REG - Dragon Finance B.V. - Statement re LIBOR Transition
29/12/2021 08:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20211229:nRSc8080Wa&default-theme=true
RNS Number : 8080W Dragon Finance B.V. 24 December 2021
THIS NOTICE IS IMPORTANT AND REQUIRES THE IMMEDIATE ATTENTION OF
INSTRUMENTHOLDERS. PLEASE LET THIS NOTICE SERVE AS OFFICIAL AUTHORISATION
(LETTER OF AUTHORITY) TO RELEASE SECURITY HOLDINGS IDENTITY INFORMATION UNDER
EU DIRECTIVE 2007/36/EC AND THE RELATED COMMISSION IMPLEMENTING REGULATION
(EU) 2018/1212 OF 03 SEPTEMBER 2018. IF INSTRUMENTHOLDERS ARE IN ANY DOUBT
AS TO THE ACTION THEY SHOULD TAKE, THEY SHOULD SEEK THEIR OWN FINANCIAL,
ACCOUNTING AND LEGAL ADVICE, INCLUDING AS TO ANY TAX CONSEQUENCES, IMMEDIATELY
FROM THEIR STOCKBROKER, SOLICITOR, ACCOUNTANT OR OTHER INDEPENDENT FINANCIAL
OR LEGAL ADVISER.
NOTICE TO THE HOLDERS OF THE OUTSTANDING
£102,450,000 Class A Secured Floating Rate Notes due 2023
(ISIN: XS0116563668 and Common Code: 011656366)
£30,000,000 Class B Secured Floating Rate Notes due 2023
(ISIN: XS0116564393 and Common Code: 011656439)
£100,000,000 Class C Secured Floating Rate Notes due 2023
(ISIN: XS0116564559 and Common Code: 011656455)
issued by
Dragon Finance B.V.
(the "Issuer" or the "Transaction" as the context requires)
on 21 August 2000
Capitalised terms used but not otherwise defined in this notice shall have the
meanings set out in the prospectus issued by the Issuer on 17 August 2000 in
respect to the Transaction.
Background
Since July 2017, there has been a concerted and intensive global
regulator-driven effort to encourage, and ultimately effect, the transition
away from the use of interbank offered rates, including the GBP London
Interbank Offered Rate ("LIBOR"), in financial instruments to risk-free rates
or other appropriate benchmarks.
In January 2020, the Bank of England, the UK Financial Conduct Authority (the
"FCA") and the Working Group on Sterling Risk-Free Reference Rates published a
joint statement outlining priorities and milestones for 2020 on LIBOR
transition.
On 5 March 2021, the FCA formally announced that the future cessation and loss
of representativeness of LIBOR will take place on 31 December 2021. The FCA
will no longer compel panel banks to submit to LIBOR beyond 31 December 2021
and the FCA will no longer use its powers to require the benchmark
administrator of LIBOR to continue to use its powers to publish LIBOR on the
basis of panel bank submissions. In addition, the Bank of England and the
FCA have mandated the RFR Working Group to promote a broad-based transition to
the Sterling Overnight Index Average ("SONIA") across sterling bond, loan and
derivative markets, so that SONIA is established as the primary sterling
interest rate benchmark by the end of 2021. Therefore, the continuation of
LIBOR on the current basis will cease after 2021, and regulators have urged
market participants to take active steps to implement the transition to SONIA
and other risk-free rates ahead of this deadline.
By way of overview, the Transaction includes the following LIBOR-linked
elements:
1. the Class A Notes, the Class B Notes and the Class C
Notes (the "Notes") with a floating rate of interest linked to LIBOR; and
2. a Swap Document with a floating rate of interest linked
to LIBOR,
which in each case are subject to the terms of the Transaction Documents and
the Conditions.
Proposed LIBOR Transition
NOTICE IS HEREBY GIVEN that the Issuer will shortly undertake a consent
solicitation exercise to obtain the approval of Noteholders to certain
amendments to the Transaction Documents in order to replace references to
LIBOR within the relevant Transaction Documents to a compounded daily SONIA
rate (the "LIBOR Transition"). Due to the differences in the nature of LIBOR
and compounded daily SONIA, the replacement of LIBOR as the reference rate for
the Notes will also require implementation of adjusted margins (the "Adjusted
Margin").
The Issuer proposes calculating the Adjusted Margin by reference to the ISDA
fallback spread adjustment determined by the International Swaps and
Derivatives Association on 5 March 2021 following the announcement by the FCA
regarding the end dates for all LIBOR panels. This would result in the
applicable margin for the Notes increasing in each case by 0.4644 per cent.
(being the "Credit Adjustment Spread").
The Issuer is, together with its legal counsel, preparing the draft amendment
documentation which will be shared with Noteholders in connection with the
LIBOR Transition.
Restrictions on Amendments
Any proposed amendment to the rate of interest on the Notes from LIBOR to
SONIA (including the proposed Credit Adjustment Spread and any consequential
amendments to the Transaction Documents to give effect thereto) will require
the approval of Noteholders by way of Extraordinary Resolutions passed by
Noteholders in accordance with the Conditions and the Trust Deed. Such
amendments will also require the approval of certain parties to those
Transaction Documents.
In accordance with normal practice, the Trustee assumes no responsibility for
this notice. The Trustee has not verified, and expresses no opinion as to the
contents of this notice, and makes no representation that all relevant
information has been disclosed, or has been disclosed accurately, to
Noteholders. Accordingly, the Trustee urges Noteholders who are in any doubt
as to the impact of this notice to seek their own independent legal and/or
financial advice. The Swap Counterparty also assumes no responsibility for
this notice or the consequences of any amendments to the rate of interest on
the Notes or the swap transaction from LIBOR to SONIA.
If you have any questions or require any clarification about this notice,
please contact the Issuer at Bobakker.Elhilmi@tmf-group.com or
Jakob.Boonman@tmf-group.com.
The Issuer strongly encourages all Noteholders to engage and, in due course,
vote on the LIBOR Transition. If the LIBOR Transition is unsuccessful the
Agent Bank will be required, in accordance with Condition 6(b), to seek
quotations from major banks in the London interbank market in order to
determine the Rate of Interest for the Interest Period commencing in July
2022. The Issuer cannot provide any assurance that major banks in the London
interbank market will provide the necessary quotations.
If the Agent Bank is not able to obtain these quotations, the Rate of
Interest shall be the sum of the relevant margin and the rate (or as the case
may be) arithmetic mean last determined in relation to the relevant Notes in
respect of the preceding Interest Period. It is possible therefore, that the
Rate of Interest in effect for a previous Interest Period is used, such that
the existing Rate of Interest shall apply until the Scheduled Redemption Date.
This notice is given by the Issuer.
Dated: 24 December 2021
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END STRPPGUUPUPGGAC