited (together, the "Guarantors").

The completion of the Offering will be subject to market conditions and further details will be announced in due course. If completed, the proceeds of the Offering will be used by Saga (i) to repay in full its existing term loan, (ii) to fund the settlement of a concurrent Tender Offer (as defined below), and (iii) for general corporate purposes.

Proposed tender offer for Saga's £250,000,000 3.375 per cent notes due 2024

Saga is also announcing its invitation to holders of its £250,000,000 3.375 per cent notes due 12 May 2024 (ISIN: XS1610655950) guaranteed by the Guarantors (the "Existing Bonds") to tender their Existing Bonds for purchase by Saga for up to £100 million in cash (subject to the satisfaction or waiver of certain conditions) (the "Tender Offer").  Barclays Bank PLC and HSBC Bank plc have been mandated as dealer managers in respect of the Tender Offer.

A launch announcement in respect of the Tender Offer will shortly be available on the RIS publication section of the website of the Irish Stock Exchange plc trading as Euronext Dublin (https://direct.euronext.com/Announcements/View-Announcements/RIS-Announcements/) (the "Tender Offer Announcement"). Existing Bondholders should follow the procedures set out in the Tender Offer Announcement in order to partake in the Tender Offer.

Amendment to corporate finance facilities

The Company further announces that it has reached agreement to amend its existing term loan and revolving credit facilities, in order to, among other things, (i) prepay in full and cancel the existing term loan facility using the proceeds of the Offering, and (ii) amend the financial covenants. The specific details of the amendments are shown in the appendix below. 

The person responsible for making this announcement is Vicki Haynes, Group Company Secretary of Saga plc.

For further information please contact:

Saga plc

Mark Watkins  Tel: [phone]

Finance Director, Treasury                                                               Email: [e-mail]

Emily Roalfe  Tel: [phone]

Head of Investor Relations                                                               Email: [e-mail]

Headland Consultancy

Susanna Voyle                                                                                    Tel: [phone]

Will Smith   Tel: [phone]

         Tel: [phone]

          Email: [e-mail]

Important Notice  

This announcement has been issued by and is the sole responsibility of Saga. This announcement is not an offering document or an equivalent and investors should not subscribe for, or otherwise purchase, acquire, sell or dispose of any of the securities referred to in this announcement except on the basis of the information contained in the listing particulars to be published by Saga in connection with the Issue and/or the tender offer memorandum available to Existing Bondholders in connection with the Tender Offer. The information contained in this announcement is for background purposes only and does not purport to be full or complete.

This announcement shall not constitute an offer of securities for sale in the United States. The Bonds have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the "Securities Act") or the securities laws of any state of the United States or any other jurisdiction and the securities may not be offered or sold within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state or local securities laws.

This announcement is for information purposes only and is addressed to and directed only at
(i) persons who have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Order"), (ii) persons who are high net worth entities falling within Article 49(2)(a) to (d) of the Order, or (iii) other persons to whom they may otherwise lawfully be communicated (all such persons together being referred to as "relevant persons"). This announcement must not be acted on or relied on in the United Kingdom, by persons who are not relevant persons. Any investment or investment activity to which this announcement relates is available only to relevant persons in the United Kingdom and will be engaged in only with relevant persons.

Appendix

Revolving credit facilities

The covenants within the Group's revolving credit facilities have been amended as follows:

	Leverage ratio (excluding Cruise)		Interest cover
	Old	New	Old	New
31 July 2021	4.75x	4.75x	1.25x	1.25x
31 October 2021*	4.75x	4.75x	1.25x	1.25x
31 January 2022	4.25x	4.25x	1.50x	1.25x
31 July 2022	3.00x	3.75x	3.50x	2.00x
31 January 2023	3.00x	3.75x	3.50x	2.50x
31 July 2023 and onwards	3.00x	3.00x	3.50x	3.50x
* Quarterly covenants are only tested if leverage is above 4.0x times at the previous covenant test date.  This requirement ceases on 31 January 2022.

In addition, the following amendments have also been made:

· dividends remain restricted while leverage (excluding Cruise) is above 3.0x;

· the Group remains subject to a minimum liquidity requirement of 40 million, which can be met either through cash or undrawn and committed facilities;

· the maximum amount of liquidity that can be used to fund the cruise business has been increased from £55m to £115m; and

· a requirement to prepay the revolving credit facility on 1 March 2024 if the Existing Notes have not been redeemed prior to this date.

 

END

 

 

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