REG - London & Quadrant East Finance PLC - Consent Solicitation: £250m 5.486% Bonds due 2042
RNS Number : 9398ILondon & Quadrant Housing Trust29 November 2018THIS ANNOUNCEMENT RELATES TO THE DISCLOSURE OF INFORMATION THAT QUALIFIED OR MAY HAVE QUALIFIED AS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (EU) 596/2014.
FOR DISTRIBUTION ONLY OUTSIDE THE UNITED STATES TO PERSONS OTHER THAN "U.S. PERSONS" (AS DEFINED IN REGULATION S OF THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE SECURITIES ACT)). NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO, OR TO ANY PERSON LOCATED OR RESIDENT IN, ANY OTHER JURISDICTION WHERE IT IS UNLAWFUL TO RELEASE, PUBLISH, OR DISTRIBUTE THIS DOCUMENT (SEE "SOLICITATION AND DISTRIBUTION RESTRICTIONS" BELOW).
LONDON & QUADRANT HOUSING TRUST
(incorporated in England with limited liability under the Co-operative and Community Benefit Societies Act 2014 with registration number 30441R and registered with the Regulator of Social Housing under the Housing and Regeneration Act 2008, as amended by the Localism Act 2011, with number L4517)
announces consent solicitation in respect of the outstanding
£250,000,000 5.486 per cent. Secured Bonds due 2042
(the Bonds)of its subsidiary
EAST FINANCE PLC
(the Existing Issuer)29 November 2018. London & Quadrant Housing Trust (L&Q) announces today an invitation (such invitation the Consent Solicitation) to Eligible Bondholders (as defined below) to consent to (i) the substitution of L&Q in place of the Existing Issuer as issuer of the Bonds, (ii) certain changes to the terms and conditions of, and other documents relating to, the Bonds to align the Bonds with the terms of L&Q's most recent bond issue, and (iii) the release of the security underlying the Bonds and the re-granting of security by L&Q over properties with a value that is at least the requisite minimum to comply with the asset cover test under the Bonds (together, the Proposed Amendments).
This announcement does not contain the full terms and conditions of the Consent Solicitation, which are contained in the Consent Solicitation Memorandum dated 29 November 2018 (the Consent Solicitation Memorandum) prepared by L&Q, and this announcement should be read in conjunction with the Consent Solicitation Memorandum. Subject to the restrictions described under "Solicitation and Distribution Restrictions" below, Eligible Bondholders may obtain a copy of the Consent Solicitation Memorandum from the Tabulation Agent, the contact details for which are set out below. In order to receive a copy of the Consent Solicitation Memorandum, a holder of the Bonds will be required to provide confirmation as to his or her status as an Eligible Bondholder. Eligible Bondholders are advised to read carefully the Consent Solicitation Memorandum.
Capitalised terms used but not otherwise defined in this announcement have the meanings given in the Consent Solicitation Memorandum.
Details of the Bonds
ISIN / Common Code
Outstanding Principal Amount
Work Fee
£250,000,000 5.486 per cent. Secured Bonds due 2042
XS0788589074 / 078858907
£250,000,000
0.10 per cent. of the outstanding principal amount of the Bonds the subject of the relevant Consent Instruction
Background to, and rationale for, the Consent Solicitation
In December 2016, East Thames Limited, the parent of the Existing Issuer and the borrower (under the Loan Agreement) of the net proceeds from the issue of the Bonds, merged with L&Q. As part of the merger, the Existing Issuer became a wholly-owned subsidiary of L&Q and, in March 2018, East Thames Limited transferred its engagements to L&Q (in accordance with section 110 of the Co-operative and Community Benefit Societies Act 2014), including its obligations as borrower under the Loan Agreement. The Bonds continue to be obligations of the Existing Issuer.
In the Consent Solicitation, L&Q is seeking to make the Bonds direct obligations of L&Q with the objective of simplifying its corporate and funding structure and aligning the Bonds with the terms by which its most recent and existing listed debt obligations have been issued and are governed.
