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.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION TO ANY U.S. PERSON (AS DEFINED BELOW) OR IN OR INTO THE UNITED STATES, ITS TERRITORIES AND POSSESSIONS (INCLUDING PUERTO RICO, THE U.S. VIRGIN ISLANDS, GUAM, AMERICAN SAMOA, WAKE ISLAND AND THE NORTHERN MARIANA ISLANDS, ANY STATE OF THE UNITED STATES AND THE DISTRICT OF COLUMBIA) (together, the United States) OR TO ANY PERSON LOCATED OR RESIDENT IN THE UNITED STATES OR ANY OTHER JURISDICTION WHERE IT IS UNLAWFUL TO DISTRIBUTE THIS ANNOUNCEMENT OR THE EXCHANGE OFFER MEMORANDUM REFERRED TO BELOW
AA Bond Co Limited announces minimum new issue spread
On 21 January 2020, AA Bond Co Limited (the Issuer), a subsidiary of the AA plc (AA plcor the Group) announced an invitation (subject to the 'Offer And Distribution Restrictions' set out below) to eligible holders (the Noteholders) of the £700,000,000 2.875% Sub-Class A5 fixed rate notes due 2022/2043 (ISIN: XS1529687870) (of which £697,249,000 in aggregate principal amount is outstanding) issued by the Issuer (the Existing Notes) to offer to exchange (i) no less than £250,000,000 (the Minimum New Issue Size), and (ii) no more than £325,000,000 (the Maximum Acceptance Amount) of the Existing Notes for the sterling denominated Sub-Class A8 Fixed Rate Notes due 2027/2050 (the New Notes) (the ExchangeOffer).
The Exchange Offer is being made on the terms and subject to the conditions set out in exchange offer memorandum dated 21 January 2020 (the Exchange Offer Memorandum). Capitalised terms used in this announcement but not otherwise defined have the meanings given to them in the Exchange Offer Memorandum.
New Issue Spread
The Issuer has announced that the New Issue Spread (on the basis of which the New Notes Interest Rate will be calculated) has been fixed at 525 basis points.
The New Notes Interest Rate, the New Notes Price and the aggregate principal amount of the New Notes to be issued will be determined by the Issuer at or around 11:00 (London time) (the Pricing Time) on 31 January 2020 (the Price Determination Date).
New Notes Interest Rate
The determination of the New Notes Interest Rate will involve the fixing of the New Notes Reference Security Rate (1.25% per cent. UK Treasury Gilt due 22 July 2027 (ISIN GB00BDRHNP05)) by the Dealer Managers on the Price Determination Date. The New Issue Spread will be added to the New Notes Reference Security Rate for the determination of the New Notes Interest Rate.
New Notes Price
The New Notes Price will be determined in accordance with market convention and expressed as a percentage of the nominal amount of the New Notes.
The Exchange Offer commenced on 21 January 2020 and will expire at 16:00 (London time) on 30 January 2020 (the Expiration Deadline), unless extended, re-opened, withdrawn or terminated at the sole and absolute discretion of the Issuer. Exchange instructions, once submitted, may not be withdrawn except in the limited circumstances outlined in the Exchange Offer Memorandum under the heading 'Procedures for Participating in the Exchange Offer - Revocation of Exchange Instructions'. The deadline set by any intermediary or clearing system may be earlier than the Expiration Deadline.
The New Notes will be sterling denominated Sub-Class A8 Fixed Rate Notes due 2027/2050 and will be issued by the Issuer under the New Notes Base Prospectus. Save in respect of certain commercial terms (including (i) the New Notes Price, (ii) the New Notes Interest Rate (to be determined at the Pricing Time on the Price Determination Date), (iii) that the New Notes will be capable of being redeemed at par by the Issuer on any date occurring on or after 31 January 2027 (being 6-months prior to the Expected Maturity Date of the New Notes) and (iv) that, for the purpose of calculating the Redemption Amount in the event of Issuer Optional Redemption, the date of maturity of the Sub-Class A8 Notes shall be assumed to be 31 January 2027), the New Notes will have substantially the same characteristics as the Existing Notes. The New Notes will be issued in denominations of £100,000 and integral multiples of £1,000 in excess thereof. Application will be made for the New Notes to be admitted to listing on the official list of the Irish Stock Exchange plc trading as Euronext Dublin (Euronext Dublin) and to trading on the Euronext Dublin's regulated market.
