Meadowhall gives results of consent bid for three series due 2037

By Sarah Lizee

Olympia, Wash., July 9 – Meadowhall Finance plc announced the results of the consent solicitation for its £605 million 4.986% class A1 bonds due 2037 (ISIN: XS0278325476), £60 million class A2 floating-rate bonds due 2037 (ISIN: XS0278327415) and £175 million 4.988% class B bonds due 2037 (ISIN: XS0278326441) to waive and amend some terms of the issuer-borrower loan agreement and the cash management agreement to which Meadowhall is a party.

Extraordinary resolutions for each class were passed following bondholder meetings, the issuer said in a London Stock Exchange notice.

As previously reported, Meadowhall offered a consent fee of 5 bps to holders who submit voting instructions in favor or against the resolutions at or prior to the early deadline, subject to all extraordinary resolutions being passed and the satisfaction of the other solicitation conditions.

The issuer said the need for these waivers and amendments has arisen directly due to the Covid-19 pandemic.

“The Covid-19 outbreak has materially affected many sectors and industries including the U.K. retail industry and the restrictions have severely limited the ability of many U.K. retailers to operate their physical outlets including those located in the Meadowhall Shopping Centre,” the issuer said in the notice.

In the absence of the proposed waivers and amendments, and with the expectation of lower rental income over the coming quarters due to the ongoing impact of Covid-19 restrictions, the borrower may not be able to meet the gross coverage ratio and the net coverage ratio requirements in the issuer-borrower loan agreement in the short term and may not be able to meet certain payments which will fall due and payable under the issuer-borrower loan agreement.

This may give rise to a payment default under the agreement and a breach of the gross coverage ratio requirement and therefore give rise to loan events of default and/or potentially trigger an obligation to appoint a property adviser.

Those events will not in and of themselves trigger an event of default in relation to, or a right to accelerate, the relevant bonds but they could result in the issuer having to make drawings under the liquidity facility until the rent payments have stabilized in order to meet payments that will fall due in respect of the relevant bonds.

The amount of drawings under the liquidity facility will be dependent on the amount of rent received.

The amendments would effectively allow the borrower a 12-month period while Meadowhall reopens following the lifting of the Covid-19 restrictions and trading and rent payments stabilize and a further 12-month period thereafter to repay overdue amounts.

The early instruction deadline was noon on July 6, extended from noon ET on July 1.

The deadline to deliver voting instructions was noon ET on July 6.

Meetings were held in London on July 9 at 5 a.m. ET for holders of class A1 bonds, 5:30 a.m. ET for holders of class A2 bonds and 6 a.m. ET for holders of class B bonds.

The solicitation agent is NatWest Markets plc (+44 20 7678 5282, liabilitymanagement@natwestmarkets.com).

The tabulation agent is Lucid Issuer Services Ltd. (+44 20 7704 0880, meadowhall@lucid-is.com).

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