Annington raises cap on tender offer for two notes to £400 million

By Marisa Wong

Los Angeles, Aug. 1 – Annington Funding plc announced it intends to increase the overall target acceptance amount under its July 28 tender offer for two series of notes to £400 million (or the euro equivalent) from £300 million (or the euro equivalent).

Annington is increasing the tender cap after having priced £400 million of new 4.75% notes due 2033, proceeds of which will be used to fund the tender offers, according to a Monday press release.

As previously reported, the company is separately inviting holders of its outstanding €600 million 1.65% notes due July 12, 2024 (ISIN: XS1645519031) and £625 million 2.646% notes due July 12, 2025 (ISIN: XS1645518496), each guaranteed by Annington Ltd., Annington Homes Ltd. and Annington Property Ltd., to tender their notes for purchase for cash, up to an aggregate principal amount.

If the aggregate amount of notes tendered exceeds the final acceptance amount, notes will be accepted according to acceptance priority level and with proration applied. The 2024 notes have priority in acceptance over the 2025 notes.

The purchase price for the 2024 notes will be based on the 2024 notes’ interpolated mid-swap rate and a purchase spread of 75 basis points, and the purchase price for the 2025 notes will be based on the 0.625% U.K. Treasury due June 2025 and a purchase spread of 200 bps.

The company will also pay accrued interest in addition to the purchase price.

The par call date will be used if the purchase yield is less than the contractual rate of interest for the relevant notes. Otherwise, the maturity date will be used. The par call date for the 2024 notes is June 12, 2024. The par call date for the 2025 notes is June 12, 2025.

Pricing will be determined at 7 a.m. ET on Aug. 5.

Tender instructions must be delivered by 11 a.m. ET on Aug. 4.

Settlement is slated for Aug. 9.

The tender offers are conditioned on the issuance of new notes, which is also expected to close on Aug. 9.

The company said it is conducting the tender offers and new notes offering to proactively manage its balance sheet and maturity profiles.

Annington Homes is a London-based provider of privately rented homes in the United Kingdom.

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