FOR IMMEDIATE RELEASE
THIS NOTICE IS IMPORTANT AND REQUIRES THE IMMEDIATE ATTENTION OF THE BONDHOLDERS
If the Bondholders are in any doubt about the contents of this notice or the action they should take they should consult a person authorised under the Financial Services and Market Act 2000 to advise on the Bonds such as their stockbroker, solicitor, tax adviser, accountant or other financial adviser.
18 July 2022
STAGECOACH GROUP PLC
(THE “ISSUER”)
NOTICE OF ENTRY INTO OF A DEED POLL RELATING TO
£400,000,000 4.00 per cent. Bonds due 2025 (the “Bonds”)
Common Code: 129800224/ISIN: XS1298002244
The Issuer announces that it has today entered into a deed poll in in favour of the Trustee for the Bondholders in the form set out in Appendix 1 (the “Deed Poll”). The additional undertakings provided by the Issuer in the Deed Poll are being provided by the Issuer in support of Inframobility UK Bidco Limited’s (“PEIF III Bidco”) previously announced intention to maintain an investment grade rating on the Bonds following PEIF III Bidco’s all cash offer for the issued share capital of the Issuer becoming unconditional as to acceptances.
Terms not otherwise defined herein have the meanings given to them in the trust deed dated 29 September 2015 between, among others, the Issuer and HSBC Corporate Trustee Company (UK) Limited (the “Trustee”) (as amended, amended and restated, supplemented and/or otherwise modified from time to time, the “Trust Deed”), copies of which are available for inspection at the specified offices of the Principal Paying Agent.
Enquiries
| Ross Paterson Katrina Leese | Tel: +44 (0)1738 442 111 Tel: +44 (0)1738 442 111 |
| Bruce Dingwall | Tel: +44 (0)1738 442 111 |
This Notice is given by:
Stagecoach Group PLC
10 Dunkeld Road
Perth
Perthshire
PH1 5TW
Dated: 18 July 2022
APPENDIX 1
DEED POLL
THIS DEED POLL is made on ___________________ 2022
BY:
STAGECOACH GROUP PLC, a company incorporated with limited liability in Scotland with registered number SC100764 (the “Issuer”)
IN FAVOUR OF:
HSBC CORPORATE TRUSTEE COMPANY (UK) LIMITED as trustee for the holders of the Bonds (the “Trustee”).
NOW THIS DEED POLL WITNESSES as follows:
1. DEFINITIONS
Unless otherwise defined in Schedule 2 (Definitions) to this Deed Poll, words and expressions have the meanings and constructions given to them in the trust deed dated 29 September 2015 and made between the Issuer and the Trustee (the “Trust Deed”).
2. UNDERTAKINGS
2.1 By this Deed Poll, the Issuer undertakes to the Trustee that for so long as any of the Bonds remains outstanding, the Issuer will be bound by and comply with the terms of the undertakings set out in Schedule 1 (Undertakings) to this Deed Poll (the “Undertakings”). For the avoidance of doubt, the Issuer agrees that the Undertakings are supplemental to the provisions of the Trust Deed and it continues to be bound by the terms thereof.
2.2 The Trustee is entitled to enforce the Undertakings against the Issuer as if the Undertakings were set out in full and formed part of the Trust Deed and no further action will be required on the part of the Trustee to have the benefit of, and to be able to enforce, the Undertakings in each case.
3. FURTHER ASSURANCE
The Issuer undertakes to perform all further acts and things, and execute and deliver such further documents as may be required by law or as may be necessary in order for the Trustee to enforce the Undertakings against the Issuer.
4. PARTIAL INVALIDITY
If any provision of this Deed Poll is or becomes invalid, illegal or unenforceable in any jurisdiction, that will not affect the legality, validity or enforceability of the remaining provisions in that jurisdiction or of that provision in any other jurisdiction.
5. GOVERNING LAW AND JURISDICTION
5.1 This Deed Poll and any non-contractual obligations arising out of or in connection with it are governed by and shall be construed in accordance with English law.
5.2 The English courts will have exclusive jurisdiction to settle any dispute which may arise out of or in connection with the creation, validity, effect, interpretation or performance of, the legal relationships established by, this Deed Poll or otherwise arising in connection with this Deed Poll and for such purposes the Issuer irrevocably submits to the jurisdiction of the English courts.
6. THIRD PARTIES
This Deed Poll is enforceable under the Contracts (Rights of Third Parties) Act 1999 by the Trustee, but not by any other person.
IN WITNESS WHEREOF this Deed Poll has been executed and delivered by the Issuer and the day and the year first above written.
SCHEDULE 1
UNDERTAKINGS
1. RESTRICTED PAYMENTS
1.1 Except as permitted under paragraph 1.2 below, neither the Issuer nor any other member of the Group may make a Restricted Payment.
