NGG Finance begins tender offer for €1.25 billion capital securities

By Angela McDaniels

Tacoma, Wash., Aug. 27 – NGG Finance plc began a tender offer for its €1.25 billion fixed-rate resettable capital securities due 2076, according to a filing with the London Stock Exchange.

The purchase price will be determined on the basis of a yield to the first optional redemption date, June 18, 2020, of negative 0.25%. Assuming a settlement date of Sept. 5, the purchase price will be 103.537. If the settlement date changes, the purchase price will be recalculated.

The company will also pay accrued interest.

The tender offer deadline is 11 a.m. ET on Sept. 2.

Tender instructions must be submitted for a minimum of €100,000 and in integral multiples of €1,000 onwards.

The company plans to cancel any capital securities purchased in the offer.

NGG Finance plans to issue new capital securities guaranteed by National Grid plc. Whether NGG Finance purchases any existing capital securities in the tender offer is subject to the successful completion of the new issue.

The amount of existing capital securities accepted for purchase in the tender offer will be no greater than an amount to be determined by reference to the principal amount of new capital securities issued. NGG Finance expects to announce the amount to be accepted following pricing of the new capital securities, which is expected to be on Aug. 29.

When considering allocation of the new capital securities, NGG Finance may give preference to holders who have tendered their existing capital securities or have given a firm intention to do so. The minimum denomination of the new capital securities is €100,000.

If 80% or more of the existing capital securities have been repurchased and canceled or redeemed, NGG Finance has the option to redeem all, but not some only, of the remaining capital securities at par plus accrued interest. The company plans to exercise this option if it receives enough proceeds from the new issue to do so.

The company said the rationale of the offer and the new issue is to proactively manage its hybrid capital.

The dealer managers are Barclays Bank plc (+44 20 3134 8515 or eu.lm@barclays.com), BNP Paribas (+44 20 7595 8668 or liability.management@bnpparibas.com), Goldman Sachs International (+44 20 7552 6157 or liabilitymanagement.eu@gs.com) and J.P. Morgan Securities plc (+44 20 7134 2468 or emea_lm@jpmorgan.com).

The tender agent is Lucid Issuer Services Ltd. (+44 20 7704 0880 or ngrid@lucid-is.com).

National Grid is a London-based electricity and gas utility.

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