S&P has issued a preliminary rating of BBB- on the New Notes, consistent with the current rating on the Existing Notes.
Noteholders are advised to read carefully the Exchange Offer Memorandum for full details of, and information, the procedures for participating in the Exchange Offer.
Noteholders are advised to check with any bank, securities broker or other Intermediary through which they hold Existing Notes when such Intermediary would require to receive instructions from a Noteholder in order for that Noteholder to be able to participate in, or (in the limited circumstances in which revocation is permitted) revoke their instruction to participate in, the Exchange Offer before the deadlines specified in the Exchange Offer Memorandum. The deadlines set by any such Intermediary and each Clearing System for the submission of Exchange Instructions may be earlier than the relevant deadlines specified in the Exchange Offer Memorandum.
For Further Information
A complete description of the terms and conditions of the Exchange Offer is set out in the Exchange Offer Memorandum. Further details about the transaction can be obtained from:
LEAD DEALER MANAGERS
Citigroup Global Markets Limited
London E14 5LB
Telephone: +44 20 7986 8969
Attention: Liability Management Group
Credit Suisse Securities (Europe) Limited
One Cabot Square
London E14 4QJ
Telephone: +44 (0)207 883 8763
Attention: the Liability Management Desk
Barclays Bank PLC
5 The North Colonnade
London E14 4BB
Telephone: +44 (0)203 134 8515
Attention: Liability Management Group
J.P. Morgan Securities plc
25 Bank Street
London E14 5JP
Telephone: +44 20 7134 2468
Lloyds Bank Corporate Markets plc
10 Gresham Street
London EC2V 7AE
Telephone: +44 207 158 1726
Peel Hunt LLP
120 London Wall
London EC2Y 5ET
Telephone: +44 207 418 8900
Attention: DCM Team
Lucid Issuer Services Limited
12 Argyle Walk
London WC1H 8HA
Telephone: +44 20 7704 0880
Attention: Thomas Choquet
A copy of the Exchange Offer Memorandum is available to eligible persons upon request from the Exchange Agent.
This announcement is released by the Issuer and contains information that qualified or may have qualified as inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 (MAR), encompassing information relating to the Exchange Offer described above. For the purposes of MAR and Article 2 of Commission Implementing Regulation (EU) 2016/1055, this announcement is made by Nadia Hoosen, Chief Legal Officer and Company Secretary at AA plc.
This announcement must be read in conjunction with the Exchange Offer Memorandum. Each Noteholder is solely responsible for making its own independent appraisal of all matters as such Noteholder deems appropriate (including those relating to the Exchange Offer, the Notes, the Borrower, the Obligors, the Issuer and the Exchange Offer Memorandum) and each Noteholder must make its own decision as to whether to Exchange any or all of its Notes for purchase pursuant to the Exchange Offer based upon its own judgement and having obtained advice from such financial, accounting, legal and tax advisers as it may deem necessary. Accordingly, each person receiving this announcement and the Exchange Offer Memorandum acknowledges that such person has not relied upon the Obligors, the Issuer, the Dealer Managers or the Exchange Agent in connection with its decision as to whether to Exchange all or any of its Notes for purchase pursuant to the Exchange Offer. None of the Dealer Managers or the Exchange Agent (or their respective directors, employees or affiliates) makes any representation or recommendation whatsoever regarding this announcement, the Exchange Offer Memorandum or the Exchange Offer, and none of the Obligors, the Issuer, the Dealer Managers or the Exchange Agent (or their respective directors, employees or affiliates) makes any recommendation as to whether Noteholders should Exchange Notes in the Exchange Offer and no one has been authorised by any of them to make such recommendation. The Exchange Agent is the agent of the Issuer and the Obligors and owes no duty to any Noteholder.