1.2 Paragraph 1.1 above does not apply to a Permitted Payment or a Permitted Transaction.
2. FINANCIAL INDEBTEDNESS
2.1 Except as permitted under paragraph 2.2 below, neither the Issuer nor any other member of the Group may incur or allow to remain outstanding any Financial Indebtedness.
2.2 Paragraph 2.1 above does not apply to Financial Indebtedness which is Permitted Financial Indebtedness.
3. SEPARATENESS
The Issuer undertakes in respect of itself and will procure in respect of each other member of the Group that at all times:
3.1 it always holds itself out as a separate entity;
3.2 it conducts its own business in its own name;
3.3 its books and records are not maintained with or commingled with those of any other person or entity;
3.4 its bank accounts and the debts represented thereby are not commingled with those of any other person or entity which is not a member of the Group;
3.5 its assets or revenues are not commingled with those of any other person or entity (save with respect to those of any other member of the Group);
3.6 separate financial statements in relation to its financial affairs are maintained;
3.7 it will use reasonable endeavours to correct any known misunderstandings regarding its separate identity as soon as reasonably possible.
4. TRANSACTIONS WITH AFFILIATES
4.1 Except for any Permitted Affiliate Loan or a Permitted Transaction, neither the Issuer nor any other member of the Group may be a creditor in respect of any Financial Indebtedness of any Excluded Entity or Sponsor Affiliate.
4.2 Except for any Permitted Affiliate Guarantee or a Permitted Transaction, neither the Issuer nor any other member of the Group may incur or allow to remain outstanding any guarantee in respect of any obligation of any Excluded Entity or Sponsor Affiliate.
4.3 Except in case of a Permitted Transaction or any Permitted Payment and provided such transactions are permitted under applicable law, neither the Issuer nor any other member of the Group may enter into any transaction with any Sponsor Affiliate or Excluded Entity, except on arm’s length terms and for fair market value (or better for the Issuer or the relevant member of the Group).
5. FINANCIAL STATEMENTS
With effect from the date of this Deed Poll, the Issuer will deliver to the Trustee as soon as the same become available but in any event:
(a) within 180 days after the end of each of its financial years, audited consolidated financial statements for that financial year for the Issuer; and
(b) within 90 days after the end of each financial half-year, unaudited consolidated financial statements for the Issuer for that financial half-year.
6. COMPLIANCE CERTIFICATE
6.1 The Issuer must deliver to the Trustee a certificate (a “Compliance Certificate”) with each set of Annual Financial Statements and Half-Yearly Financial Statements.
6.2 The Compliance Certificate must set out:
(a) computations as to compliance with Paragraph 7 (Financial Covenants) and the Lock-Up Tests;
(b) where any adjustment is made pursuant to Paragraph 7 (Financial Covenants), calculations of such adjustments; and
(c) a confirmation that no Event of Default or Lock-up Event has occurred or is continuing, or if an Event of Default has occurred and is continuing, that steps (which must be specified) are being taken to remedy such Event of Default.
6.3 Each Compliance Certificate must be signed by one director of the Issuer.
7. FINANCIAL COVENANTS
7.1 Subject always to Paragraph 7.8, the Issuer will ensure that on each Calculation Date:
(a) the Interest Cover Ratio is not less than 1.8:1; and
(b) the Leverage Ratio is not greater than 4.5:1.
7.2 The financial covenants set out in this Paragraph 7 shall be calculated in accordance with the Accounting Principles and tested by reference to each of the financial statements published pursuant to sub-paragraphs (a) and (b) of Paragraph 5 (Financial Statements) and each Compliance Certificate published pursuant to Paragraph 6 (Compliance Certificate).
7.3 For the purpose of the Financial Covenants and the Lock-Up Tests for all purposes under this Deed Poll, in respect of each Subsidiary which is acquired by a member of the Group, the portion of Consolidated Net Finance Charges attributable to that entity will be annualised for the period from the date of completion of the relevant acquisition to the relevant Calculation Date falling less than 12 months thereafter by multiplying Consolidated Net Finance Charges by 365 and dividing by the number of days elapsed in the period from and including the date of completion of the relevant acquisition to and including the relevant Calculation Date (and Consolidated Net Finance Charges in respect of the period prior to the date of completion of the relevant acquisition shall be ignored).
