Northumbrian Water Finance PLC Tender Offer (1416L)

TIDMAG41 TIDMTTM

RNS Number : 1416L

Northumbrian Water Finance PLC

29 September 2016

NORTHUMBRIAN WATER FINANCE PLC

LAUNCHES TER OFFER FOR BONDS

LAUNCH ANNOUNCEMENT

NOT FOR DISTRIBUTION TO ANY PERSON RESIDENT AND/OR LOCATED IN THE UNITED STATES

This announcement does not constitute an invitation to participate in the Tender Offer in or from any jurisdiction in or from which, or to or from any person to or from whom, it is unlawful to make such offer under applicable securities laws or otherwise. The distribution of this announcement in certain jurisdictions (including the United States, the United Kingdom, Belgium, France and the Republic of Italy) may be restricted by law. See "Offer Restrictions" below. Persons into whose possession this document comes are required by the Company, the Guarantor and the Dealer Managers (each as defined herein) to inform themselves about, and to observe, any such restrictions. No action that would permit a public offer has been or will be taken in any jurisdiction by the Company, the Guarantor or the Dealer Managers.

London, 29 September 2016

Northumbrian Water Finance Plc (the "Company") hereby announces that it is inviting holders of its outstanding GBP300,000,000 6 per cent. Guaranteed Bonds due 2017 (ISIN: XS0139335029) (the "Bonds") issued by the Company and guaranteed by Northumbrian Water Limited (the "Guarantor") to tender their Bonds for purchase by the Company for cash on the terms of and subject to the conditions described in the tender offer memorandum dated 29 September 2016 (the "Memorandum") (including the New Issue Condition) (the "Tender Offer").

The Memorandum prepared in connection with the Tender Offer is subject to the jurisdictional restrictions set out below. Capitalised terms used in this announcement and not otherwise defined have the meanings ascribed to them in the Memorandum.

 
      ISIN/Common         Maturity     Aggregate           Reference         Repurchase      Maximum 
          Code              Date        principal           Treasury           Spread        Purchase 
                                         amount             Security                          Amount 
                                       outstanding 
-----------------------  ---------  ---------------  ---------------------  -----------  --------------- 
 XS0139335029/013933502      11      GBP300,000,000        UKT 1.00%            +25       GBP120,000,000 
                           October                            due 7              bps 
                            2017                            September 
                                                       2017 (GB00B7F9S958) 
-----------------------  ---------  ---------------  ---------------------  -----------  --------------- 
 

The Company proposes to accept for purchase an aggregate principal amount of Bonds of up to GBP120,000,000 (the "Maximum Purchase Amount"), subject to the Company's right to increase or decrease that amount by any amount at its sole discretion and for any reason. The Company may, in its sole discretion, extend, amend or terminate the Tender Offer at any time (subject to applicable law and as provided in the Memorandum).

New Issue Condition

The Company announced today its intention to issue new Sterling-denominated bonds due 2026 and guaranteed by the Guarantor (the "New Issue"). Any bonds issued pursuant to the New Issue will be in bearer form in minimum denominations of GBP100,000 and integral multiples of GBP1,000 in excess thereof. The purchase of any Bonds by the Company pursuant to the Tender Offer is subject also, without limitation, to the successful completion (in the sole determination of the Company) of the New Issue (the "New Issue Condition").

The Company is not under any obligation to accept for purchase any Bonds tendered pursuant to the Tender Offer. The acceptance for purchase by the Company of Bonds pursuant to the Tender Offer 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 Offer (including, but not limited to, the New Issue Condition as set out in this announcement).

The New Issue, and the guarantee thereof, are not being, and will not be, offered or sold in the United States. Nothing in this Memorandum constitutes an offer to sell or the solicitation of an offer to buy the New Issue, or the guarantee thereof, in the United States or any other jurisdiction. Securities may not be offered, sold or delivered in the United States absent registration under, or an exemption from the registration requirements of, the U.S. Securities Act of 1933, as amended (the "Securities Act"). The New Issue, and the guarantee thereof, have not been, and will not be, registered under the Securities Act or the securities laws of any state or other jurisdiction of the United States and may not be offered, sold or delivered, directly or indirectly, within the United States or to, or for the account or benefit of, U.S. persons.

No action has been or will be taken in any jurisdiction in relation to the New Issue to permit a public offering of securities.

Rationale for the Tender Offer and proposed New Issue

The Tender Offer is part of the Company's and Guarantor's liability management activities. The purpose of the Tender Offer and the Company's proposed New Issue is to extend the Company's debt maturity profile and raise new finance for the general corporate purposes of the Company. Bonds purchased by the Company pursuant to the Tender Offer will be cancelled and will not be re-issued or re-sold.

