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AA unveils refinancing package

04 July 2017 09:56

The AA has announced a proposed refinancing package and a bond issue of up to £250m.

The AA said that further savings in annual interest costs would allow it to use more of its free cash flow to pay down debt in line with its strategy to de-lever over time.

AA Bond Co Limited, a subsidiary of the AA plc, has announced its intention to issue further class A notes under its multicurrency bond programme listed on the Irish Stock Exchange.

Subject to market conditions, it expected to issue up to £250m of fixed-rate class A notes with a six year tenor.

It said the proceeds were expected be used by the AA group to redeem the issuer's remaining £175m sub-class A1 Notes and £55m sub-class A4 notes in full on the next interest payment date, including any required make-whole payments.

AA Senior Co Limited, a subsidiary of AA plc, also announced its intention to replace its existing senior term facility with a new senior term facility.

It said this would result in a reduction of £98m in senior term debt, an extension of the maturity of that debt to 31 July 2021 and a reduction in the margin.

The borrower also announced its intention to replace its existing working facility with a new working capital facility of £75m (as opposed to the £150m currently in place), with a maturity to 31 July 2021 and, again, a reduced margin.

AA said these refinancings were in line with the its strategy to reduce overall group borrowings as well as the associated interest cost.

The extension in maturity of debt would mean that the next repayment of borrowings was due in July 2020, while further savings in annual interest costs would allow the company to use more of its free cash flow to pay down debt in line with its strategy to de-lever over time. At 9:56am: (LON:AA.) AA Plc share price was -1.3p at 227.7p

Story provided by StockMarketWire.com

Related Company: AA.

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