7.4 For the purpose of the financial covenant set out in this Paragraph 7 and for the Lock-Up Tests:
(a) in determining Consolidated EBITDA for a Relevant Period, there shall be included:
(i) the consolidated earnings before interest, tax, depreciation and amortisation (calculated on the same basis as Consolidated EBITDA) for such Relevant Period for any Acquired Entity or Business; and
(ii) if material, a Pro Forma Adjustment in respect of any Acquired Entity or Business acquired during such Relevant Period by any member of the Group unless, in respect of any Pro Forma Adjustment which may be made as a result of cost savings, the Issuer has elected not to include such Pro Forma Adjustment provided that the aggregate of such Pro Forma Adjustments may not exceed, pro forma for the adjustments, 20 per cent. of the Consolidated EBITDA in any Relevant Period;
(b) in determining Consolidated EBITDA for a Relevant Period, there shall be excluded the consolidated earnings before interest, tax depreciation and amortisation (calculated on the same basis as Consolidated EBITDA) for such period for any Sold Entity or Business and the portion of Consolidated Net Finance Charges and Consolidated Total Net Debt attributable to that entity during that Relevant Period shall be ignored; and
(c) in determining Consolidated Net Finance Charges and Consolidated Total Net Debt for a Relevant Period, the Consolidated Finance Charges and Consolidated Total Net Debt shall be adjusted to reflect any Consolidated Finance Charges or Consolidated Total Net Debt attributable to any Acquired Entity or Business acquired during such Relevant Period.
7.5 Any member of the Group which is intended to be, but which (as at the end of the Relevant Period) has not been, disposed of will have its results included in calculating Consolidated EBITDA, Consolidated Net Finance Charges and Consolidated Total Net Debt, even if the intention to dispose of that member of the Group would lead to it being treated as a current asset for the purposes of the Accounting Principles.
7.6 For the purpose of calculating any financial ratio (including any pro forma compliance), if any member of the Group has entered into any Relevant Contract in each case during a Relevant Period, and the Company reasonably projects (such projections to be based on reasonable assumptions and consistent with prudent industry practice) any Consolidated EBITDA to be attributable to that Relevant Contract within 24 months of the last day of that Relevant Period, Consolidated EBITDA may be adjusted by the Issuer assuming that the Consolidated EBITDA attributable to that Relevant Contract is the earnings before interest, tax, depreciation and amortisation (calculated on the same basis as Consolidated EBITDA) which the Issuer reasonably projects to be attributable to that Relevant Contract for that Relevant Period on a 12 Month mature basis.
7.7 There will be no double counting, that is, no item may be taken into account more than once in any calculations.
7.8 If a Compliance Certificate delivered to the Trustee pursuant to Paragraph 6 (Compliance Certificate) for any period shows, or the Issuer determines that for any Relevant Period (if the Compliance Certificate for that period has not been published when due), that there would be a breach of this Paragraph 7, and no later than 10 Business Days after the date on which the relevant Compliance Certificate was (or was due to be) delivered to the Trustee, the Issuer delivers to the Trustee a written statement that it will receive New Shareholder Injections no later than 20 Business Days after the date on which the Compliance Certificate was (or was due to be) delivered (the “Equity Cure Exercise Period”) in an amount (the “Equity Cure Amount”) at least sufficient such that if the proceeds of the those New Shareholder Injections had been received and applied in prepayment of Consolidated Borrowings, in the case of any breach of the Interest Cover Ratio, on the first day of the Relevant Period, or, in the case of any breach of the Leverage Ratio, on the last day of the Relevant Period, the Financial Covenants for the Relevant Period would have been complied with (the “Equity Cure Right”).
7.9 Upon receipt of the Equity Cure Amount in accordance with paragraph 7.8 above, the relevant financial ratio will be deemed to have been satisfied on the date of the relevant Compliance Certificate as though no breach had ever occurred and any related Event of Default will be deemed not to occur or have occurred.
7.10 The Equity Cure Right:
(a) may only be exercised up to three times in the period from the date of this Deed Poll to the Maturity Date; and
(b) may not be exercised in respect of more than two consecutive Calculation Dates.
7.11 The financial covenant in paragraph 7.1(a) will be deemed to have been complied with when Consolidated Net Finance Charges is negative (i.e. all interest payable in respect of the Relevant Period to the Group on any Cash or Cash Equivalent Investment exceeds Consolidated Finance Charges).
7.12 The financial covenant in paragraph 7.1(b) will be deemed to have been complied with when Consolidated Total Net Debt is negative (i.e. Cash and Cash Equivalent Investments exceed Consolidated Borrowings).
7.13 The Issuer’s current annual accounting reference date is 30 April and its half year reporting date is 31 October. The Issuer’s financial statements and accounts referred to in this Deed Poll may be prepared for a period ending not more than seven days before or following:
(a) 30 April, for a 52 or 53 week reporting period (in the case of annual statements or accounts); and
(b) 31 October, for a 26 or 27 week reporting period (in the case of its first half semi-annual statements or accounts).
References in this Deed Poll to annual or semi-annual financial statements and accounts shall be construed accordingly.
