RAC Bond Co plc update on Group Capital Structure

20 JUL 2021

RAC BOND CO PLC

(a public limited company incorporated in England and Wales with registered no. 10084638)

 (the “Issuer”)

THIS ANNOUNCEMENT RELATES TO THE DISCLOSURE OF INFORMATION THAT QUALIFIED OR MAY HAVE QUALIFIED AS INSIDE INFORMATION WITHIN THE MEANING OF ARTICLE 7(1) OF THE MARKET ABUSE REGULATION (EU) 596/2014.

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION TO ANY U.S. PERSON (AS DEFINED BELOW) OR IN OR INTO THE UNITED STATES, ITS TERRITORIES AND POSSESSIONS (INCLUDING PUERTO RICO, THE U.S. VIRGIN ISLANDS, GUAM, AMERICAN SAMOA, WAKE ISLAND AND THE NORTHERN MARIANA ISLANDS, ANY STATE OF THE UNITED STATES AND THE DISTRICT OF COLUMBIA) (together, the United States) OR TO ANY PERSON LOCATED OR RESIDENT IN THE UNITED STATES OR ANY OTHER JURISDICTION WHERE IT IS UNLAWFUL TO DISTRIBUTE THIS ANNOUNCEMENT.

NOTICE

to the holders of

£300,000,000 Fixed Rate Class A Senior Secured Notes due 2046

(ISIN XS1404980846)

and

£600,000,000 Fixed Rate Class A Senior Secured Notes due 2046

(ISIN XS1404981141)

and

£275,000,000 Fixed Rate Class B Senior Secured Notes due 2046

(ISIN XS1645523579)

(the “Class B1 Notes”)

 20 July 2021

Update on RAC Group’s debt capital structure

The Issuer announces that its affiliate RAC Limited has entered into a new £265m senior term facilities agreement (the “2021 STF”) in order to:

Collectively, these transactions are hereinafter referred to as the “Refinancing”.

The RAC Group has seen continued positive performance in the first half of 2021, in line with management expectations and outlook provided at the FY 2020 results announcement.

Jo Baker, CFO, commented, “I am pleased that we have once again received such strong support from lenders, enabling us to extend the maturity profile of our debt on attractive terms and to redeem the Class B1 Notes in full. The refinancing, together with our strong and sustainable cash flows, supports our overall capital structure, reduces leverage and reduces funding costs for the Group. Our positive momentum continues and we look to the future with confidence in our sustained growth trajectory.”

New 2021 STF

The 2021 STF contains two facilities, a £170m facility A (due June 2025) (“Facility A”) and a £95m facility B (due June 2028) (“Facility B”).

Facility A carries an opening interest rate of SONIA + 1.80 per cent. and Facility B carries an opening interest rate of SONIA + 2.50 per cent., in each case subject to a margin grid relating to the credit rating of the RAC Group’s Class A Notes from time to time. The interest rate risk in relation to the 2021 STF has been appropriately hedged through an interest rate swap in accordance with the hedging policy to which the RAC Group is subject.

Conditional Redemption in full of the Class B1 Notes

RAC Limited intends to use proceeds of the 2021 STF to fully prepay all amounts outstanding under the Class B1 Issuer-Borrower Loan Agreement in respect of the Class B1 Notes. Assuming such prepayment is effected, the Issuer will redeem the outstanding Class B1 Notes in full (the “Class B1 Redemption”).

The Class B1 Redemption is conditional on the Issuer receiving sufficient funds from RAC Limited and is expected to occur on or shortly after 30 July 2021.

Partial Prepayment of 2020 STF

RAC Limited intends to make a partial prepayment of the 2020 STF in an amount equal to approximately £139.5m, using cash available to the RAC Group along with the balance of the 2021 STF not applied toward the Class B1 Redemption to fund such prepayment (the “2020 STF Partial Prepayment”).

Capital structure pre and post Refinancing

1. Pre Refinancing shows the current principal outstanding under the RAC Group’s facilities and notes, excluding (for the avoidance of doubt) undrawn facilities (£50m Working Capital Facility Agreement and Liquidity Facilities Agreement).

2. Post Refinancing shows the principal outstanding under the RAC Group’s facilities and notes following and conditional upon the occurrence of the Refinancing (the utilisation of the 2021 STF, the Class B1 Redemption and the 2020 STF Partial Prepayment) on the same basis as footnote 1.

Rating Agency

The Issuer informed Standard & Poor’s Global Ratings (“S&P”) about this entry into the 2021 STF and S&P has confirmed to the Issuer that entry into and utilisation of the 2021 STF will not, in and of itself, result in a downgrade, withdrawal or qualification of the ratings assigned to the (i) £300,000,000 Fixed Rate Class A1 Senior Secured Notes due 2046; (ii) £600,000,000 Fixed Rate Class A2 Senior Secured Notes due 2046.

“RAC Group” means RAC Bidco Limited and each of its subsidiaries (other than the Issuer).

This announcement has been issued through the Companies Announcement Service of the Irish Stock Exchange

For Investor enquiries, please contact:
 

Bruce Claassen, Group Finance Director                [email protected]

For Media enquiries, please contact:
 

Rod Dennis, Press Officer           [email protected]

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