Convertible Bond pricing
18 June 2019
NOT FOR DISTRIBUTION IN OR TO THE UNITED STATES, CANADA, AUSTRALIA, JAPAN OR SOUTH AFRICA, OR IN OR TO ANY OTHER JURISDICTION IN WHICH SUCH DISTRIBUTION WOULD BE PROHIBITED BY APPLICABLE LAW
Primary Health Properties PLC
Convertible Bond Offering
Primary Health Properties PLC (the "Company"), one of the UK's leading investors in modern primary healthcare facilities, today announces the pricing and final terms of its offering of £150 million of Convertible Bonds due 2025 (the "Bonds").
The Bonds will be issued by PHP Finance (Jersey No 2) Limited, a wholly-owned subsidiary of the Company incorporated in Jersey (the "Issuer"), and will be guaranteed by the Company.
The net proceeds of the Bonds are intended to be used to repay the Company's £75 million, 5.375% senior unsecured bonds due 2019 (ISIN: XS0795445823) on its maturity date and otherwise for general corporate purposes.
The Bonds will be unsecured obligations of the Issuer and will be subject to a negative pledge. The Bonds will be issued at par and will carry a coupon of 2.875% per annum payable semi-annually in arrear. Subject to certain conditions, the Bonds will be convertible into preference shares of the Issuer which will be automatically and mandatorily exchangeable into fully paid ordinary shares of the Company (the "Shares"). The initial exchange price has been set at 153.25 pence, a premium of 15% above the volume weighted average price of a Share on 18 June 2019 being 133.26 pence. Under the terms of the Bonds, the Company will have the right to elect to settle exercise of any conversion rights entirely in Shares or cash, or with a combination of Shares and cash. The exchange price will be subject to adjustment in certain circumstances.
Settlement of the Bonds is expected to take place on or about 15 July 2019 (the "Settlement Date"). If not previously converted, redeemed or purchased and cancelled, the Bonds will be redeemed at par on maturity in July 2025. The Issuer will have the option to redeem all outstanding Bonds on or after the date falling 3 years and 21 days after the Settlement Date at par plus accrued interest if the volume weighted average price of the Shares underlying each £1,000 principal amount of Bonds shall have exceeded £1,300 on each of at least 20 dealing days in any period of 30 consecutive dealing days or, at any time, if 15% or less of the principal amount of the Bonds remains outstanding.
Application is intended to be made for the Bonds to be admitted to listing on a recognised stock exchange within the meaning of section 1005 of the Income Tax Act 2007 or to trading on a "multilateral" trading facility operated by an EEA regulated stock exchange after the Settlement Date but prior to the first interest payment date in respect of the Bonds.
Stifel Nicolaus Europe Limited is acting as Global Coordinator and Joint Bookrunner. Barclays Bank PLC and HSBC Bank plc are acting as Joint Bookrunners. IDCM Limited and Peel Hunt LLP are acting as Co-Managers for the offering.
Harry Hyman, Managing Director of PHP, commented:
"We are delighted to be returning to the convertible bond market following the completion of our transformative merger with MedicX Fund Limited. The coupon of 2.875% reflects the confidence with which the enlarged group is viewed by the capital markets and will reduce the enlarged group's average cost of finance to 3.8% following repayment of the 5.375% senior unsecured bond at the end of July 2019. The proceeds will further strengthen our position for the continued acquisition of high quality, income generating assets as we expand our portfolio of modern primary care centres in the UK and Ireland."