SCHEDULE 2
DEFINITIONS
“Acceptable Bank” means a bank or financial institution which has a rating for its long term unsecured and non-credit enhanced debt obligations of BBB or higher by S&P or Fitch or Baa2 or higher by Moody's or a comparable rating from an internationally recognised credit rating agency.
“Accounting Principles” means United Kingdom-adopted international accounting standards and International Financial Reporting Standards, as issued by the International Accounting Standards Board.
“Acquired Entity or Business” means any person or Business acquired by a member of the Group other than from another member of the Group.
“Affiliate” means, in relation to a person, a Subsidiary or a Holding Company of a person or any other Subsidiary of that Holding Company.
“Annual Financial Statements” means the audited annual financial statements delivered pursuant to paragraph 5(a) of Schedule 1 (Undertakings).
“Backward Looking Lock-Up Test” means, for the Relevant Period ending on each Calculation Date:
(a) the Interest Cover Ratio is not less than 3.0:1; and
(b) the Leverage Ratio is not greater than 3.5:1.
“Business” means an integrated set of activities and assets that is capable of being conducted and managed for the purpose of providing goods or services to customers, generating investment income (including, but not limited to, dividends or interest) or generating other income from ordinary activities.
“Calculation Date” means, in any given year: (a) the Saturday falling on or nearest to 30 April and (b) the Saturday falling 26 weeks after the date in (a).
“Capital Expenditure” means any expenditure or obligation in respect of expenditure which, in accordance with the Accounting Principles, is treated as capital expenditure and including the capital element or any expenditure or obligation incurred in connection with a Finance Lease.
“Cash” means, at any time, cash in hand or at bank and (in the latter case) credited to an account in the name of any member of the Group to which that member of the Group is alone (or together with other members of the Group) beneficially entitled and for so long as:
(a) that cash is repayable on demand or within 30 days of demand;
(b) repayment of that cash is not contingent on the prior discharge of any other indebtedness of the Issuer or other member of the Group or of any other person whatsoever or on the satisfaction of any other condition (other than as referred to in paragraph (c) below); and
(c) there is no Security over that cash except for any Security for Consolidated Borrowings incurred by a member of the Group in the ordinary course of their banking arrangements.
“Cash Equivalent Investments” means at any time:
(a) certificates of deposit maturing within one year after the relevant date of calculation and issued by an Acceptable Bank;
(b) any investment in marketable debt obligations issued or guaranteed by the government of:
(i) the United States of America;
(ii) the United Kingdom; or
(iii) provided that it has a credit rating of not less than A-1 (or equivalent) by S&P, F1 by Fitch or P-1 by Moody's, any member state of the European Economic Area or any Participating Member State,
or by an instrumentality or agency of any of them (having an equivalent credit rating if required) maturing within one year after the relevant date of calculation and not convertible or exchangeable to any other security;
(c) commercial paper not convertible or exchangeable to any other security:
(i) for which a recognised trading market exists;
(ii) issued by an issuer incorporated in:
(A) the United States of America;
(B) the United Kingdom; or
(C) provided that it has a credit rating of not less than A-1 by S&P, F1 by Fitch or P-1 by Moody's, any member state of the European Economic Area or any Participating Member State;
(iii) which matures within one year after the relevant date of calculation; and
(iv) which has a credit rating of either A-1 or higher by S&P or F1 or higher by Fitch or P-1 or higher by Moody's, or, if no rating is available in respect of the commercial paper, the issuer of which has, in respect of its long-term unsecured and non-credit enhanced debt obligations, an equivalent rating; or
(d) any investment in money market funds which (i) have a credit rating of either A-1 or higher by S&P or F1 or higher by Fitch or P-1 or higher by Moody's; (ii) invest substantially all of their assets in securities of the types described in paragraphs (a) to (c) above; and (iii) can be turned into cash on not more than 30 days' notice,
in each case to which a member of the Group is alone (or together with any other member of the Group) beneficially entitled at that time and which is not issued or guaranteed by any member of the Group or subject to any Security for Consolidated Borrowings incurred by a member of the Group.
“Compliance Certificate” has the meaning given to such term in Paragraph 6.1 of Schedule 1 (Undertakings).
