Notice to Bondholders

RNS Number : 6407W

Taylor Wimpey PLC

23 November 2010

 



23 November 2010

TAYLOR WIMPEY PLC - NOTICE TO THE HOLDERS OF THE £250,000,000 VARIABLE RATE BONDS DUE 2012 (ISIN: XS0142298685) AND £200,000,000 VARIABLE RATE BONDS DUE 2019 (ISIN: XS0193226965)

We refer to the £250 million Variable Rate Bonds due 2012 and the £200 million Variable Rate Bonds due 2019 issued by Taylor Wimpey plc (together the "Bonds"). 

As announced in connection with the announcement on 22 November 2010 of the Company's proposed £250 million senior notes offering, in order to satisfy the requirements of the Company's existing financing arrangements (including the requirements of the terms and conditions relating to each of the Bonds), the new debt to be raised will, if closing occurs, be issued in the form of notes which constitute debt securities.  For the avoidance of doubt, this applies to the initial utilisations of both the new £950 million credit facility and the £100 million facility agreement with Prudential/M&G UK Companies Financing Fund LP and also applies to the proposed £250 million senior notes offering.   

Under the terms of our existing financing arrangements (including the terms and conditions of the Bonds), the net proceeds of each such issue of debt securities would when received by a member of the Group qualify as 'Net Issuance Proceeds', 50 per cent. of which must be applied in mandatory prepayment of our existing financing arrangements in accordance with their terms and in accordance with the pari passu and pro rata sharing terms of the existing intercreditor agreement.  

The total amount to be so applied in mandatory prepayment of the Bonds will depend on the final amount of net proceeds raised and applicable exchange rates at the relevant time.  Any such amounts applied in mandatory prepayment of the Bonds will be applied to prepay the relevant proportion of the Bonds at par plus accrued interest.

In addition, the Company intends, following any such mandatory prepayments, to redeem the remaining balance of the Bonds at the full applicable Voluntary Redemption Price together with accrued interest and applicable Deferred Amounts and capitalised PIK amounts.  The amount of such Voluntary Redemption Price will be determined in accordance with the terms and conditions of the relevant Bonds and will utilise the gross redemption yield on a reference government stock issue which will be either the reference government stock issue set out in the relevant terms and conditions or an alternative recommended by a financial adviser approved by the Trustee for the purposes of reporting on the Voluntary Redemption Price for the relevant Bonds.

The amount of the Voluntary Redemption Price is likely to differ between the £250 million Variable Rate Bonds due 2012 and the £200 million Variable Rate Bonds due 2019 and is subject to adjustment to reflect the date of redemption and the applicable yield on the relevant government stock issue.  The total amount which will be received by holders of Bonds will therefore be calculated to reflect the amount of net issuance proceeds being applied in mandatory prepayment, the date or dates of prepayment, foreign exchange rates and the gross redemption yield on the relevant reference government stock issue.

On the basis of the following assumptions:

(i)         the amount of net issuance proceeds of debt securities is c.£1.2 billion

(ii)         the date of redemption is 14 December 2010

(iii)        a gross redemption yield of c.0.7% applies on the relevant reference government stock issue in respect of the £250 million Variable Rate Bonds due 2012

(iv)        a gross redemption yield of c.3.4% applies on the relevant reference government stock issue in respect of the £200 million Variable Rate Bonds due 2019

(v)         a dollar: sterling foreign exchange rate of c.1.6:1 (used to determine the allocation of the mandatory prepayment of net issuance proceeds between the various classes of debt, some of which is dollar denominated),

the Company estimates, by way of indication only, that in relation to the £250 million Variable Rate Bonds due 2012:

(A)        £62.9 million of the outstanding balance of £201.5 million of £250 million Variable Rate Bonds due 2012 will be prepaid on a mandatory basis at par plus accrued interest, and the remaining £138.6 million will be prepaid on a voluntary basis at the applicable Voluntary Redemption Price together with accrued interest and applicable Deferred Amounts and capitalised PIK amounts; and

 (B)       the Voluntary Redemption Price on the £138.6 million of £250 million Variable Rate Bonds due 2012 being prepaid on a voluntary basis would be c.107%, giving an effective redemption price on such Bonds taking into account such assumed mandatory and voluntary prepayments of c.105%; and

the Company estimates, by way of indication only, that in relation to the £200 million Variable Rate Bonds due 2019:

(A)        £50.3 million of the outstanding balance of £161.2 million of £200 million Variable Rate Bonds due 2019 will be prepaid on a mandatory basis at par plus accrued interest, and the remaining £110.9 million will be prepaid on a voluntary basis at the applicable Voluntary Redemption Price together with accrued interest and applicable Deferred Amounts and capitalised PIK amounts; and

(B)        the Voluntary Redemption Price on the £110.9 million of £200 million Variable Rate Bonds due 2019 being prepaid on a voluntary basis would be c.121%, giving an effective redemption price on such Bonds taking into account such assumed mandatory and voluntary prepayments of c.115%.

This notice is not a redemption notice.  The amounts and calculations given above are for guidance only and may change significantly if any of the amounts, dates or rates assumed turn out to be different at the relevant time. 

There is no guarantee that any prepayment or redemption of the Bonds will be made as this will be contingent on completion of the proposed financing, including successful issue of the proposed senior notes.

For further information please contact:

Taylor Wimpey plc                                                   Tel: [phone]

Peter Redfern, Group Chief Executive

Ryan Mangold, Group Finance Director

Jonathan Drake, Investor Relations

Finsbury                                                                 Tel: [phone]

Faeth Birch

Andrew Dowler

 

END

 

 

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