23 July 2015
NOT FOR DISTRIBUTION IN OR INTO THE U.S. (OR TO U.S. PERSONS), CANADA, AUSTRALIA, OR JAPAN, OR IN ANY OTHER JURISDICTION IN WHICH SUCH DISTRIBUTION WOULD BE PROHIBITED BY APPLICABLE LAW
J Sainsbury plc raises £250 million of 2.875% perpetual subordinated convertible bonds and sets the terms of a £250 million 6.50% perpetual subordinated non-convertible hybrid bond offering
J Sainsbury plc (the "Company") today announces the final terms of its offering of £250 million perpetual subordinated convertible bonds (the "Convertible Bonds") and £250 million perpetual subordinated non-convertible hybrid bonds (the "Hybrid Bonds" and together with the Convertible Bonds, the "Bonds").
The aggregate proceeds of the combined offering will be used for the general corporate purposes of the group, including via on-lending to subsidiaries and by way of contributions to the group's pension funds.
From the Closing Date to (but excluding) 30 July 2020 (the "Hybrid First Reset Date"), the Hybrid Bonds will have a coupon of 6.50% per annum. From the Closing Date to (but excluding) 30 July 2021 (the "Convertible First Reset Date" and together with the Hybrid First Reset Date, each a "First Reset Date"), the Convertible Bonds will have a coupon of 2.875% per annum. Following each respective First Reset Date, interest will increase to an interest rate of the then 5 year Swap Rate plus the initial Hybrid Bond's credit spread plus a 500bps step-up margin, subject to a reset every five years thereafter.
The Company may, subject to certain conditions, elect to defer all or part of any scheduled interest payment. Any such non-payment of interest will not constitute an event of default or breach of obligations and shall itself bear interest for so long as the interest due shall remain unpaid.
The Bonds will be issued at 100% of their principal amount and have no fixed redemption date. The Bonds may be optionally redeemed by the Company at 100% of their principal amount on each respective First Reset Date and each fifth anniversary of each respective First Reset Date, together with any accrued and unpaid interest and any outstanding Arrears of Interest.
The Convertible Bonds will be optionally convertible into fully paid new and/or existing ordinary shares ("Ordinary Shares") of the Company until the seventh day prior to the Convertible First Reset Date. The initial conversion price has been set at 348.6417 pence, a 30% premium to the reference share price.
Settlement and delivery of the Bonds are expected to take place on 30 July 2015 (the "Closing Date").
It is intended that application will be made for the Bonds to be listed on the official list of the Channel Islands Securities Exchange Authority Limited prior to each respective first interest payment date.
Deutsche Bank AG, London Branch, Morgan Stanley & Co. International plc and UBS Limited are acting as Joint Bookrunners on both transactions. Banco Santander, S.A., Lloyds Bank plc and Mitsubishi UFJ Securities International plc are acting as Co-Bookrunners on the Convertible Bonds offering and Barclays Bank PLC, BNP Paribas and Mitsubishi UFJ Securities International plc are acting as Passive Bookrunners on the Hybrid Bonds offering (together with the Joint Bookrunners, the "Bookrunners").
For further information, please contact:
Media Enquiries:
Rebecca Reilly
+44 (0)20 7695 7295
Investor Relations:
Duncan Cooper
+44 (0)20 7695 0080
IMPORTANT NOTICE
The information contained in this announcement is for background purposes only and does not purport to be full or complete.
This announcement is not for publication or distribution, directly or indirectly, in or into the United States or to U.S. persons (each as defined in Regulation S under the U.S. Securities Act of 1933, as amended (the "Securities Act")). The Bonds and the Ordinary Shares to be issued upon conversion of the Convertible Bonds have not been and will not be registered under the Securities Act and the Bonds are subject to U.S. tax law requirements. The distribution of this announcement may be restricted by law in certain jurisdictions and persons into whose possession any document or other information referred to herein comes should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.
This announcement does not constitute or form part of an offer to sell securities or the solicitation of any offer to subscribe for or otherwise buy any securities to any person in the United States, Australia, Canada, Japan or in any other jurisdiction to whom or in which offers or sales is unlawful. The Bonds and Ordinary Shares referred to in this announcement have not been and will not be registered in the United States under the Securities Act and may not be offered or sold in the United States unless registered under the Securities Act or offered in a transaction exempt from, or not subject to, the registration requirements of the Securities Act. Subject to certain exceptions, the Bonds and Ordinary Shares referred to herein may not be offered or sold in Australia, Canada or Japan or to, or for the account or benefit of, any national, resident or citizen of Australia, Canada or Japan. There will be no public offer of the securities in the United States, Australia, Canada or Japan.
The offering of the Bonds is addressed to, and directed in member states of the European Economic Area which have implemented the Prospectus Directive (the "Prospectus Directive") at, persons who are "qualified investors" within the meaning of Article 2(1)(e) of the Prospectus Directive (directive 2003/71/EC, as amended) ("qualified investors"). In addition, in the United Kingdom, the offering of the Bonds is directed only at qualified investors (i) who have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Order") and qualified investors falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as "relevant persons"), and (ii) to whom it may otherwise lawfully be communicated under the Order. This announcement must not be acted on or relied on by persons who are not relevant persons in the United Kingdom or qualified investors as the case may be. Any investment or investment activity to which this announcement relates is available only to relevant persons and qualified investors and will be engaged in only with relevant persons or qualified investors as the case may be.
Acquiring investments to which this announcement relates may expose an investor to a significant risk of losing all of the amount invested. Persons considering making such investments should consult an authorised person specialising in advising on such investments. This announcement does not constitute a recommendation concerning the Bonds. The value of the Bonds can decrease as well as increase. Potential investors should consult a professional adviser as to the suitability of the Bonds for the person concerned.
Each of the Bookrunners, each of which is authorised and supervised by the Prudential Regulation Authority and is subject to regulation by the Financial Conduct Authority, is acting exclusively for the Company and no one else in connection with the offering of the Bonds and will not be responsible to any other person for providing the protections afforded to clients of such Bookrunner, respectively, or for providing advice in relation to the offering of the Bonds or any other transaction, matter or arrangement referred to in this announcement.
Each of the Company, the Bookrunners and their respective affiliates expressly disclaims any obligation or undertaking to update, review or revise any statement contained in this announcement whether as a result of new information, future developments or otherwise.
In connection with the offering of the Bonds, the Bookrunners and any of their respective affiliates, acting as investors for their own accounts, may subscribe for or purchase Bonds and in that capacity may retain, purchase, sell, offer to sell or otherwise deal for their own accounts in such Bonds and any other securities of the Company or related investments in connection with the Bonds, the Company or otherwise. Accordingly, references to the Bonds being issued, offered, subscribed, acquired, placed or otherwise dealt in should be read as including any issue or offer to, or subscription, acquisition, placing or dealing by, the Bookrunners and any of their respective affiliates acting as investors for their own accounts. None of the Bookrunners intends to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligations to do so.
None of the Bookrunners or any of their respective directors, officers, employees, affiliates, advisers or agents accepts any responsibility, duty or liability whatsoever for or makes any representation or warranty, express or implied, as to the truth, accuracy or completeness of the information in this announcement (or whether any information has been omitted from the announcement) or any other information relating to the Company, its other subsidiaries or associated companies, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available or for any loss howsoever arising from any use of this announcement or its contents or otherwise arising in connection therewith.
