Yorkshire Water receives partial approvals to replace Cayman issuers

New York, June 20 – Yorkshire Water Services Ltd. said that it received the requested approval to substitute the issuers incorporated in the Cayman Islands, or Caycos, with a new wholly owned direct subsidiary incorporated in the United Kingdom for some of its bond issues but not for all.

The instruction fee will be paid to holders of bonds for which approval was received, according to a series of announcements.

Noteholder meetings were held in London on June 20 following the deadline to submit instruction of 11 a.m. ET on June 15.

When it announced the solicitation on May 29, the company said that “maintaining a financing structure, which includes the Caycos (and also potentially Yorkshire Water Services Finance Ltd.) could be prejudicial to its relations with, and future price determinations by, Ofwat.

“In addition, it could impact its ability to sustain the trust and confidence of its customers as it seeks to improve the transparency of its business. Consequently, the interests of the secured creditors may be adversely affected.”

Approval was received for the following notes issued by Yorkshire Water Services Bradford Finance Ltd. and guaranteed by Yorkshire Water Services Ltd., Yorkshire Water Services Holdings Ltd., Yorkshire Water Services Finance Ltd., Yorkshire Water Services Odsal Finance Holdings Ltd. and Yorkshire Water Services Odsal Finance Ltd.:

• £275 million 6% guaranteed fixed-rate bonds due 2019;

• £300 million 6 3/8% guaranteed fixed-rate bonds due 2039, of which £200 million was issued on July 24, 2009 and £100 million was issued on April 23, 2010;

• £260 million 2.718% guaranteed retail price index-linked bonds due 2039, of which £175 million was issued on July 24, 2009 and £85 million was issued on April 23, 2010;

• A$50 million 5 7/8% class A unwrapped guaranteed bonds due 2023;

• £250 million 3 5/8% class A1 guaranteed unwrapped fixed-rate bonds due 2029; and

• £50 million 1.803% guaranteed retail price index-linked bonds due 2042;

With 98.27% of the notes represented at the meeting, a quorum was achieved. Of the votes cast, 99.73% were in favor.

Approval was also received for the following notes issued by Yorkshire Water Services Bradford Finance Ltd. and guaranteed by Yorkshire Water Services Ltd., Yorkshire Water Services Holdings Ltd., Yorkshire Water Services Finance Ltd., Yorkshire Water Services Odsal Finance Holdings Ltd. and Yorkshire Water Services Odsal Finance Ltd.:

• £200 million 3Ύ% fixed-to-floating rate unwrapped guaranteed bonds due 2046; and

• £90 million 4.965% class B unwrapped guaranteed bonds due 2033.

For these notes, 98.31% were represented at the meeting, constituting a quorum, and all the votes were in favor.

Yorkshire Water also received consents for the following notes issued by Yorkshire Water Services Odsal Finance Ltd. and guaranteed by Yorkshire Water Services Ltd., Yorkshire Water Services Holdings Ltd., Yorkshire Water Services Finance Ltd., Yorkshire Water Services Odsal Finance Holdings Ltd. and Yorkshire Water Services Bradford Finance Ltd.:

• £210,692,000 6.5876% bonds due 2023;

• £135,476,000 6.454% bonds due 2027;

• £254,974,000 6.6011% bonds due 2031; and

• £127,811,000 3.30666% guaranteed retail price index-linked bonds due 2033.

Again, a quorum was reached as 97.19% of the notes were represented at the meeting. All votes were in favor.

The changes were not approved for the following series of bonds issued by Yorkshire Water Services Finance Ltd. and guaranteed by Yorkshire Water Services Ltd., Yorkshire Water Services Holdings Ltd., Yorkshire Water Services Odsal Finance Ltd., Yorkshire Water Services Bradford Finance Ltd. and Yorkshire Water Services Odsal Finance Holdings Ltd.:

• £200 million 5½% guaranteed bonds due 2037;

• £65 million 1.8225% guaranteed retail price index-linked bonds due 2050;

• £125 million 1.462% guaranteed retail price index-linked bonds due 2051;

• £85 million 1.75756% guaranteed retail price index-linked bonds due 2054;

• £125 million 1.46% guaranteed retail price index-linked bonds due 2056; and

• £100 million 1.7085% guaranteed retail price index-linked bonds due 2058.

For these notes, 66.87% were represented at the meeting, passing the threshold for a quorum. Of the votes, 50.53% were in favor, failing to reach the necessary level to make the changes.

In its original announcement, Yorkshire Water said the proposed amendments had been approved by a special committee that holds about 45% of the principal amount of the class A bonds and about 43% of the class B bonds originally issued.

The threshold needed is more than 50% of voted qualifying class A debt.

The instruction fee is 2.5 basis points.

The solicitation agents are Lloyds Bank Corporate Markets plc (+44 20 7158 1726/1719 or liability.management@lloydsbanking.com) and NatWest Markets plc (+44 20 7678 5282 or liabilitymanagement@natwestmarkets.com). The tabulation agent is Lucid Issuer Services Ltd. (+44 20 7704 0880 or yorkshirewater@lucid-is.com).

Yorkshire is a Bradford, England-based water supply and treatment utility company.

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