Purchase Price and Offer Period

The amount payable per GBP1,000 principal amount of the Bonds will be the sum of (i) the Purchase Price (expressed as a percentage and as defined herein) in respect of the Bonds multiplied by GBP1,000 and (ii) accrued and unpaid interest on GBP1,000 principal amount of the Bonds from, and including, the immediately preceding interest payment date for the Bonds up to, but excluding, the Settlement Date (the "Accrued Interest").

The purchase price for the Bonds accepted for purchase ("Purchase Price") will be determined in the manner described in the Memorandum by the Company by reference to the Repurchase Yield at the Pricing Time on the Pricing Date.

Each Bondholder may submit, subject to any earlier deadline set by an intermediary and/or each Clearing System, an Electronic Instruction Notice from and including 29 September 2016 to 4:00 p.m. London time on 7 October 2016 with respect to the Bonds (the "Expiration Deadline") (the "Offer Period"). The Company may extend, amend or terminate the Tender Offer at any time (subject to applicable law and as provided in the Memorandum).

Acceptance and Settlement

The Company will announce its decision of whether or not it will accept (subject to the satisfaction of the New Issue Condition on or prior to the Settlement Date) any Bonds for purchase on the date of the Announcement of Final Results and Pricing (expected to be as soon as reasonably possible following the Pricing Time on the Pricing Date). The Pricing Date shall be the date on which the Company determines the Reference Yield in respect of the Tender Offer which is expected to be 10 October 2016.

The Company is under no obligation to accept any tender of Bonds for purchase. The acceptance of Bonds validly tendered and not validly withdrawn pursuant to the Tender Offer for purchase by the Company is at the sole discretion of the Company and tenders of Bonds for purchase may be rejected by the Company for any reason.

Subject to the preceding paragraph, the Company intends to accept Bonds validly tendered for purchase until either (i) it has accepted all of the Bonds validly tendered and eligible for purchase, or (ii) the aggregate principal amount of all Bonds which have been accepted is the maximum amount that can be accepted without exceeding the Maximum Purchase Amount. Where the acceptance of all Bonds validly tendered for purchase would require a greater principal amount of Bonds to be accepted than the Maximum Purchase Amount, the Company intends to accept such Bonds validly tendered for purchase on a pro-rata basis (as described in the Memorandum in the section "Terms and Conditions relating to the Tender Offer" under the heading "Acceptance of Bonds validly tendered for purchase; Pro-Rata Allocation").

Bonds which have not been validly accepted and purchased by the Company will remain outstanding subject to the terms and conditions of such Bonds and will be returned to the respective Bondholders as soon as possible after the Settlement Date.

To validly tender Bonds pursuant to the Tender Offer, a Bondholder should deliver, or arrange to have delivered on its behalf, via the relevant Clearing System and in accordance with the requirements of such Clearing System and the procedures set out in the Memorandum in the section "Procedures for Participating in the Tender Offer", a valid Electronic Instruction Notice that is received by the Tender Agent by the Expiration Deadline.

On the Settlement Date or, in the event of an extension of the Offer Period, on such later date as is notified to Bondholders by the Company, the Company will pay, or procure the payment of, the Purchase Price plus the Accrued Interest Amount to all Bondholders whose Bonds were validly tendered and accepted for purchase by the Company in accordance with the terms and subject to the conditions set out in the Memorandum, subject to receipt of the Bonds.

Expected Timetable

 
  Commencement of Offer               29 September 2016 
   Period 
   Tender Offer and proposed 
   New Issue announced. 
   The Memorandum is available 
   from the Tender Agent, 
   and notice of the Tender 
   Offer delivered to the 
   Clearing Systems for 
   communication to Direct 
   Participants. 
  Expiration Deadline                 7 October 2016, 4:00 
   Final deadline for receipt          p.m. (London time) 
   of valid Electronic Instruction 
   Notices by the Tender 
   Agent in order for Bondholders 
   to be able to participate 
   in the Tender Offer. 
  Announcement of indicative          Expected to be 10 October 
   results of Tender Offer             2016 
   Announcement by the Company 
   of a non-binding indication 
   of each of (i) the Maximum 
   Purchase Amount, (ii) 
   the Final Acceptance 
   Amount and (iii) any 
   pro-ration of tenders 
   (if applicable). 
  Pricing Date and Pricing            Expected to be 10 October 
   Time                                2016 
   Determination of the                The Pricing Time is expected 
   Reference Yield and calculation     to be at or around 11:00 
   of the Purchase Price.              a.m. (London time) on 
                                       the Pricing Date. 
  Announcement of Final               As soon as practicably 
   Results and Pricing                 possible following the 
   Announcement by the Company         Pricing Time. 
   of whether the Company 
   will accept (subject 
   to the satisfaction of 
   the New Issue Condition 
   on or prior to the Settlement 
   Date) Bonds validly tendered 
   for purchase pursuant 
   to the Tender Offer and; 
   if so accepted, (i) the 
   Maximum Purchase Amount, 
   (ii) the Final Acceptance 
   Amount and any pro-ration 
   factor and (iii) the 
   Purchase Price and the 
   Accrued Interest Amount 
   for the Bonds accepted 
   for purchase. 
  Settlement Date                     Expected to be 12 October 
   Subject to the satisfaction         2016 
   of the New Issue Condition, 
   payment of the Purchase 
   Price and Accrued Interest 
   Amount for the Bonds 
   accepted for purchase 
   and settlement of such 
   purchases. 
 