For further information, please contact:
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Primary Health Properties PLC |
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Harry Hyman Managing Director Tel: +44 (0) 20 7451 7050 |
Richard Howell Finance Director Tel: +44 (0) 20 7104 5599 |
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Stifel Nicolaus Europe Limited |
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Christopher Thurn Managing Director Tel: +44 (0) 20 7663 3210 |
Michael Coakley Managing Director Tel: +44 (0) 20 7663 3202 |
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Barclays Bank PLC Ben West Director Tel: +44 (0) 20 7773 8300
HSBC Bank plc Tony Sand Director Tel: +44 (0) 20 7991 5271 |
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IDCM Limited |
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Stuart Bell Executive Director Tel: +44 (0) 20 3542 3921 |
Elise Huttenga Executive Director Tel: +44 (0) 20 3542 3926 |
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Peel Hunt LLP |
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Scott Beattie Director Tel: +44 (0) 20 7418 8945 |
Stuart Galvin Director Tel: +44 (0) 20 7418 8975 |
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Buchanan Communications David Rydell / Steph Watson Tel: +44 (0) 20 7466 5066 |
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IMPORTANT NOTICE
THE INFORMATION CONTAINED IN THIS PRESS RELEASE IS FOR BACKGROUND PURPOSES ONLY AND DOES NOT PURPORT TO BE FULL OR COMPLETE. NO RELIANCE MAY BE PLACED FOR ANY PURPOSE ON THE INFORMATION CONTAINED IN THIS PRESS RELEASE OR ITS ACCURACY OR COMPLETENESS. THE INFORMATION IN THIS PRESS RELEASE IS SUBJECT TO CHANGE.
NO ACTION HAS BEEN TAKEN BY THE ISSUER, THE COMPANY, THE JOINT BOOKRUNNERS, THE CO-MANAGERS OR ANY OF THEIR RESPECTIVE AFFILIATES THAT WOULD PERMIT AN OFFERING OF THE BONDS OR POSSESSION OR DISTRIBUTION OF THIS PRESS RELEASE OR ANY OFFERING OR PUBLICITY MATERIAL RELATING TO THE BONDS IN ANY JURISDICTION WHERE ACTION FOR THAT PURPOSE IS REQUIRED OTHER THAN IN JERSEY. PERSONS INTO WHOSE POSSESSION THIS PRESS RELEASE COMES ARE REQUIRED BY THE ISSUER, THE COMPANY, THE JOINT BOOKRUNNERS AND THE CO-MANAGERS TO INFORM THEMSELVES ABOUT, AND TO OBSERVE, ANY SUCH RESTRICTIONS.
THIS PRESS RELEASE IS NOT FOR DISTRIBUTION, DIRECTLY OR INDIRECTLY IN OR INTO THE UNITED STATES. THIS PRESS RELEASE IS NOT AN OFFER TO SELL SECURITIES OR THE SOLICITATION OF ANY OFFER TO BUY SECURITIES, NOR SHALL THERE BE ANY OFFER OF SECURITIES IN ANY JURISDICTION IN WHICH SUCH OFFER OR SALE WOULD BE UNLAWFUL.
THIS PRESS RELEASE 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, CANADA, AUSTRALIA, JAPAN, SOUTH AFRICA OR IN ANY JURISDICTION TO WHOM OR IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL. THE SECURITIES REFERRED TO IN THIS PRESS RELEASE HAVE NOT BEEN AND WILL NOT BE REGISTERED IN THE UNITED STATES UNDER THE US SECURITIES ACT OF 1933, AS AMENDED (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 SECURITIES REFERRED TO HEREIN MAY NOT BE OFFERED OR SOLD IN CANADA, AUSTRALIA, JAPAN OR SOUTH AFRICA OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY NATIONAL, RESIDENT OR CITIZEN OF CANADA, AUSTRALIA, JAPAN OR SOUTH AFRICA. THERE WILL BE NO PUBLIC OFFER OF THE SECURITIES IN THE UNITED STATES, CANADA, AUSTRALIA, JAPAN OR SOUTH AFRICA OR ANY OTHER JURISDICTION.
THIS PRESS RELEASE AND THE OFFERING WHEN MADE ARE ONLY ADDRESSED TO, AND DIRECTED IN MEMBER STATES OF THE EUROPEAN ECONOMIC AREA (THE "EEA") AT, PERSONS WHO ARE "QUALIFIED INVESTORS" WITHIN THE MEANING OF ARTICLE 2(1)(E) OF THE PROSPECTUS DIRECTIVE ("QUALIFIED INVESTORS"). FOR THESE PURPOSES, THE EXPRESSION "PROSPECTUS DIRECTIVE" MEANS DIRECTIVE 2003/71/EC, AS AMENDED.