Proposed Amendments
The Existing Issuer is convening a meeting (the Meeting) of the holders of the Bonds (the Bondholders) for the approval by the Eligible Bondholders, by an extraordinary resolution (the Extraordinary Resolution), of the Proposed Amendments, as further set out in the notice convening the Meeting published by the Existing Issuer on the date of this announcement (the Notice).
The purpose of the Consent Solicitation and the Meeting is:
(i) to modify the terms and conditions of the Bonds (as set out in Part 2 of Schedule 2 to the Existing Bond Trust Deed, the Conditions), and the other documents relating to the Bonds, to provide for:
(a) the substitution of L&Q in place of the Existing Issuer as issuer of the Bonds; and
(b) certain changes to the Conditions and the other documents relating to the Bonds to align the Bonds with the terms of L&Q's most recent bond issue; and
(ii) to approve the release of the security underlying the Bonds in connection with the modifications referred to in (i) above and the re-granting of security by L&Q over properties with a value that is at least the requisite minimum to comply with the asset cover test under the Bonds.
Further information in relation to the Consent Solicitation, including in respect of the Proposed Amendments and the manner in which the Proposed Amendments will be implemented, is set out in the Consent Solicitation Memorandum.
Results of Consultation with a Special Committee of the Investment Association
The Consent Solicitation has been considered by a Special Committee (the Special Committee) of The Investment Association (the IA) at the request of L&Q. The members of the Special Committee, who hold in aggregate approximately 57.8 per cent. of the aggregate principal amount of the Bonds currently outstanding, have examined the Consent Solicitation, the Extraordinary Resolution and the Proposed Amendments. They have informed L&Q that (i) they find the Proposed Amendments acceptable; and (ii) subject to client and other approvals, they intend to vote in favour of the Extraordinary Resolution in respect of their holdings of the Bonds. The Special Committee has advised L&Q that this relates only to the proposals set out in the Consent Solicitation Memorandum with respect to the Bonds and not to any future offers or proposals which L&Q and/or the Existing Issuer may make.
Eligible Bondholders
The Consent Solicitation is only being made, and the Consent Solicitation Memorandum and any other documents or materials relating to the Consent Solicitation are only for distribution or to be made available, to each Bondholder who is (a) located and resident outside the United States and not a U.S. person (as defined in Regulation S under the Securities Act) and (b) otherwise a person to whom the Consent Solicitation can be lawfully made and that may lawfully participate in the Consent Solicitation (each an Eligible Bondholder).
Meeting
At the Meeting, Bondholders will be invited to consider and, if thought fit, pass the Extraordinary Resolution to approve the implementation of the Proposed Amendments, as more fully described in the Consent Solicitation Memorandum and the Notice.
The implementation of the Consent Solicitation and the Extraordinary Resolution will be conditional on:
(a) the passing of the Extraordinary Resolution;
(b) the Consent Solicitation not having been terminated in accordance with its terms; and
(c) the quorum required for, and the requisite majority of votes cast at, the Meeting being satisfied by Eligible Bondholders, irrespective of any participation at the Meeting by Bondholders who are not Eligible Bondholders (all such persons, Ineligible Bondholders), as further described in the Consent Solicitation Memorandum,
(together, the Consent Conditions).
Work Fee and Work Fee Deadline
Pursuant to the Consent Solicitation, each Eligible Bondholder from whom a valid Consent Instruction (whether in favour of or against the Extraordinary Resolution) is received by the Tabulation Agent by 5.00 p.m. (London time) on 13 December 2018 (such time and date, as the same may be extended, the Work Fee Deadline) will be eligible to receive payment of an amount equal to 0.10 per cent. of the principal amount of the Bonds that are the subject of such Consent Instruction (the Work Fee), subject to the passing of the Extraordinary Resolution, the satisfaction of the other Consent Conditions, and as otherwise set out in the Consent Solicitation Memorandum.
Only Eligible Bondholders may, subject to the conditions described in the Consent Solicitation Memorandum, be entitled to receive the Work Fee.