Further Information

A complete description of the terms and conditions of the Tender Offer is set out in the Memorandum. Barclays Bank PLC, Lloyds Bank plc, RBC Europe Limited and The Royal Bank of Scotland plc are the Dealer Managers for the Tender Offer.

Requests for information in relation to the Tender Offer should be directed to:

DEALER MANAGERS

 
 
           Barclays                     Lloyds Bank                   RBC Europe                     The Royal 
           Bank PLC                         plc                         Limited                  Bank of Scotland 
          5 The North                   10 Gresham                     Riverbank                        plc 
           Colonnade                      Street                         House                    135 Bishopsgate 
         Canary Wharf                   London EC2V                   2 Swan Lane                   London EC2M 
            London                          7AE                       London EC4R                       3UR 
            E14 4BB                                                       3BF 
----------------------------  ----------------------------  ----------------------------  ---------------------------- 
 
          Telephone:                    Telephone:                    Telephone:                    Telephone: 
          [phone]                  [phone]                   [phone]                   [phone] 
             8515                          1721                          7420                          5282 
   Email: [e-mail]              Email:                        Email:                        Email: 
        Attn: Liability         liability.management@lloyd    liability.management@rbccm    [e-mail] 
          Management                   sbanking.com                      .com                           m 
             Group                   Attn: Liability               Attn: Liability               Attn: Liability 
                                        Management                    Management                    Management 
                                                                        Group 
----------------------------  ----------------------------  ----------------------------  ---------------------------- 
 

Requests for information in relation to the procedures for participating in the Tender Offer and submitting an Electronic Instruction Notice should be directed to:

THE TER AGENT

Lucid Issuer Services Limited

Tankerton Works

12 Argyle Walk

London WC1H 8HA

United Kingdom

Telephone: [phone]

Email: [e-mail]

Attention: David Shilson

A copy of the Memorandum is available to eligible persons upon request from the Tender Agent.

Each Bondholder is solely responsible for making its own independent appraisal of all matters as such Bondholder deems appropriate and each Bondholder must make its own decision as to whether to tender any or all of its Bonds for purchase pursuant to the Tender Offer. None of the Dealer Managers, the Tender Agent or any of their respective directors, employees or affiliates makes any representation or recommendation whatsoever regarding, or takes any responsibility for, this announcement or the Memorandum or the Tender Offer, and none of the Company, the Guarantor, the Dealer Managers or the Tender Agent or any of their respective bodies, affiliates, agents or employees makes any recommendation in this announcement or the Memorandum or otherwise as to whether or not Bondholders should participate in the Tender Offer.

This announcement must be read in conjunction with the Memorandum. This announcement and the Memorandum contain important information which should be read carefully before any decision is made with respect to the Tender Offer. If any holder is in any doubt as to the action it should take, it is recommended to seek its own advice, including as to any tax consequences, from its stockbroker, bank manager, solicitor, accountant or other independent adviser.

Offer Restrictions

This announcement and the Tender Offer do not constitute an offer to buy or the solicitation of an offer to sell the Bonds in any jurisdiction in which such offer or solicitation is unlawful, and Electronic Instruction Notices by Bondholders originating from any jurisdiction in which such offer or solicitation is unlawful will be rejected.

In those jurisdictions where the securities laws or other laws require the Tender Offer to be made by a licensed broker or dealer, the invitation to participate in the Tender Offer shall be deemed to be made on behalf of the Company by one or more registered brokers or dealers licensed under the laws of such jurisdiction. Neither the delivery of this announcement or the Tender Offer nor any purchase of Bonds shall, under any circumstances, create any implication that there has been no change in the affairs of the Company or the Guarantor since the date hereof, or that the information herein is correct as of any time subsequent to the date hereof.