SOLELY FOR THE PURPOSES OF THE PRODUCT GOVERNANCE REQUIREMENTS CONTAINED WITHIN: (A) EU DIRECTIVE 2014/65/EU ON MARKETS IN FINANCIAL INSTRUMENTS, AS AMENDED ("MIFID II"); (B) ARTICLES 9 AND 10 OF COMMISSION DELEGATED DIRECTIVE (EU) 2017/593 SUPPLEMENTING MIFID II; AND (C) LOCAL IMPLEMENTING MEASURES (TOGETHER, THE "MIFID II PRODUCT GOVERNANCE REQUIREMENTS"), AND DISCLAIMING ALL AND ANY LIABILITY, WHETHER ARISING IN TORT, CONTRACT OR OTHERWISE, WHICH ANY "MANUFACTURER" (FOR THE PURPOSES OF THE MIFID II PRODUCT GOVERNANCE REQUIREMENTS) MAY OTHERWISE HAVE WITH RESPECT THERETO, THE BONDS HAVE BEEN SUBJECT TO A PRODUCT APPROVAL PROCESS, WHICH HAS DETERMINED THAT: (I) THE TARGET MARKET FOR THE BONDS IS ELIGIBLE COUNTERPARTIES AND PROFESSIONAL CLIENTS ONLY, EACH AS DEFINED IN MIFID II; AND (II) ALL CHANNELS FOR DISTRIBUTION OF THE BONDS TO ELIGIBLE COUNTERPARTIES AND PROFESSIONAL CLIENTS ARE APPROPRIATE. ANY PERSON SUBSEQUENTLY OFFERING, SELLING OR RECOMMENDING THE BONDS (A "DISTRIBUTOR") SHOULD TAKE INTO CONSIDERATION THE MANUFACTURERS' TARGET MARKET ASSESSMENT; HOWEVER, A DISTRIBUTOR SUBJECT TO MIFID II IS RESPONSIBLE FOR UNDERTAKING ITS OWN TARGET MARKET ASSESSMENT IN RESPECT OF THE BONDS (BY EITHER ADOPTING OR REFINING THE MANUFACTURERS' TARGET MARKET ASSESSMENT) AND DETERMINING APPROPRIATE DISTRIBUTION CHANNELS.
THE TARGET MARKET ASSESSMENT IS WITHOUT PREJUDICE TO THE REQUIREMENTS OF ANY CONTRACTUAL OR LEGAL SELLING RESTRICTIONS IN RELATION TO ANY OFFERING OF THE BONDS.
FOR THE AVOIDANCE OF DOUBT, THE TARGET MARKET ASSESSMENT DOES NOT CONSTITUTE: (A) AN ASSESSMENT OF SUITABILITY OR APPROPRIATENESS FOR THE PURPOSES OF MIFID II; OR (B) A RECOMMENDATION TO ANY INVESTOR OR GROUP OF INVESTORS TO INVEST IN, OR PURCHASE, OR TAKE ANY OTHER ACTION WHATSOEVER WITH RESPECT TO THE BONDS.
THE BONDS ARE NOT INTENDED TO BE OFFERED, SOLD OR OTHERWISE MADE AVAILABLE TO AND SHOULD NOT BE OFFERED, SOLD OR OTHERWISE MADE AVAILABLE TO ANY RETAIL INVESTOR IN THE EEA. FOR THESE PURPOSES, A RETAIL INVESTOR MEANS A PERSON WHO IS ONE (OR MORE) OF: (I) A RETAIL CLIENT AS DEFINED IN POINT (11) OF ARTICLE 4(1) OF MIFID II; OR (II) A CUSTOMER WITHIN THE MEANING OF DIRECTIVE 2002/92/EC, WHERE THAT CUSTOMER WOULD NOT QUALIFY AS A PROFESSIONAL CLIENT AS DEFINED IN POINT (10) OF ARTICLE 4(1) OF MIFID II. CONSEQUENTLY, NO KEY INFORMATION DOCUMENT REQUIRED BY REGULATION (EU) NO 1286/2014, AS AMENDED (THE "PRIIPS REGULATION") FOR OFFERING OR SELLING THE BONDS OR OTHERWISE MAKING THEM AVAILABLE TO RETAIL INVESTORS IN THE EEA HAS BEEN PREPARED AND THEREFORE OFFERING OR SELLING THE BONDS OR OTHERWISE MAKING THEM AVAILABLE TO ANY RETAIL INVESTOR IN THE EEA MAY BE UNLAWFUL UNDER THE PRIIPS REGULATION.