To be eligible to receive the Work Fee, an Eligible Bondholder who submits a Consent Instruction must not attend, or seek to attend, the Meeting in person or make any other arrangements to be represented at the Meeting (other than by way of its Consent Instruction). Bondholders may choose to attend and vote at the Meeting in person or to make other arrangements to be represented or to vote at the Meeting in accordance with the provisions for meetings of Bondholders set out in Schedule 3 to the Existing Bond Trust Deed and as described in the Notice without submitting a Consent Instruction. However, any such Bondholder will not be eligible to receive the Work Fee in respect of such Bonds, irrespective of whether such Bondholder has also delivered a Consent Instruction or such other arrangements are made by the Work Fee Deadline.
Where payable, the Work Fee will be paid to the Eligible Bondholder, or (if applicable) the Direct Participant acting on behalf of the relevant Eligible Bondholder, who was the holder of the relevant Bonds on the date on which the Extraordinary Resolution was passed. In the event that any such Eligible Bondholder sells or transfers its Bonds between the date on which the Extraordinary Resolution was passed and the payment of the Work Fee, the entitlement to the Work Fee will not be transferred with the relevant Bonds.
Ineligible Bondholders
An Ineligible Bondholder may be eligible, to the extent permitted by applicable laws and regulations, to receive an equivalent amount to the applicable Work Fee (which is an amount equal to 0.10 per cent. of the principal amount of the Bonds that are the subject of a valid Ineligible Bondholder Confirmation (as defined in the Notice) that is received by the Tabulation Agent by 5.00 p.m. (London time) on 13 December 2018 and is not subsequently revoked), subject in each case to the Extraordinary Resolution being passed at the Meeting (or any adjourned Meeting) and the other conditions to the Extraordinary Resolution being satisfied, all as more fully described in the Notice.
Timetable
The indicative timetable is summarised below:
Event
Indicative Timetable
Announcement of Consent Solicitation and publication of Notice convening the Meeting
29 November 2018
Work Fee Deadline
5.00 p.m. (London time) on 13 December 2018
Expiration Deadline
5.00 p.m. (London time) on 28 December 2018
Meeting
10.00 a.m. (London time) on 3 January 2019
Announcement of results of Meeting and satisfaction of Consent Conditions
As soon as reasonably practicable after the Meeting
Execution and delivery of the Amendment Documents, and implementation of the Extraordinary Resolution
As soon as reasonably practicable after the Meeting
Payment Date for Work Fee and Ineligible Bondholder Payment
No later than the fifth Business Day following the Meeting at which the Extraordinary Resolution is passed and the Eligibility Condition is satisfied
The above dates and times are subject to the right of L&Q to extend, waive any condition (other than the Consent Conditions) of, amend and/or terminate the Consent Solicitation (other than the terms of the Extraordinary Resolution) as described in the Consent Solicitation Memorandum and the passing of the Extraordinary Resolution (and satisfaction of the Eligibility Condition) at the initial Meeting. Accordingly, the actual timetable may differ significantly from the timetable above.
Bondholders are advised to check with any bank, custodian, securities broker or other intermediary through which they hold their Bonds when such intermediary would need to receive instructions from a Bondholder in order for such Bondholder to participate in, or (in the limited circumstances in which revocation is permitted) to validly revoke their instruction to participate in, the Consent Solicitation and/or the Meeting before the deadlines specified above. The deadlines set by any such intermediary and each Clearing System for the submission and (where permitted) revocation of Consent Instructions will be earlier than the relevant deadlines above.
Further details on the Consent Solicitation can be obtained from:
SOLICITATION AGENTS
Barclays Bank PLC
5 The North Colonnade
Canary Wharf
London E14 4BB
United Kingdom
Telephone: +44 20 3134 8515
Attention: Liability Management Group
Email: eu.lm@barclays.com
RBC Europe Limited
Riverbank House
2 Swan Lane
London EC4R 3BF
United Kingdom
Telephone: +44 20 7029 0165
Attention: Liability Management
Email: liability.management@rbccm.com
Requests for documentation and information in relation to the procedures for delivering Consent Instructions should be directed to:
TABULATION AGENT
Lucid Issuer Services Limited
Tankerton Works
12 Argyle Walk
London WC1H 8HA
United Kingdom
Telephone: +44 20 7704 0880
Attention: David Shilson
Email: lqgroup@lucid-is.com
None of the Bond Trustee, the Security Trustee, the Principal Paying Agent or any of their respective directors, officers, employees, agents, representatives or affiliates has been involved in the formulation of, expresses any opinion on the merits of, or makes any representation whatsoever regarding, the Extraordinary Resolution or the Consent Solicitation or makes any recommendation as to whether Bondholders should participate in the Consent Solicitation or otherwise participate at the Meeting. None of the Bond Trustee, the Security Trustee and the Principal Paying Agent has reviewed this announcement.