“Consolidated Borrowings” means, at any time and without double-counting, the aggregate outstanding principal, capital or nominal amount (and any fixed or minimum premium payable on prepayment or redemption) of any indebtedness of members of the Group for or in respect of:
(a) moneys borrowed and debit balances at banks or other financial institutions;
(b) any acceptances under any acceptance credit or bill discount facility (or dematerialised equivalent);
(c) any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument;
(d) any Finance Lease but only to the extent of the capitalised value thereof;
(e) receivables sold or discounted (other than any receivables to the extent they are sold on a non-recourse basis);
(f) any counter-indemnity obligation in respect of a guarantee, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution in respect of an underlying liability of an entity which is not a member of the Group which liability would fall within one of the other paragraphs of this definition;
(g) any amount raised by the issue of shares which are redeemable (other than at the option of the issuer) before the Maturity Date or are otherwise classified as borrowings under the Accounting Principles;
(h) any amount raised under any other transaction (including any forward sale or purchase agreement, sale and sale back or sale and leaseback agreement) having the commercial effect of a borrowing and which is classified as borrowings under the Accounting Principles; and
(i) (without double counting) the amount of any liability in respect of any guarantee or indemnity for any of the items referred to in paragraphs (a) to (h) above,
but in each case excluding:
(i) any Financial Indebtedness in respect of Subordinated Indebtedness;
(ii) any Permitted Treasury Transaction; and
(iii) any indebtedness owing from one member of the Group to another member of the Group.
“Consolidated EBITDA” means, in respect of any Relevant Period, the consolidated operating profit of the Group before taxation (including the results from discontinued operations):
(a) before deducting any interest, commission, fees, discounts, prepayment fees, premia or charges, Transaction Costs and other finance payments whether paid, payable or capitalised by any member of the Group (calculated on a consolidated basis) in respect of that Relevant Period;
(b) not including any accrued interest owing to any member of the Group;
(c) before taking into account any Exceptional Items;
(d) before taking into account any unrealised gains or losses on any derivative instrument (other than any derivative instrument which is accounted for on a hedge accounting basis);
(e) before taking into account any Pension Items;
(f) before taking into account any expenses relating to employee profit sharing and incentive schemes;
(g) before taking account of any gains or losses on revaluations of assets;
(h) after adding back any amount attributable to the amortisation, depreciation or impairment of assets of members of the Group in that Relevant Period,
in each case, so that no amount may be added or deducted or taken into account more than once, to the extent added, deducted or taken into account, as the case may be, and without double counting for the purposes of determining operating profit of the Group before taxation.
“Consolidated Finance Charges” means, for any Relevant Period, the aggregate amount of the accrued interest, commission, ongoing agency fees, commitment fees and other fees, discounts, prepayment fees, premiums or charges and other finance payments in respect of Consolidated Borrowings, whether drawn or undrawn, by any member of the Group (calculated on a consolidated basis) as reported as costs in the financial statements of the Issuer in respect of that Relevant Period:
(a) excluding any upfront fees or costs which are included as part of the effective interest rate adjustments;
(b) excluding Transaction Costs;
(c) including any commission, fees, discounts and other finance payments payable by (and deducting any such amounts payable to) any member of the Group under any interest rate hedging arrangement; and
(d) excluding any unrealised gains or losses on any financial instruments,
and so that no amount may be added or deducted more than once.
“Consolidated Net Finance Charges” means, for any Relevant Period, Consolidated Finance Charges for that Relevant Period after deducting any interest payable in respect of that Relevant Period to the Group on any Cash or Cash Equivalent Investment.
“Consolidated Total Net Debt” means, at any time, the aggregate amount of all obligations of members of the Group for or in respect of Consolidated Borrowings at that time but deducting the aggregate amount of Cash and Cash Equivalent Investments held at that time by any member of the Group, and so that no amount may be included, deducted or excluded more than once.
“Consumer Price Index” means the Consumer Price Index published by the Office for National Statistics or any official index replacing it.
“Controlling Shareholder” means Inframobility UK Bidco Limited.
“European Union” means the European Union as its membership may be constituted from time to time and any successor thereto.
“Excluded Entity” means any Affiliate of the Issuer which is not a member of the Group.
“Exceptional Items” means any material items of an unusual or non-recurring nature which represent gains or losses including those arising on:
(a) the restructuring of the activities of an entity and reversals of any provisions for the cost of restructuring;
(b) disposals, revaluations or impairment of non-current assets; and
(c) disposals of assets associated with discontinued operations.
“Existing Financial Indebtedness” means any Financial Indebtedness of the Group subsisting as at the date of this Deed Poll.
“Finance Lease” means any lease or hire purchase contract, a liability under which would, in accordance with the Accounting Principles, be treated as a balance sheet liability.
“Financial Covenants” means the financial covenants set out in paragraph 7.1 of Schedule 1 (Undertakings).
