Financial Guaranty starts consent solicitation for Northern Gas bonds

Chicago, Sept. 21 – Financial Guaranty UK Ltd. started a consent solicitation for £255 million outstanding 4 7/8% guaranteed bonds due 2035 (ISIN: XS0234964533) that were issued by Northern Gas Networks Finance plc and guaranteed by Northern Gas Networks Ltd., according to announcement.

Financial Guaranty is undergoing a de-risking exercise in relation to its financial guarantee portfolio.

The consent solicitation relates to proposed amendments to terminate the financial guarantee of Financial Guaranty in respect of the bonds, while retaining the same covenant package, and to remove the financial guarantor's principal rights as controlling creditor in relation to the bonds.

The removal of the financial guarantor's principal rights will result in the holders of the bonds having a decision-making role in relation to certain material matters under the bonds and the trust deed, including the right to direct the trustee to take enforcement action against the issuer and/or Northern Gas Networks without the financial guarantor's involvement.

If an extraordinary resolution is passed, the eligibility condition is satisfied and the other conditions to the consent solicitation are satisfied (or waived), then the financial guarantor will pay a cash payment of £5 for each £1,000 principal amount of bonds that are validly voted at the meeting to bondholders who deliver valid solicitation instructions to the tabulation agent by the early participation deadline.

To be passed, the extraordinary resolution requires support of at least 75% of the votes cast at the meeting, which will be held via teleconference.

The early participation deadline is 11 a.m. ET on Oct. 1.

The deadline is 11 a.m. ET on Oct. 8

The meeting will start at 5:30 a.m. ET on Oct. 13.

Payment is expected for the third business day following the passing of the extraordinary resolution.

Barclays is the solicitation agent (+44 20 3134 8515, eu.lm@barclays.com).

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

Previously, Financial Guaranty was known as FGIC UK Ltd. The company is a London-based insurance company.

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