United States

The Tender Offer is not being made, and will not be made, directly or indirectly, in or into, or by use of the mails, or by any means or instrumentality (including, without limitation: facsimile transmission, telex, telephone, e-mail and other forms of electronic transmission) of interstate or foreign commerce, or of any facility of a national securities exchange, of the United States, and Bonds may not be offered for sale by any such use, means, instrumentality or facility from or within the United States or by persons located or resident in the United States as defined in Regulation S of the Securities Act. Accordingly, copies of this announcement, the Memorandum and any related documents are not being and must not be directly or indirectly distributed, forwarded, mailed, transmitted or sent into or from the United States (including without limitation by any custodian, nominee, trustee or agent). Persons receiving this announcement and the Memorandum (including, without limitation, custodians, nominees, trustees or agents) must not distribute, forward, mail, transmit or send them or any related documents in, into or from the United States or use such mails or any such means, instrumentality or facility in connection with the Tender Offer. Any purported tender of Bonds in the Tender Offer made by a resident of the United States, by any agent, fiduciary or other intermediary acting on a non-discretionary basis for a principal giving instructions from within the United States, or by any US person (as defined in Regulation S under the Securities Act) or by use of such mails or any such means, instrumentality or facility, will not be accepted.

Each holder of Bonds participating in the Tender Offer will represent that it is not located in the United States and is not participating in such Tender Offer from the United States or 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 such Tender Offer from the United States.

For purposes of this announcement and the Memorandum, "United States" refers to the United States of America, its territories and possessions, any State of the United States and the District of Columbia.

United Kingdom

This announcement and the Memorandum have been issued by the Company and are being distributed only to existing holders of the Bonds. The Memorandum is only addressed to such existing holders being investment professionals and high net worth companies/undertakings each within the meaning of the Financial Services and Markets Act 2000 (Financial Promotions) Order 2005 (the "Order"), or other persons to whom it can lawfully be communicated under the Order. The Memorandum is not addressed to or directed at any other person, including any persons who would be retail clients within the meaning of the Financial Conduct Authority (the "FCA") rules and such other persons should not act or rely on it.

Belgium

In Belgium, the Tender Offer will not, directly or indirectly, be made to, or for the account of, any person other than to qualified investors referred to in Article 10, -- 1 of the Belgian law on the public offering of investment instruments and the admission of investment instruments to trading on regulated markets dated 16 June 2006 (the "Belgian Prospectus Law"). This announcement, the Memorandum or any other documentation or material relating to the Tender Offer has not been and will not be submitted to the Financial Services and Markets Authority ("Authorité des services et marches financiers / Autoriteit voor financiële diensten en markten") for approval. Accordingly, in Belgium, the Tender Offer may not be made by way of a public offer within the meaning of articles 3, --1 and 6 of the Belgian act on public takeover offers dated 1 April 2007 (the "Belgian Takeover Act") or as defined in Article 3 of the Belgian Prospectus Law. Therefore, the Tender Offer may not be promoted vis-à-vis, and are not being made to, any person in Belgium (with the exception of "qualified investors" within the meaning of article 10, -- 1 of the Belgian Prospectus Law that are acting for their own account). This announcement, the Memorandum and any other documentation or material relating to the Tender Offer (including memorandums, information circulars, brochures or similar documents) have not been forwarded or made available to, and are not being forwarded or made available to, directly or indirectly, any such person. With regard to Belgium, this announcement and Memorandum have been transmitted only for personal use by the aforementioned qualified investors and only for the purpose of the Tender Offer. Accordingly, the information contained in this announcement and the Memorandum may not be used for any other purpose or be transmitted or disclosed to any other person in Belgium.

Republic of France

The Tender Offer is not being made, directly or indirectly, to the general public in the Republic of France. This announcement, the Memorandum or any other documentation or material relating to the Tender Offer (including memorandums, information circulars, brochures or similar documents) have not been distributed to, and or are not being distributed to, the general public in the Republic of France. Only (i) persons that provide investment services in the field of 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) (that are not individuals) acting for their own account, in each case as defined in or pursuant to articles L.411, L.411-2 and D.411-1 of the French Code Monétaire et Financier, may participate in the Tender Offer. The Memorandum has not been submitted to the clearance procedures of the Authorité des Marchés Financiers.

Republic of Italy

None of the Tender Offer, this announcement, the Memorandum or any other documents or materials relating to the Tender Offer have been or will be submitted to the clearance procedure of the Commissione Nazionale per le Società e la Borsa ("CONSOB") pursuant to Italian laws and regulations. The Tender Offer is being carried out in the Republic of 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 (the "Issuers' Regulation"), as the case may be. The Tender Offer is also being carried out in compliance with article 35-bis, paragraph 7 of the Issuers' Regulation.

A holder of Bonds located in the Republic of Italy can tender the Bonds through authorised persons (such as investment firms, banks or financial intermediaries permitted to conduct such activities in the Republic of 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 September 1, 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 Bonds or the Tender Offer.

This information is provided by RNS

The company news service from the London Stock Exchange

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September 29, 2016 03:13 ET (07:13 GMT)