“Financial Indebtedness” means any indebtedness for or in respect of:
(a) moneys borrowed and debit balances at banks or other financial institutions;
(b) any amount raised by acceptance under any acceptance credit or bill discounting facility (or dematerialised equivalent);
(c) any amount raised pursuant to any note purchase facility or the issue of bonds (but not Trade Instruments), notes, debentures, loan stock or any similar instrument;
(d) the amount of any liability in respect of any Finance Leases but only to the extent of the capitalised value thereof;
(e) receivables sold or discounted (other than any receivables to the extent that they are sold on a non-recourse basis, subject to customary representations);
(f) any Treasury Transaction;
(g) any counter-indemnity obligation in respect of a guarantee, indemnity, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution (but not, in any case, Trade Instruments) in respect of an underlying liability of an entity which is not the Issuer or any member of the Group which liability would fall within one of the other paragraphs of this definition;
(h) any amount raised by the issue of shares which are redeemable (other than at the option of the issuer) before the Maturity Date or are otherwise classified as borrowings under the Accounting Principles;
(i) any amount of any liability under an advance or deferred purchase agreement if: (i) one of the primary reasons for entering into the agreement is to raise finance or to finance the acquisition or construction of the asset or service in question; or (ii) the agreement is in respect of the supply of assets or services and payment is due more than 120 days after the date of supply;
(j) any amount raised under any other transaction (including any forward sale or purchase, sale and sale back or sale and leaseback agreement) not referred to in any other paragraph of this definition, having the commercial effect of a borrowing or otherwise and classified as borrowings under the Accounting Principles; and
(k) the amount of any liability in respect of any guarantee for any of the items referred to in paragraphs (a) to (j) above,
in each case, without doubt counting.
“Fitch” means Fitch Ratings Limited or any successor to its rating business.
“Forward Looking Lock-Up Test” means, for the Relevant Period beginning on the day after the relevant Calculation Date:
(a) the Interest Cover Ratio is not less than 3.0:1; and
(b) the Leverage Ratio is not greater than 3.5:1;
“Half-Yearly Financial Statements” means the unaudited semi-annual financial statements delivered pursuant to paragraph 5(b) of Schedule 1 (Undertakings).
“Holding Company” means, in relation to a person, any other person in respect of which it is a Subsidiary.
“Indexed” means, in respect of any reference to that amount, an adjustment to that amount (as previously indexed) as such amount may be adjusted up or down at the beginning of each calendar year by a percentage equal to the amount of percentage increase or, as the case may be, decrease in the Consumer Price Index for such year.
“Initial Investor” means: (a) Pan-European Infrastructure III S.C.S.P. (acting by its general partner PEIF III GP (Lux) S.a r.l.) and each of their subsidiary undertakings; (b) any fund, partnership, investment vehicle or other entity (whether corporate or otherwise) established in any jurisdiction whose general partner is PEIF III GP (Lux) S.a r.l.; and (c) any fund, partnership, investment vehicle or other entity (whether corporate or otherwise) established in any jurisdiction and which is managed or principally advised by DWS Alternatives Global Limited or its subsidiary undertakings, any parent undertaking of DWS Alternatives Global Limited and any subsidiary undertakings of that parent undertaking (together, “DWS”), and their respective Affiliates and funds managed or advised by them provided that, in each case, this will not include a portfolio company of any of them.
“Intercreditor Agreement” means the intercreditor agreement to be entered into by, among others, the Controlling Shareholder and certain existing lenders to the Issuer regulating the priority, entitlement and interest of, among others, those existing lenders, the Trustee (as defined in the Trust Deed) and the holders of the Bonds to the Transaction Security.
“Interest Cover Ratio” means, in respect of any Relevant Period, the ratio of Consolidated EBITDA to Consolidated Net Finance Charges for that Relevant Period.
“Investment Grade Rating” means, in relation to an entity, a rating for its long-term unsecured and non credit-enhanced debt obligations of BBB- or higher by S&P or Fitch or Baa3 or higher by Moody's or a comparable rating from an internationally recognised credit rating agency.
“Investors” means the Initial Investor, and their or any subsequent successors or assigns or transferees.
“Leverage Ratio” means, in respect of any Relevant Period, the ratio of Consolidated Total Net Debt on the last day of such Relevant Period to Consolidated EBITDA for such Relevant Period.
“Lock-Up Event” means any breach of any Lock-Up Test.
“Lock-up Tests” means the Backward Looking Lock-Up Test and the Forward Looking Lock-Up Test.
“Maturity Date” means 29 September 2025.
“Moody's” means Moody's Investor Services Limited or any successor to its ratings business.
“New Shareholder Injections” means the aggregate amount subscribed for by the Controlling Shareholder for:
(a) ordinary shares in the Issuer (including any share premium); or
(b) subordinated loan notes or other subordinated debt instruments in the Issuer.
“Participating Member State” means any member state of the European Union that has the euro as its lawful currency in accordance with legislation of the European Union relating to Economic and Monetary Union.
“Pension Items” means any income or charge attributable to a post-employment benefit scheme other than the current service costs.