IN ADDITION, IN THE UNITED KINGDOM THIS PRESS RELEASE IS BEING DISTRIBUTED ONLY TO, AND 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, AND (II) TO WHOM IT MAY OTHERWISE LAWFULLY BE COMMUNICATED (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS"). THIS PRESS RELEASE MUST NOT BE ACTED ON OR RELIED ON (I) IN THE UNITED KINGDOM, BY PERSONS WHO ARE NOT RELEVANT PERSONS, AND (II) IN ANY MEMBER STATE OF THE EEA OTHER THAN THE UNITED KINGDOM, BY PERSONS WHO ARE NOT QUALIFIED INVESTORS. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS PRESS RELEASE RELATES IS AVAILABLE ONLY TO (A) RELEVANT PERSONS IN THE UNITED KINGDOM AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS IN THE UNITED KINGDOM AND (B) QUALIFIED INVESTORS IN MEMBER STATES OF THE EEA (OTHER THAN THE UNITED KINGDOM).
ANY DECISION TO PURCHASE ANY OF THE BONDS SHOULD ONLY BE MADE ON THE BASIS OF AN INDEPENDENT REVIEW BY A PROSPECTIVE INVESTOR OF THE ISSUER'S AND THE COMPANY'S PUBLICLY AVAILABLE INFORMATION. NONE OF THE JOINT BOOKRUNNERS, THE CO-MANAGERS OR ANY OF THEIR RESPECTIVE AFFILIATES ACCEPT ANY LIABILITY ARISING FROM THE USE OF, OR MAKE ANY REPRESENTATION AS TO THE ACCURACY OR COMPLETENESS OF, THIS PRESS RELEASE OR THE ISSUER'S AND THE COMPANY'S PUBLICLY AVAILABLE INFORMATION. THE INFORMATION CONTAINED IN THIS PRESS RELEASE IS SUBJECT TO CHANGE IN ITS ENTIRETY WITHOUT NOTICE UP TO THE SETTLEMENT DATE.
EACH PROSPECTIVE INVESTOR SHOULD PROCEED ON THE ASSUMPTION THAT IT MUST BEAR THE ECONOMIC RISK OF AN INVESTMENT IN THE BONDS OR THE SHARES TO BE ISSUED OR TRANSFERRED AND DELIVERED UPON CONVERSION OF THE BONDS AND NOTIONALLY UNDERLYING THE BONDS (TOGETHER WITH THE BONDS, THE "SECURITIES"). NONE OF THE ISSUER, THE COMPANY, THE JOINT BOOKRUNNERS OR THE CO-MANAGERS MAKE ANY REPRESENTATION AS TO (I) THE SUITABILITY OF THE SECURITIES FOR ANY PARTICULAR INVESTOR, (II) THE APPROPRIATE ACCOUNTING TREATMENT AND POTENTIAL TAX CONSEQUENCES OF INVESTING IN THE SECURITIES OR (III) THE FUTURE PERFORMANCE OF THE SECURITIES EITHER IN ABSOLUTE TERMS OR RELATIVE TO COMPETING INVESTMENTS.
THE JOINT BOOKRUNNERS AND THE CO-MANAGERS ARE ACTING ON BEHALF OF THE COMPANY AND NO ONE ELSE IN CONNECTION WITH THE BONDS AND WILL NOT BE RESPONSIBLE TO ANY OTHER PERSON FOR PROVIDING THE PROTECTIONS AFFORDED TO CLIENTS OF THE JOINT BOOKRUNNERS AND THE CO-MANAGERS OR FOR PROVIDING ADVICE IN RELATION TO THE SECURITIES OR THE BONDS.
EACH OF THE ISSUER, THE COMPANY, THE JOINT BOOKRUNNERS, THE CO-MANAGERS AND THEIR RESPECTIVE AFFILIATES EXPRESSLY DISCLAIMS ANY OBLIGATION OR UNDERTAKING TO UPDATE, REVIEW OR REVISE ANY STATEMENT CONTAINED IN THIS PRESS RELEASE WHETHER AS A RESULT OF NEW INFORMATION, FUTURE DEVELOPMENTS OR OTHERWISE.
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