NGG Finance to accept €1.02 billion of securities in tender offer

By Sarah Lizee

Olympia, Wash., Sept. 3 – National Grid plc subsidiary NGG Finance plc announced results of its tender offer for its €1.25 billion fixed-rate resettable capital securities due 2076, according to a filing with the London Stock Exchange.

As of the deadline, which was 11 a.m. ET on Sept. 2, the company received valid tenders for €1,019,116,000 of the securities. The company said it will accept all of the notes tendered in the offer.

The notes will be purchased in full with no pro rata scaling.

The purchase price was set at 103.537, determined on the basis of a yield to the first optional redemption date, June 18, 2020, of negative 0.25%.

Settlement is slated for Sept. 5. Following settlement, €230,884,000 of the securities will remain outstanding.

The company will also pay accrued interest.

As previously reported, tender instructions had to be submitted for a minimum of €100,000 and in integral multiples of €1,000 onwards.

The company plans to cancel any capital securities purchased in the offer.

NGG Finance plans to issue new capital securities guaranteed by National Grid. Whether NGG Finance purchases any existing capital securities in the tender offer is subject to the successful completion of the new issue.

The amount of existing capital securities accepted for purchase in the tender offer was to be no greater than an amount to be determined by reference to the principal amount of new capital securities issued. Pricing of the new capital securities was expected to be on Aug. 29.

When considering allocation of the new capital securities, NGG Finance may give preference to holders who have tendered their existing capital securities or have given a firm intention to do so. The minimum denomination of the new capital securities is €100,000.

Because over 80% of the existing capital securities will be repurchased and canceled, NGG Finance has the option to redeem all, but not some only, of the remaining capital securities at par plus accrued interest. The company plans to exercise this option after settlement.

The company said the rationale of the offer and the new issue is to proactively manage its hybrid capital.

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), Goldman Sachs International (+44 20 7552 6157 or liabilitymanagement.eu@gs.com) and J.P. Morgan Securities plc (+44 20 7134 2468 or emea_lm@jpmorgan.com).

The tender agent is Lucid Issuer Services Ltd. (+44 20 7704 0880 or ngrid@lucid-is.com).

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

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