John Lewis increases consent fee for 8.375%, 6.125%, 4.25% bonds

By Angela McDaniels

Tacoma, Wash., Oct. 31 – John Lewis plc increased the consent fee it is offering to holders of its £275 million 8.375% bonds due 2019, £300 million 6.125% bonds due 2025 and £300 million 4.25% bonds due 2034, according to a filing with the London Stock Exchange.

The revised consent fee is 0.375% for the 8.375% bonds, 0.45% for the 6.125% bonds and 0.5% for the 4.25% bonds. Prior to the increase, the consent fee on offer was 0.25% for each series.

The deadline for submitting electronic voting instructions in favor of the amendments remains 5 a.m. ET on Nov. 7, and bondholders will vote on the changes at meetings set for Nov. 9.

As announced Oct. 17, the company is soliciting consents “to align the total borrowings covenant more closely with market precedents.”

The change would allow “for a fairer reflection of the company’s balance sheet strength given its build-up of significant cash balances,” and the amendments also “reflect the possibility that John Lewis may obtain a credit rating in the future, in which case it would be consistent with market practice for the existing borrowing covenants not to apply for so long as the issuer is assigned an investment-grade rating,” according to a prior filing.

The covenants are from the company’s first benchmark bond issue in 1989, the company noted.

Under the solicitation, the issuer is seeking to amend the covenants on restrictions on borrowing and charging to insert new definitions of “cash and cash equivalents” and “net moneys borrowed” so that the borrowing covenant refers to the net borrowings of John Lewis rather than to gross borrowings as is currently set.

Also, the company is asking to insert a new condition so that, as long as the note series or the unsecured unsubordinated debt obligations of John Lewis are assigned an investment-grade rating by one or more of the rating agencies, the borrowing covenants will cease to apply to John Lewis.

When the consents solicitation began, the company was offering a 0.25% consent fee to holders who submitted electronic voting instructions for the amendments by the early deadline, 11 a.m. ET on Oct. 28, and a 0.1% consent fee to those who submitted electronic voting instructions after the early deadline but prior to the final deadline, 5 a.m. ET on Nov. 7.

On Oct. 25, the company changed the consent fee to 0.25% for all holders who tendered by the final deadline.

The solicitation agents are HSBC Bank plc (+44 207 992 6237 or LM_EMEA@hsbc.com) and J.P. Morgan Securities plc (+44 207 134 2468 or emea_lm@jpmorgan.com). The tabulation agent is Lucid Issuer Services Ltd. (+44 20 7704 0880 or johnlewis@lucid-is.com).

John Lewis is a department store chain based in London.

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