This announcement is released by London & Quadrant Housing Trust and contains information that qualified or may have qualified as inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 (MAR), encompassing information relating to the Consent Solicitation and the Proposed Amendments described above. For the purposes of MAR and Article 2 of Commission Implementing Regulation (EU) 2016/1055, this announcement is made by Martin Watts, Director of Treasury at London & Quadrant Housing Trust.
DISCLAIMER: This announcement must be read in conjunction with the Consent Solicitation Memorandum. This announcement and the Consent Solicitation Memorandum contain important information which should be read carefully before any decision is made with respect to the Consent Solicitation or the Meeting. If any Bondholder is in any doubt as to the action it should take or is unsure of the impact of the implementation of the Extraordinary Resolution, it is recommended to seek its own financial and legal advice, including in respect of any tax consequences, immediately from its broker, bank manager, solicitor, accountant or other independent financial, tax or legal adviser. Any individual or company whose Bonds are held on its behalf by a broker, dealer, bank, custodian, trust company or other nominee or intermediary must contact such entity if it wishes to participate in the Consent Solicitation or otherwise participate at the Meeting. None of L&Q, the Existing Issuer, the Solicitation Agents, the Tabulation Agent, the Bond Trustee, the Security Trustee or the Principal Paying Agent expresses any opinion about the terms of the Consent Solicitation or the Extraordinary Resolution or makes any recommendation as to whether Bondholders should participate in the Consent Solicitation or otherwise participate at the Meeting.
SOLICITATION AND DISTRIBUTION RESTRICTIONS
United States
The Consent Solicitation is only being made outside the United States, to persons other than "U.S. persons" (as defined in Regulation S under the Securities Act). Any purported participation in the Consent Solicitation resulting directly or indirectly from a violation of these restrictions will be invalid and any participation in the Consent Solicitation by a person that is located or resident in the United States or that is a U.S. person or by any agent, fiduciary or other intermediary acting on a non-discretionary basis for a beneficial owner that is giving instructions from within the United States or that is any U.S. person will not be accepted.
Neither this announcement nor the Consent Solicitation Memorandum is an offer of securities for sale in the United States or to any U.S. person. Securities may not be offered or sold in the United States absent registration or an exemption from registration. The Bonds have not been, and will not be, registered under the Securities Act, or the securities laws of any state or other jurisdiction of the United States, and may not be offered or sold in the United States or to, or for the account or benefit of, U.S. persons, unless an exemption from the registration requirements of the Securities Act is available.
Each Bondholder participating in the Consent Solicitation will represent that it is not a U.S. person (as defined in Regulation S under the Securities Act), and is not acting for the account or benefit of any U.S. person, and that it is not located or resident in the United States.
For the purpose of this announcement and the Consent Solicitation Memorandum, United States means the United States of America, 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 of America and the District of Columbia.
General
Nothing in this announcement or the Consent Solicitation Memorandum constitutes or contemplates an offer of, an offer to purchase or the solicitation of an offer to sell any security in any jurisdiction and participation in the Consent Solicitation by a Bondholder in any circumstances in which such participation is unlawful will not be accepted.
The distribution of this announcement and the Consent Solicitation Memorandum in certain jurisdictions may be restricted by law, and persons into whose possession this announcement or the Consent Solicitation Memorandum comes are requested to inform themselves about, and to observe, any such restrictions.
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 or visit www.rns.com.ENDMSCBXBDBBBDBGIC
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