Offer and Distribution Restrictions
This Announcement and the Exchange Offer Memorandum do not constitute invitations to participate in the Exchange Offer in any jurisdiction in which, or to or from any person to or from whom, it is unlawful to make such invitation or for there to be such participation under applicable securities laws. The distribution of this Announcement and the Exchange Offer Memorandum in certain jurisdictions may be restricted by law. Persons into whose possession this Announcement and the Exchange Offer Memorandum come are required by each of the Issuer, the Borrower, the Obligors, the Dealer Managers and the Exchange Agent to inform themselves about and to observe any such restrictions.
No action has been or will be taken in any jurisdiction by the Issuer, the Borrower, the Obligors, the Dealer Managers or the Exchange Agent in relation to the Exchange Offer that would permit a public offering of securities. This Announcement and the Exchange Offer Memorandum have been prepared on the basis that the Exchange Offer will be made pursuant to an exemption under the Prospectus Regulation from the requirement to publish a prospectus for any offer of securities.
The Exchange Offer is not being made or offered and will not be made or offered, directly or indirectly, in or into, or by use of the mails of, or by any means or instrumentality of interstate or foreign commerce of, or of any facilities of a national securities exchange of, the United States or to or for the account or benefit of, any U.S. Person (as defined in Regulation S of the Securities Act (each a U.S. Person)). This includes, but is not limited to, facsimile transmission, electronic mail, telex, telephone, the internet and other forms of electronic communication. Accordingly, copies of this Announcement and the Exchange Offer Memorandum and any other documents or materials relating to the Exchange Offer are not being, and must not be, directly or indirectly, mailed or otherwise transmitted, distributed or forwarded (including, without limitation, by custodians, nominees or trustees) in or into the United States or to a U.S. Person and the Existing Notes cannot be offered in the Exchange Offer by any such use, means, instrumentality or facility or from or within or by persons located or resident in the United States or by any U.S. Person. Any purported offer resulting directly or indirectly from a violation of these restrictions will be invalid and any purported offer made by a person located in the United States, a U.S. Person, by any person acting for the account or benefit of a U.S. Person, or by any agent, fiduciary or other intermediary acting on a non-discretionary basis for a principal giving instructions from within the United States or for a U.S. Person will be invalid and will not be accepted.
This Announcement and the Exchange Offer Memorandum are not offers of securities for sale in the United States or to, or for the account or benefit of, U.S. Persons. The Existing Notes and the New Notes may not be offered or sold in the United States absent registration under, or an exemption from the registration requirements of, the Securities Act. The Existing Notes and the New Notes 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, in the United States or to, or for the account or benefit of, U.S. Persons. The purpose of this Announcement and the Exchange Offer Memorandum is limited to the Exchange Offer and this Announcement and the Exchange Offer Memorandum may not be sent or given to a person in the United States or to a U.S. Person or otherwise to any person other than in an offshore transaction in accordance with Regulation S under the Securities Act.
Each Noteholder participating in the Exchange Offer will represent that it is not located in the United States and not participating in the Exchange Offer from the United States, that it is participating in the Exchange Offer in accordance with Regulation S under the Securities Act and that it is not a U.S. Person 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 the Exchange Offer from the United States and who is not a U.S. Person. As used herein and elsewhere in this Announcement and the Exchange Offer Memorandum, United Statesmeans the United States of America, its territories and possessions (including Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the Northern Mariana Islands), any state of the United States of America and the District of Columbia.
MIFID II product governance / Professional investors and ECPs only target market
Solely for the purposes of each manufacturer's product approval process, the target market assessment in respect of the New Notes has led to the conclusion that: (i) the target market for the New Notes is eligible counterparties and professional clients only, each as defined in Directive 2014/65/EU (as amended, MiFID II); and (ii) all channels for distribution of the New Notes to eligible counterparties and professional clients are appropriate. Any person subsequently offering, selling or recommending the New Notes (a distributor) should take into consideration the manufacturers' target market assessment; however, a distributor subject to MiFID II is responsible for undertaking its own target market assessment in respect of the Exchange Offer (by either adopting or refining the manufacturers' target market assessment) and determining appropriate distribution channels.
