On 15 October 2018, Unite Group plc (the “Company”) issued £275,000,000 3.500% guaranteed bonds due 2028. The guaranteed bonds are serially numbered and in bearer form in the denominations of £100,000 and integral multiples of £1,000 in excess thereof up to and including £199,000, with coupons attached at the time of issue.

The guaranteed bonds are subject to, and have the benefit of, a trust deed dated 15 October 2018 between the Company, certain subsidiaries of the Company as guarantors and HSBC Corporate Trustee Company (UK) Limited as trustee.

The guaranteed bonds are the subject of an agency agreement dated 15 October 2018. The documentation setting out the terms of the guaranteed bonds (including the trust deed and the agency agreement) contain certain representations, undertakings and events of default. Events of default with appropriate carve-outs and materiality thresholds, where relevant, are set out in the conditions applicable to the guaranteed bonds and cover standard events such as non-payment, breach of covenants, cross default, unsatisfied judgment against the Company or a guarantor, enforcement of security, insolvency and insolvency proceedings. Pursuant to the trust deed, the Company covenants that it will ensure that none of its subsidiaries shall create any security interest upon the whole or any part of its present or future undertaking, assets or revenues.

The interest rate applicable to the bonds is 3.500% per annum payable annually in arrears on 15 October in each year commencing on 15 October 2019. Unless previously redeemed or purchased and cancelled, the bonds will be redeemed at their principal amount on 15 October 2028. The guaranteed bonds may be redeemed for tax reasons at the option of the Company, or at the option of bondholders upon a change of control of the Company.

The company has given certain covenants, including the following financial covenants:

  • Gearing does not at any time exceed 1.75:1;
  • Secured gearing does not at any time exceed 0.25:1; and
  • Interest cover, based on consolidated profit before tax to net interest expenses (each subject to certain adjustments) in respect of each 12 month period shall not be less than 1.75:1.

In certain circumstances, such as non-payment, insolvency or cross-default, HSBC Corporate Trustee Company (UK) Limited may give notice to the Company that the bonds are due, and they shall immediately become due and payable at their principal amount (together with any interest). The bond documentation contains 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 the Company, a guarantor or any material subsidiary of the Company 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 the Company, any guarantor or a subsidiary of the Company; (e) security is enforced over the assets of the Company, any guarantor or a subsidiary of the Company; (f) insolvency of the Company, any guarantor or a subsidiary of the Company; (g) cessation of business by the Company, a guarantor or a subsidiary of the Company; (h) the passing of an order for the winding up of the Company, any guarantor or a subsidiary of the Company; (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.

The bonds may be redeemed prior to their redemption dates for tax reasons in the event that the borrower or the guarantors become obliged to gross up interest payments as a result of changes to UK tax, subject to the satisfaction of certain conditions.

The bonds may be redeemed at the option of the bondholders upon a change of control of the company.

The company may redeem the bonds at any time by giving a prescribed amount of notice to bondholders.

The bonds are governed by English law.

 

Unite Group PLC Prospectus 2018