“Permitted Additional Financial Indebtedness” means Financial Indebtedness incurred by the Issuer or any member of the Group which is not otherwise Permitted Financial Indebtedness provided that:
(a) the creditors of such Financial Indebtedness (the “Incoming Creditors”) (or their representative) accede to the Intercreditor Agreement;
(b) the Incoming Creditors do not, and may not at any time, benefit from any Security other than pursuant to the Transaction Security;
(c) such Financial Indebtedness ranks no higher than pari passu to the Bonds;
(d) the incurrence of such Financial Indebtedness will not cause any borrowing, guaranteeing, securing or similar limit binding on the Issuer or the relevant member of the Group to be breached;
(e) other than where such Financial Indebtedness is Permitted Refinancing Debt (as defined below), the Issuer delivers to the Trustee a certificate either:
(i) at the time of establishing such Permitted Additional Financial Indebtedness confirming that no Event of Default is subsisting or would occur as a result of the incurrence of such Financial Indebtedness if such Permitted Additional Financial Indebtedness were incurred at the time of its establishment; or
(ii) if no certificate has been delivered pursuant to paragraph (i) above, at the time of incurring such Permitted Additional Financial Indebtedness confirming that no Event of Default is subsisting or would occur as a result of the incurrence of such Financial Indebtedness; and
(f) the Issuer has delivered to the Trustee a certificate certifying that it is projecting compliance with the Lock-Up Tests as at the Calculation Date immediately following the incurrence of the proposed Permitted Additional Financial Indebtedness on a pro forma basis; or
(g) immediately following the incurrence of such Permitted Additional Financial Indebtedness and any associated repayment of any Financial Indebtedness of the Group, the Financial Indebtedness of the Group (excluding any Financial Indebtedness arising under a Treasury Transaction) will increase (calculated on a pro forma basis) by no more than the amount of the Permitted Additional Financial Indebtedness which will be used to fund any fees, costs, expenses, Taxes and hedging termination payments arising in connection with the incurrence of the Permitted Additional Financial Indebtedness and any associated repayment of any Financial Indebtedness of the Group (any Permitted Additional Financial Indebtedness incurred on this basis being “Permitted Refinancing Debt”).
“Permitted Affiliate Guarantee” means any guarantee in respect of the obligations of any Sponsor Affiliate or Excluded Entity or as a Permitted Transaction and the outstanding principal amount of which does not exceed £2,000,000 (Indexed) (or its equivalent in other currencies) in aggregate at any time.
“Permitted Affiliate Loan” means:
(a) any loan to a Sponsor Affiliate or Excluded Entity which constitutes a Permitted Payment; or
(b) any loan to a Sponsor Affiliate or Excluded Entity not permitted by the preceding paragraph so long as the aggregate amount of the Financial Indebtedness under any such loans does not exceed £2,000,000 (Indexed) (or its equivalent in other currencies) at any time.
“Permitted Financial Indebtedness” means Financial Indebtedness:
(a) which is Existing Financial Indebtedness;
(b) which is Subordinated Indebtedness;
(c) which is Permitted Additional Financial Indebtedness;
(d) arising under (i) a Permitted Affiliate Loan; (ii) a Permitted Affiliate Guarantee; (iii) a Permitted Treasury Transaction; or (iv) any Financial Indebtedness in respect of which the Issuer or any other member of the Group is a creditor;
(e) arising under any netting or set-off arrangement entered into by the Issuer or any member of the Group in the ordinary course of its banking arrangements;
(f) arising under any loan made by any member of the Group to any other member of the Group;
(g) arising under any Finance Lease entered into, amended, renewed or extended by any member of the Group from time to time;
(h) which is trade credit given on normal commercial terms (including, without limitation, the making of loans and the granting of credit to customers) in the ordinary course of business; or
(i) not permitted by the preceding paragraphs or as a Permitted Transaction and the outstanding principal amount of which does not exceed 25 per cent. of Consolidated Borrowings in aggregate at any time.
“Permitted Payment” means any of the following:
(a) a payment or payments of management fees, advisory fees to any Sponsor Affiliate of up to £1,000,000 (Indexed) (or its equivalent in other currencies) in aggregate in any financial year provided that payment of management fees may not be permitted if an Event of Default is outstanding;
(b) a payment or payments to any Sponsor Affiliate or Excluded Entity of actual costs that have arisen in respect of auditor fees, independent director fees and of such sums as are necessary in order for such entities to fund holding company costs and expenses and the costs of maintaining their corporate existence;
(c) a payment or payments of up to £1,000,000 (Indexed) (or equivalent in other currencies) in aggregate in any financial year by the Issuer to the Controlling Shareholder or any Holding Company of the Controlling Shareholder or any Investor to fund payments to any management incentive plan of the Issuer;
(d) a Restricted Payment provided that the Restricted Payment Condition is satisfied; or
(e) a payment or payments of any Tax assessed on the Issuer, any member of the Group, any Excluded Entity or Sponsor Affiliate in relation to the business carried out by the Group and/or acting as a holding company of the Group.
