National Grid prices, wraps tenders for £295 million of seven series

By Susanna Moon

Chicago, Feb. 20 – National Grid Electricity Transmission plc and National Grid Gas plc said they have decided to accept tenders for £295 million of seven series of notes.

The companies originally planned to purchase up to £250 million of notes in the modified Dutch auction tender offers.

National Grid Electricity was tendering for three series of its notes and accepted for purchase the following amounts:

• £82,211,000 of the £406,131,000 outstanding £450 million of 5.875% bonds due February 2024 with a scaling factor of 57.1196% for non-competitive tender instructions;

• £34,649,000 of the £297,819,000 outstanding £360 million of 6.5% notes due 2028 with no pro rata scaling for non-competitive tender instructions; and

• £50,833,000 of the £361.61 million outstanding £379 million of 7.375% notes due January 2031 with no pro rata scaling for non-competitive tender instructions.

National Grid Gas was tendering for four series of its notes and accepted for purchase the following amounts:

• £62.2 million of the £340.2 million outstanding £484 million 6.375% notes due March 3, 2020 with pro rata scaling at a scaling factor of 40% for non-competitive tender instructions;

• £65,107,000 of the £282,502,000 outstanding £503,078,000 7% guaranteed fixed-rate bonds due December 2024 with no pro rata scaling for non-competitive tender instructions;

• None of the £111,106,000 outstanding £275 million 8.75% bonds due 2025; and

• None of the £457 million of outstanding £457 million 6% instruments due 2038.

The tender offers ended at 11 a.m. ET on Feb. 19.

After settlement on Feb. 24, there will remain outstanding £278 million of the 2020 notes, £323.92 million of the February 2024 notes, £217,395,000 of the December 2024 notes, £111,106,000 of the 2025 notes, £263.17 million of the 2028 notes, £310,777,000 of the 2031 notes and £457 million of the 2038 notes.

Pricing terms, other details

Pricing was set at 7 a.m. ET on Feb. 20 using a reference security plus a fixed spread as follows:

• 129.174 for the 5.875% bonds due February 2024 using the 2.75% U.K. Treasury gilt due 2024 plus 40 bps with a benchmark security rate of 1.825% and purchase yield of 2.237%;

• 140.35 for the 6.5% notes due 2028 using 6% U.K. Treasury gilt due 2028 plus 80 bps with a benchmark security rate of 2.020% and purchase yield of 2.840%;

• 155.496 for the 7.375% notes due January 2031 using 4.75% U.K. Treasury gilt due 2030 plus 75 bps with a benchmark security rate of 2.177% and purchase yield of 2.948%;

• 123.028 for the 6.375% notes due 2020 using 4.75% U.K. Treasury gilt due 2020 plus 30 bps with a benchmark security rate of 1.262% and purchase yield of 1.568%; and

• 138.816 for the 7% bonds due December 2024 using 2.75% U.K. Treasury gilt due 2024 plus 65 bps with a benchmark security rate of 1.825% and purchase yield of 2.490%.

Tender instructions could have been submitted on a non-competitive or a competitive basis.

HSBC Bank plc (44 20 7992 6237, attn: liability management group, email: liability.management@hsbcib.com) and Royal Bank of Scotland plc (44 20 7085 5991, attn: liability management group, email: liabilitymanagement@rbs.com) were the dealer managers. Lucid Issuer Services Ltd. (44 20 7704 0880, fax: 44 20 7067 9098, attn: David Shilson, email: ngrid@lucid-is.com) was the tender agent.

The issuer is a London-based utility company.

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