National Grid Gas gives results of tender offers for nine note series

By Susanna Moon

Chicago, Sept. 22 – National Grid Gas plc and National Grid Electricity Transmission plc announced the results of their tender offers that ended at 11 a.m. ET on Sept. 15.

After settlement on Sept. 22, there will be left outstanding £138,650,000 of 6.375% notes due March 3, 2020; £265,040,000 of 4.1875% bonds due 2022; £149,801,000 of the 5.875% bonds due 2024; £82,141,000 of the 7% guaranteed bonds due 2024; £22,298,000 of the 8.75% bonds due 2025; £251,259,000 of the 4% instruments due June 8, 2027; £62,682,000 of the 6.5% notes due 2028; £92,129,000 of the 7.375% notes due January 2031; and £61,421,000 of the 6% notes due May 2038.

The company announced the indicative results on Sept. 16, along with the purchase prices for the offers.

In addition, the company said the new issue condition has been met.

As previously announced, National Grid Gas received tenders for

• £139.35 million of its £278 million outstanding 6.375% instruments due March 3, 2020;

• £138,584,000 of its £403,624,000 outstanding 4.1875% guaranteed index-linked bonds due 2022;

• £135,254,000 of its £217,395,000 outstanding 7% guaranteed bonds due 2024;

• £88,808,000 of its £111,106,000 outstanding 8.75% bonds due 2025; and

• £395,579,000 of its £457 million outstanding 6% instruments due May 2038.

The company previously said that if it decided to accept the tenders of a series of notes, it would accept all of the tendered notes of that series.

National Grid Electricity Transmission received tenders for

• £174,119,000 of its £323.92 million outstanding 5.875% bonds due 2024;

• £273,741,000 of its £525 million outstanding 4% instruments due June 8, 2027;

• £200,488,000 of its £263.17 million outstanding 6.5% notes due 2028; and

• £218,648,000 of its £310,777,000 outstanding 7.375% instruments due January 2031.

The company previously said it expected to accept all of the tendered notes.

The company said it decided to accept for purchase all of the 2020 notes, the 2022 notes, the December 2024 notes, the 2025 notes and the 2038 notes tendered for purchase under the offer.

When the offers began on Sept. 6, National Grid Electricity Transmission said it planned to accept an amount of its notes up to £1 billion less the amount tendered in National Grid Gas’ offer but reserved the right to accept significantly more or less than that amount.

Pricing

Pricing was set at 7 a.m. ET on Sept. 16.

National Grid Gas set a purchase price of

• 121.252% of par for its 6.375% instruments using the 4.75% U.K. Treasury gilt due 2020 plus 5 basis points for a purchase yield of 0.179%;

• 211.459% of par for its 4.1875% bonds using the 2.5% index-linked U.K. Treasury stock due 2020 plus 115 bps for purchase yield of negative 1.121%;

• 147.456% pf par for its 7% bonds using the 2.75% U.K. Treasury gilt due 2024 plus 35 bps for a purchase yield of 0.973%;

• 164.19% of par for its 8.75% bonds using the 5% U.K. Treasury gilt due 2025 plus 35 bps for a purchase yield of 1.046%; and

• 172.483% of par for its 6% instruments using the 4.75% U.K. Treasury gilt due 2038 plus 40 bps for a purchase yield of 1.888%.

National Grid Electricity Transmission set a purchase price of

• 135.507% of par for its 5.875% bonds using the 2.75% U.K. Treasury gilt due 2024 plus 25 bps for a purchase yield of 0.873%;

• 126.835% of par for its 4% instruments using the 4.25% U.K. Treasury gilt due 2027 plus 35 bps for a purchase yield of 1.299%;

• 155.979% of par for its 6.5% notes using the 6% U.K. Treasury gilt due 2028 based on 35 bps for a purchase yield of 1.353%; and

• 174.485% of par for its 7.375% instruments using the 4.75% U.K. Treasury gilt due 2030 plus 40 bps for a purchase yield of 1.536%.

Except for the 4.1875% bonds, the purchase prices are intended to reflect a yield to maturity of the notes on the settlement date based on the purchase yield.

For the 4.1875% bonds, the purchase price equals the “dirty price” at which the real redemption yield on the notes to the original maturity date would be equal to the purchase yield.

Holders also will receive accrued interest.

The settlement date will be Sept. 22.

National Grid Gas is expecting to dispose of a majority stake in its U.K. gas distribution business, which will result in the transfer of its U.K. gas distribution business to a newly created subsidiary and the expected subsequent sale of a 51% controlling interest in the subsidiary to a third-party acquirer. Afterward, National Grid Gas will become a more focused gas transmission business, according to a previous company notice.

The tender offers were conditioned on the issue of new euro- and sterling-denominated notes by National Grid Gas Finance plc under its £6 billion euro medium-term notes program.

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), HSBC Bank plc (+44 20 7992 6237 or liability.management@hsbcib.com), Merrill Lynch International (+44 20 7996 5420 or DG.LM_EMEA@baml.com) and Morgan Stanley & Co. International plc (+44 20 7677 5040 or liabilitymanagementeurope@morganstanley.com). Lucid Issuer Services Ltd. (+44 20 7704 0880, fax +44 20 3004 1590 or ngrid@lucid-is.com) is the tender agent.

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

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