On 28 November 2017, Liberty Living Finance plc (“Liberty Living Finance”) issued £300,000,000 2.625% guaranteed bonds due 28 November 2024 and £300,000,000 3.375% guaranteed bonds due 28 November 2029. The terms and conditions of the bond trust deeds are identical, other than the interest rate and date of maturity.
The bonds have been admitted to the Official List of the Irish Stock Exchange (now trading as Euronext Dublin) and to trading on the Global Exchange Market which is the exchange regulated market of the Irish Stock Exchange. The bonds were constituted by separate trust deeds entered into between Liberty Living Finance, certain members of the Liberty Living group as guarantors and Deutsche Trustee Company Limited as trustee on 28 November 2017. The bonds are required to be guaranteed by the same entities as the Liberty Living Principal Bank Facility (described in paragraph 18.2.2 below). The bonds are not secured.
The bonds bear interest in each case payable annually in arrears on 28 November. The bonds are in bearer form in denominations of £100,000 and integral multiples of £1,000 in excess thereof up to and including £199,000. The bond trust deeds contain financial covenants regarding gearing, secured gearing and interest cover. In summary:
- Gearing must not exceed 0.65:1 at any time;
- Secured gearing must not exceed 0.25:1 at any time; and
- Interest cover in respect of each 12 month period ending on a reporting date must not be less than 1.75:1.
The bond trust deeds also contain a capital markets style negative pledge restricting the creation of a security interest to secure other listed debt without providing the same or equivalent security over the bonds.
The bonds may be redeemed prior to their redemption dates for tax reasons in the event that Liberty Living Finance or a guarantor becomes obliged to gross-up principal or interest payments as a result of changes to UK tax law, subject to the satisfaction of certain conditions.
Liberty Living Finance may redeem the bonds at any time by giving a prescribed amount of notice to bondholders. If Liberty Living Finance exercises this right within three months of the relevant maturity date, the redemption amount to be paid will be par. If Liberty Living Finance exercises this right earlier, a make-whole redemption amount will be payable, set in accordance with the terms and conditions of the bonds.
The bonds contain a change of control put event. If there is a change of control of Liberty Living Holdings Inc. and an announcement is made by the relevant rating agency that the bonds are being downgraded as a result of such change of control, bondholders have the option to request that their bonds are bought back subject to satisfying certain conditions.
Liberty Living Finance and the guarantors or any of their respective subsidiaries may purchase the bonds in the open market at any time.
The bond trust deeds contain standard capital markets events of default for: (a) non-payment of interest or principal; (b) breach of other obligations in respect of the bonds or the relevant trust deed; (c) cross-default by Liberty Living Finance, a guarantor or any of their respective subsdiaries provided that such indebtedness not paid when due, individually or in aggregate, exceeds £10,000,000; (d) unsatisfied judgment in excess of £10,000,000 against Liberty Living Finance, any guarantor or a subsidiary of Liberty Living Group Plc; (e) security is enforced over the assets of Liberty Living Finance, any guarantor or any of their respective subsidiaries; (f) insolvency of Liberty Living Finance, any guarantor or any of their respective subsidiaries; (g) cessation of business by Liberty Living Finance, a guarantor or any of their respective subsidiaries; (h) the passing of an order for the winding up of Liberty Living Finance, any guarantor or any of their respective subsidiaries; (i) any analogous insolvency related event occurs; and (j) any guarantee (that has not been released in accordance with the provisions of the relevant trust deed) is not in full force and effect.
Events of default (a) to (d) provide a grace period for remedy before acceleration of the bonds is permitted.
The bonds and the trust deeds are governed by English law.