Also recognised in the Bonds Above £750m category, NATS was named winner in this year’s Loans Above £750m category. In June 2021, the regulated en-route air-traffic control business undertook a major refinancing exercise, unwinding its whole business securitisation debt structure and securing £1.6bn of funding – all in the middle of the pandemic.
The refinancing exercise involved issuing £750m of unsecured bonds and agreeing £850m of new, unsecured bank facilities. The latter took the form of a £400m 3+1+1-year sustainability-linked revolving facility agreement and a £450m two-year bridge facility. The sustainability-linked margin was based on Scope 1 and Scope 2 emissions, selected Scope 3 emissions and the company’s carbon disclosure project score.
As a result, NATS was able to prepay £252m of senior secured guaranteed amortising 5.25% bonds due in 2026, alongside the prepayment and cancellation of a £350m senior secured revolving term loan facility, a £50m senior secured revolving credit facility and a £380m senior secured liquidity facility.
This complex transaction greatly simplified the company’s financing structure, provided around £850m of additional liquidity and removed the significant restrictions associated with the whole business securitisation – meaning that NATS is now better placed to support the recovery of the aviation sector. Despite the challenging conditions at the time, the terms delivered from banks in the new debt facilities were in line with the company’s goals.
Provider: Barclays (active bookrunner, arranger, facility agent and hedge coordinator), BNP Paribas (active bookrunner, arranger, documentation agent and sustainability coordinator), NatWest (active bookrunner, arranger), MUFG (active bookrunner, arranger), Lloyds Bank (passive bookrunner, arranger and expert for the bond redemption), Bank of China (passive bookrunner, arranger).
Structure: £750m of unsecured bonds and £850m of new unsecured bank facilities.
“This was a super deal that involved refinancing securitised debt and introducing a COVID bridge to see NATS through until the company was back to profitability. A well-deserved winner in this category.”
National Grid
Highly commended in this category was National Grid with a large financing structure that was put in place to finance the company’s proposed strategic acquisition of Western Power Distribution. This included an £8.25bn acquisition bridge, which was expected to be primarily repaid by proceeds from two disposals, as well as a £1.1bn backstop facility to refinance the target opco’s debt.
The treasury invited all 22 of the company’s relationship banks into the acquisition facilities, with high participation rates. Among the notable features of this impressive exercise, the transaction was also the first bridge to reference SONIA, and the largest GBP-denominated bridge facility linked to SONIA at the time.