Prohibition of sales to EEA and UK retail investors
The Exchange Offer is not intended to be made to and should not be made to any retail investor in the European Economic Area (EEA) or in the United Kingdom (UK). For these purposes, a retail investor means a person who is one (or more) of: (i) a retail client as defined in point (11) of Article 4(1) of MiFID II; or (ii) a customer within the meaning of Directive (EU) 2016/97, where that customer would not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II. Consequently, no key information document required by Regulation (EU) No 1286/2014 (as amended, the PRIIPs Regulation) for offering or selling notes or otherwise making them available to retail investors in the EEA or in the UK has been prepared and therefore offering or selling the New Notes or otherwise making them available to any retail investor in the EEA or in the UK may be unlawful under the PRIIPs Regulation.
The communication of this Announcement and the Exchange Offer Memorandum and any other documents or materials relating to the Exchange Offer is not being made, and such documents and/or materials have not been approved, by an authorised person for the purposes of section 21 of the Financial Services and Markets Act 2000 (as amended, FSMA). Accordingly, such documents and/or materials are not being distributed to, and must not be passed on to, the general public in the United Kingdom. The communication of such documents and/or materials is exempt from the restriction on financial promotions under section 21 of the FSMA on the basis that it is only directed at and may be communicated to (1) those persons in the United Kingdom falling within the definition of investment professionals (as defined in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the Financial Promotion Order)) or persons who are within Article 43 or 49 of the Financial Promotion Order and (2) to any other persons to whom it may otherwise lawfully be made under the Financial Promotion Order.
The Exchange Offer is not being made, directly or indirectly, in the Republic of France (France) other than to qualified investors (investisseurs qualifiés) as defined in Article L.411-2 1° of the French Code monétaire et financier. Neither this Exchange Offer Memorandum nor any other documents or materials relating to the Exchange Offer have been or shall be distributed in France other than to qualified investors (investisseurs qualifiés) and only qualified investors (investisseurs qualifiés) are eligible to participate in the Exchange Offer. This Exchange Offer Memorandum and any other document or material relating to the Exchange Offer have not been and will not be submitted for clearance to nor approved by the Autorité des marchés financiers.
None of the Exchange Offer, this Announcement and the Exchange Offer Memorandum or any other documents or materials relating to the Exchange Offer or the New Notes have been or will be submitted to the clearance procedures of the Commissione Nazionale per le Società e la Borsa(the CONSOB) pursuant to Italian laws and regulations.
The Exchange Offer is being carried out in the Republic of Italy (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.
Accordingly, Noteholders or beneficial owners of the Existing Notes that are located in Italy may make an Offer to Exchange through authorised persons (such as investment firms, banks or financial intermediaries permitted to conduct such activities in Italy in accordance with the Financial Services Act, CONSOB Regulation No. 20307 of 15 February 2018, as amended from time to time, and Legislative Decree No. 385 of 1 September 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-a-vis its clients in connection with the Existing Notes, the New Notes, the Exchange Offer or this Announcement and the Exchange Offer Memorandum.
This Announcement, the Exchange Offer Memorandum or the electronic transmission thereof do not constitute an offer to buy the New Notes or the solicitation of an offer to sell the Existing Notes and/or the New Notes, and Offers to Exchange will not be accepted from Noteholders in any circumstances in which such offer or solicitation is unlawful. In those jurisdictions where the securities, blue sky or other laws require an exchange offer to be made by a licensed broker or dealer and any of the Dealer Managers or any of their respective affiliates is such a licensed broker or dealer or similar in any such jurisdiction, the Exchange Offer shall be deemed to be made in such jurisdictions by such Dealer Manager or such affiliate, as the case may be, on behalf of the Issuer in such jurisdiction.
No action has been or will be taken in any jurisdiction by the Issuer, the Borrower, the Obligors, the Dealer Managers or the Exchange Agent that would permit a public offering of the New Notes.
In addition to the representations referred to above in respect of the United States, each Noteholder participating in the Exchange Offer will also be deemed to give certain representations in respect of the other jurisdictions referred to above and generally as set out in 'Procedures for Participating in the Exchange Offer' in the Exchange Offer Memorandum. Any offer from a Noteholder that is unable to make these representations will not be accepted.
Each of the Issuer, the Dealer Managers and the Exchange Agent reserves the right, in its sole and absolute discretion, to investigate, in relation to any offer to exchange whether any such representation given by a Noteholder is correct and, if such investigation is undertaken and as a result the Issuer determines (for any reason) that such representation is not correct, such offer to exchange may be rejected.