Dignity Finance wins approval for amendments from consent solicitation

Chicago, Sept. 29 – Dignity Finance plc, subsidiary of Dignity plc, announced the results of the meeting held in relation to the consent solicitation for its £238,904,000 class A secured 3.5456% notes due 2034 (ISIN: XS1115295823).

There are currently £165,433,850 of the notes outstanding.

A meeting was held at 6 a.m. ET on Sept. 29. The issuer said that a quorum was achieved with noteholders for 99.92% principal amount of notes represented at the meeting and votes in favor tallying 94.42% from those present.

Accordingly, the extraordinary resolution for amendments to the issuer/borrower loan agreement and waivers to the tax deed of covenant have been approved.

Payment of the instruction fee of 0.25% will be made to noteholders on Oct. 6.

Background

Dignity was seeking certain consents from noteholders for a potential transaction involving the realization of value from selected crematoria assets, with the proceeds being applied in a partial redemption of the company’s class A notes.

The consents will apply for 12 months.

Dignity was also seeking a series of amendments to provisions within the financing documents in order to provide operational flexibilities and to bring the Dignity financing structure more in line with recent securitization procedures.

As a condition to the consent proposal, Dignity would be required to inject a minimum of £70 million into the securitization group companies to partially repay some of the class A notes outstanding (including the payment of a redemption premium) in consideration for assets leaving the securitization group, if a potential transaction in relation to the crematoria assets becomes unconditional within 12 months of the class A noteholders' approval referred to above. This will result in a deleveraging of the Group and a positive impact on the underlying financial ratios.

The assets that are subject to the proposals are seven crematoria where the freehold and leasehold properties are owned by companies outside of the securitization group and leased to Dignity Funerals Ltd. (a company in the financing ringfence).

The portfolio is expected to generate a total of £6.7 million EBITDA (2022 budget) for the group. As part of any potential transaction involving these crematoria assets, Dignity may enter into an agreement to continue to operate these assets.

The consent proposal had been considered by a special committee consisting of noteholders and convened by the Investment Association at the request of Dignity Finance. The members of the special committee, who hold in aggregate approximately 61% of the current principal amount outstanding of the class A notes had examined the proposal and informed Dignity Finance that they found it acceptable before the start of the consent solicitation.

Details

NatWest Markets plc is the sole solicitation agent (+44 20 7678 5222, liabilitymangement@natwestmarkets.com).

The tabulation agent is Kroll Issuer Services Ltd. (+44 20 7704 0880, dignity@is.kroll.com, https://deals.is.kroll.com/dignity).

Dignity plc is a Sutton Coalfield, England-based holding company. The company, along with its subsidiaries, provides funeral services.

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