AA PLC Bond pricing & refinancing of senior term debt (2249U)

TIDMAA.

RNS Number : 2249U

AA PLC

10 July 2018

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (EU) 596/2014

FOR DISTRIBUTION ONLY OUTSIDE THE UNITED STATES TO PERSONS OTHER THAN "U.S. PERSONS" (AS DEFINED IN REGULATION S UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED). NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO, OR TO ANY PERSON LOCATED OR RESIDENT IN, ANY OTHER JURISDICTION WHERE IT IS UNLAWFUL TO RELEASE, PUBLISH OR DISTRIBUTE THIS ANNOUNCEMENT

MANUFACTURER TARGET MARKET (MIFID II PRODUCT GOVERNANCE) IS ELIGIBLE COUNTERPARTIES AND PROFESSIONAL CLIENTS ONLY (ALL DISTRIBUTION CHANNELS). NO PRIIPS KEY IMFORMATION DOCUMENT (KID) HAS BEEN PREPARED AS NOT AVAILABLE TO RETAIL IN EEA

AA plc

10(th) July 2018

Pricing of new A7 Fixed Rate Notes and successful refinancing of the AA group's senior term and working capital facilities

Further to the Tender Offer announced on 02 July 2018, the AA is pleased to confirm that its subsidiary, AA Bond Co Limited (the "Issuer"), has today priced GBP550m aggregate principal of 4.875% Sub-Class A7 Fixed Rate Notes due 2024/2043 (the "Class A7 Notes").

In addition, the AA is pleased to announce that valid acceptances for GBP458,407,000 aggregate principal have been received from eligible holders of the 4.2487% Class A3 Secured Notes due 2020/2043 (XS0996575378) (the "Class A3 Notes"), of which GBP300,000,000 have been accepted for purchase by the Borrower. Following the settlement date (expected to be on 17 July 2018), GBP200,000,000 aggregate principal amount of the Class A3 Notes will remain outstanding.

The Bond Issue

Further to the Issuer's announcement this morning, the Issuer has priced GBP550m of new Class A7 Notes with an expected maturity of 31 July 2024 and a final maturity of 31 July 2043. The coupon is 4.875% payable semi-annually in arrear. The Class A7 Notes will be senior secured Reg S bearer notes and are expected to be rated BBB-(sf) by S&P.

The proceeds from the issuance of the Class A7 Notes will be applied to repay in full the Group's existing GBP250m senior term facility due 2021. The remaining GBP300m of the proceeds of the Class A7 Notes will be used to redeem GBP300m of the outstanding GBP500m aggregate principal of Class A3 Notes.

Senior term facility and working capital facility

The AA will enter into a GBP200m forward starting senior term facility due in July 2023 in order to secure committed funding to be able to redeem the GBP200m of Class A3 Notes left outstanding at their effective maturity on 31 July 2020. This forward starting facility will replace the Group's existing GBP250m senior term facility.

A new working capital facility of GBP60m (together with a GBP15m accordion facility), will also be put in place to replace the existing GBP75m working capital facility, with a maturity to 31 July 2023 and with the current margin.

These refinancings are in line with the AA's disciplined and pro-active approach to its capital structure and reduce any refinancing risk in the near-term. The extension in maturity of debt will mean that the next repayment of borrowings (other than that to be funded by the committed forward starting senior facility) is not due until January 2022, providing significant runway for management to focus on the recently-announced strategic plan.

Completion of the Tender Offer and issuance of the Class A7 Notes is expected to take place on 17 July 2018. Detailed information on the Tender Offer will be available by way of the Companies Announcement Service of the Irish Stock Exchange where the Class A7 Notes will be listed.

Martin Clarke, CFO of the AA, said:

"The success of this transaction is a validation of our recently announced strategy. Following this refinancing our effective near-term debt maturity has been extended until January 2022, providing us with the run-way we need to execute our plans and deliver growth in our Roadside and Insurance businesses."

Greenhill and Co. acted as sole financial advisor to the AA on this transaction.

Enquiries

Investors

Zeeshan Maqbool, Head of Investor Relations, AA plc [phone]

Notes

Sub-Class A3 Fixed Rate Notes

GBP500m 4.2487% Class A3 Secured Notes due 2020/2043 (XS0996575378). GBP500 million in aggregate principal amount are outstanding.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [e-mail] or visit www.rns.com.

END

MSCFKKDBABKDBOD

(END) Dow Jones Newswires

July 10, 2018 12:23 ET (16:23 GMT)