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Pennon Group PLC Tender Offer for Notes Due 2022

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16 March 2021 .  Pennon Group plc[1] (the Company) announces today an invitation to holders of its £100,000,000 Variable Rate Notes due 2022 (ISIN: XS0311717929) (the Notes) to tender such Notes for purchase by the Company for cash (such invitation, the Offer).  The Offer is being made on the terms and subject to the conditions contained in the tender offer memorandum dated 16 March 2021 (the Tender Offer Memorandum) prepared by the Company, and is subject to the offer restrictions set out below and as more fully described in the Tender Offer Memorandum.

For detailed terms of the Offer, please refer to the Tender Offer Memorandum, copies of which are (subject to distribution restrictions) available from the Tender Agent as set out below.  Capitalised terms used in this announcement but not defined have the meanings given to them in the Tender Offer Memorandum.

Rationale for the Offer  

The Offer is being made to efficiently manage the Company's finance costs, following the sale of Viridor early this financial year.

Notes purchased by the Company pursuant to the Offer are expected to be cancelled and will not be re-issued or re-sold.

Summary of the Offer

A summary of certain of the terms of the Offer appears below:

Description
of the Notes

ISIN/ Common Code

Maturity Date

Outstanding Principal Amount

Benchmark Security

Purchase Spread

Amount subject
to the Offer

£100,000,000
Variable Rate Notes due 2022

XS0311717929 / 031171792

13 July 2022

£100,000,000

0.50 per cent. UK Treasury Gilt due July 2022 (ISIN: GB00BD0PCK97)

25 basis points (determined on a semi-annual basis)

Any and all

Details of the Offer

Purchase Price and Accrued Coupon Amount

The Company will pay, for Notes accepted by it for purchase pursuant to the Offer, a cash purchase price (the Purchase Price) to be determined at or around 2.00 p.m. (London time) on 24 March 2021 (the Pricing Time) in the manner described in the Tender Offer Memorandum by reference to the sum (expressed as a percentage rounded to the third decimal place (with 0.0005 being rounded upwards)) (such sum, the Purchase Yield) of (i) the purchase spread of 25 bps (determined on a semi-annual basis) (the Purchase Spread) and (ii) the Benchmark Security Rate.

The Purchase Price will be determined in accordance with market convention and expressed as a percentage of the principal amount of the Notes accepted for purchase pursuant to the Offer (rounded to the nearest 0.001 per cent., with 0.0005 per cent. rounded upwards), and is intended to reflect a yield to the scheduled maturity date of the Notes on the Settlement Date equal to the Purchase Yield. Specifically, the Purchase Price will equal (a) the value of all remaining payments of principal and coupon amounts on the Notes up to and including maturity, discounted to the Settlement Date at a discount rate equal to the Purchase Yield, minus (b) the Accrued Coupon Amount.

The Company will also pay an Accrued Coupon Amount Payment in respect of Notes accepted by it for purchase pursuant to the Offer.

Tender Instructions

In order to participate in, and be eligible to receive the Purchase Price and the Accrued Coupon Amount Payment pursuant to, the Offer, Holders must validly tender their Notes for purchase by delivering, or arranging to have delivered on their behalf, a valid Tender Instruction that is received by the Tender Agent by 4.00 p.m. (London time) on 23 March 2021 unless extended, re-opened, amended and/or terminated as provided in the Tender Offer Memorandum.  Tender Instructions will be irrevocable except in the limited circumstances described in the Tender Offer Memorandum.

Tender Instructions must be submitted in respect of a minimum principal amount of Notes of no less than £50,000, being the minimum denomination of the Notes, and may be submitted in integral amounts of £50,000 thereafter.

Indicative Timetable for the Offer

Events

 

Times and Dates

Commencement of the Offer

 

 

Announcement of Offer.  Tender Offer Memorandum available from the Tender Agent.

 

16 March 2021

Expiration Deadline

 

 

Final deadline for receipt of valid Tender Instructions by the Tender Agent in order for Holders to be able to participate in the Offer.

 

4.00 p.m. (London time) on 23 March 2021

Pricing Time

 

 

Determination of the Benchmark Security Rate and calculation of the Purchase Yield and Purchase Price.

 

At or around 2.00 p.m. (London time) on 24 March 2021

Announcement of Results

 

 

Announcement of whether the Company will accept valid tenders of Notes for purchase pursuant to the Offer and, if so accepted, the aggregate principal amount of the Notes accepted for purchase, the Benchmark Security Rate, the Purchase Yield and the Purchase Price.

 

As soon as reasonably practicable after the Pricing Time

Settlement Date

 

 

Expected Settlement Date for the Offer.

 

26 March 2021

The Company may, in its sole discretion, extend, re-open, amend or terminate the Offer at any time (subject to applicable law and as provided in the Tender Offer Memorandum) and the above times and dates are subject to the right of the Company to so extend, re-open, amend and/or terminate the Offer.

Holders are advised to check with any bank, securities broker or other intermediary through which they hold Notes when such intermediary would need to receive instructions from a Holder in order for that Holder to be able to participate in, or (in the limited circumstances in which revocation is permitted) revoke their instruction to participate in, the Offer by the deadlines set out above.  The deadlines set by any such intermediary and each Clearing System for the submission and revocation of Tender Instructions will be earlier than the relevant deadlines set out above and in the Tender Offer Memorandum.

Unless stated otherwise, announcements in connection with the Offer will be made by the Company by (i) publication through RNS and (ii) the delivery of notices to the Clearing Systems for communication to Direct Participants.  Such announcements may also be made (a) on the relevant Reuters Insider Screen and/or (b) by the issue of a press release to a Notifying News Service. Copies of all such announcements, press releases and notices can also be obtained upon request from the Tender Agent, the contact details for which are below.  Significant delays may be experienced where notices are delivered to the Clearing Systems and Holders are urged to contact the Tender Agent for the relevant announcements during the course of the Offer. In addition, Holders may contact the Dealer Manager for information using the contact details below.

The Offer has been considered by a significant investor who holds, in aggregate 50 per cent. of the outstanding principal amount of the Notes. The investor has informed the Company that they find the Offer acceptable and that, subject to client and other approvals, they intend to participate in the Offer in respect of their holdings of Notes. The investor has advised the Company that this recommendation relates only to the Offer set out in the Tender Offer Memorandum and does not relate to any future offers or proposals which the Company may make. Holders should nonetheless undertake their own detailed assessment of the Offer.

Holders are advised to read carefully the Tender Offer Memorandum for full details of and information on the procedures for participating in the Offer.

Barclays Bank PLC is acting as Dealer Manager for the Offer and Lucid Issuer Services Limited is acting as Tender Agent.

Questions and requests for assistance in connection with the Offer may be directed to the Dealer Manager.

 

The Dealer Manager

Barclays Bank PLC

5 The North Colonnade

Canary Wharf

London E14 4BB

Telephone: +44 203 134 8515

Attention: Liability Management Group

Email: eu.lm@barclays.com

 

Questions and requests for assistance in connection with the procedures for participating in the Offer, including the delivery of Tender Instructions, may be directed to the Tender Agent.

The Tender Agent

Lucid Issuer Services Limited

Tankerton Works

12 Argyle Walk

London WC1H 8HA

Telephone: +44 20 7704 0880

Attention: Owen Morris

Email: pennon@lucid-is.com