Gatwick obtains waiver on financial covenants covering 10 bond series

By Rebecca Melvin

Concord, N.H., Sept. 8 – Gatwick Funding Ltd. has obtained a temporary waiver of financial covenants and amended some terms of the covenants covering 10 senior bond series, according to documents published by the London Stock Exchange.

Citing exceptional circumstances affecting air travel due to the Covid-19 pandemic, the majority of Gatwick’s lenders accepted the company’s requests, according to a release by Vinci Airports, which holds 50.01% of the airport.

Under the approved Aug. 13 consent bid and STID proposal, the airport will not be required to comply with the senior interest cover ratio and senior debt ratio at the next two testing points at the end of December 2021 and end of June 2022.

In addition, the method for calculating the debt ratio will be amended until June 2024 to adjust for the impact of the pandemic crisis on the airport’s EBITDA.

The bonds affected by the waivers and amendments include the following:

• £300 million 6 1/8% notes due March 2, 2028, with a scheduled redemption date of March 2, 2026 (ISIN: XS0596919299);

• £300 million 6½% notes due March 2, 2043, with a scheduled redemption date March 2, 2041 (ISIN: XS0596919539);

• £300 million 5¼% notes due Jan. 23, 2026, with a scheduled redemption date Jan. 23, 2024 (ISIN: XS0733794407);

• £300 million 2½% notes due April 15, 2032, with a scheduled redemption date April 15, 2030 (ISIN: XS2332199830);

• £300 million 5¾% notes due Jan. 23, 2039, with a scheduled redemption date Jan. 23, 2037 (ISIN: XS0733786130);

• £350 million 4 5/8% notes due March 27, 2036, with a scheduled redemption date (ISIN: XS1047788523);

• £300 million 2 5/8% notes due Oct. 7, 2048, with a scheduled redemption date Oct. 7, 2046 (ISIN: XS1502174581);

• £350 million 3 1/8% notes due Sept. 28, 2041, with a scheduled redemption date Sept. 28, 2039 (ISIN: XS1691441924);

• £300 million 3¼% notes due Feb. 26, 2050, with a scheduled redemption date Feb. 26, 2048 (ISIN: XS1781266793); and

• £300 million 2 7/8% notes due July 5, 2051, with a scheduled redemption date July 5 2049 (ISIN: XS2022203801).

Creditors holding 99.05% of the outstanding principal amount cast votes, and 92.52% of the voted outstanding principal amount voted in favor of the proposal.

The issuer will pay to holders who delivered valid electronic voting instruction prior to expiration of the consent bid and STID proposal a 5-basis points fee. The payment will be made on Sept. 15.

In response to the approval, Lorenzo Rebel, deputy chief financial officer of Gatwick Airport Ltd., said, “Gatwick’s financial response to Covid-19 has been strongly endorsed by its banks and bondholders, with over 92.5% of creditors in favor of Gatwick’s proposal to deal proactively with the forecasted effect on its financial ratios.

“This included agreement from Gatwick’s largest bondholders through a special committee of the investment association as well as full support across Gatwick’s bank group.

“This support, together with Gatwick’s prudent financial policy, decisive management actions in response to Covid and long-term shareholder support, has positioned Gatwick with the liquidity and financial flexibility to implement its recovery plans.”

The solicitation agents were Barclays Bank plc (+44 203 134 8515, eu.lm@barclays.com) and NatWest Markets plc (+44 207 678 5222, liabilitymanagement@natwestmarkets.com.

Lucid Issuer Services Ltd. (+44 207 704 0880, gatwick@lucid-is.com) was the tabulation agent.

The airport is based in the United Kingdom.

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