“Permitted Transaction” means:
(a) the solvent liquidation or reorganisation of any member of the Group other than the Issuer so long as any payments or assets distributed as a result of such liquidation or reorganisation are distributed to other members of the Group; or
(b) transactions conducted in the ordinary course of trading on arm's length terms.
“Permitted Treasury Transaction” means a treasury transaction which:
(a) is for the purpose of hedging interest rate liabilities of the Issuer or any member of the Group in respect of any Permitted Financial Indebtedness (including, for the avoidance of doubt, any such treasury transactions executed by way of deal contingent swaps); or
(b) is entered into for the hedging of actual or projected real exposures arising in the ordinary course of business of the Issuer or any member of the Group and not for speculative purposes.
“Pro Forma Adjustment” means in relation to an acquisition of or investment in an Acquired Entity or Business made or to be made in any Relevant Period, with respect to the Consolidated EBITDA of that Acquired Entity or Business, the pro forma increase in such Consolidated EBITDA projected by the Issuer in good faith as a result of:
(a) reasonably identifiable and supportable costs savings and synergies realisable during the period of 12 months from the date of the relevant acquisition or investment combining the operations of such Acquired Entity or Business with the operations of the Group, provided that so long as such costs savings and synergies will be realisable at any time during such period, it may be assumed, for purposes of projecting such pro forma increase to such Consolidated EBITDA, that such costs savings and synergies will be realisable during the entire such period, provided further that any such pro forma increase to such Consolidated EBITDA shall be without duplication for costs savings and synergies actually realised during such period and already included in such Consolidated EBITDA; and
(b) Consolidated EBITDA or revenues attributable to any contract or incurred capital expenditure of an Acquired Entity or Business on a mature basis for a 12 month period thereafter, provided that such Consolidated EBITDA and/or revenues are projected to be first earned or received within 24 months of the date of the relevant acquisition or investment.
“Relevant Contract” means any signed contract entered into by a member of the Group pursuant to which Capital Expenditure is incurred.
“Relevant Period” means, in respect of any Calculation Date, for the purpose of:
(a) the Financial Covenants, the period of approximately 12 months ending on that Calculation Date;
(b) any Backward Looking Lock-Up Test, the period of approximately 12 months ending on that Calculation Date; and
(c) any Forward Looking Lock-Up Test, the period of approximately 12 months commencing on the date immediately following that Calculation Date.
“Restricted Payment” means any payment (including, but not limited to, any payment of or in respect of distributions, dividends, bonus issues, return of capital, fees, interest, principal, loans or other amounts whatsoever) in cash or in kind to the Controlling Shareholder, any Excluded Entity or any Sponsor Affiliate other than Permitted Payments.
“Restricted Payment Condition” means the Issuer has delivered to the Trustee a certificate confirming that:
(a) no Lock-Up Event has occurred and is continuing (as at the most recent Calculation Date), provided that such computations have been adjusted to reflect an assumption that the proposed Restricted Payment has been made; and
(b) no Event of Default has occurred and is continuing or would occur immediately after the making of the Restricted Payment.
“S&P” means Standard & Poor's Rating Services or any successor to its ratings business.
“Security” means a mortgage, charge, pledge, lien or other security interest securing any obligation of any person or any other agreement or arrangement having a similar effect.
“Sold Business or Entity” means any person or Business transferred or otherwise disposed of by a member of the Group, except where the transfer or disposal is to another member of the Group.
“Sponsor Affiliate” means:
(a) each Investor and each of its Affiliates;
(b) any trust of which an Investor or any of its Affiliates is a trustee;
(c) any partnership of which an Investor or any of its Affiliates is a partner; and
(d) any trust, fund, limited partnership or other entity which is directly or indirectly managed or advised by, or is under the control of, an Investor or any of its Affiliates provided that any such trust, fund, limited partnership or other entity which has been established for at least six months solely for the purpose of making, purchasing or investing in loans or debt securities and which is directly or indirectly managed, advised or controlled independently from all other trusts, funds, limited partnership or other entities directly or indirectly managed, advised or controlled by that Investor or any of its Affiliates which have been established for the primary or main purpose of investing in the share capital of companies will not constitute a Sponsor Affiliate and provided further that no member of the Group will constitute a Sponsor Affilaite.
“Subordinated Indebtedness” means any Financial Indebtedness which is contractually subordinated to the Bonds.
“Subsidiary” means in relation to any company, corporation or partnership, another company, corporation or partnership:
(a) more than half of the voting rights or more than half of the issued share capital of which is beneficially owned, directly or indirectly, by the first-mentioned company or corporation or partnership;
(b) which is controlled, directly or indirectly, by the first-mentioned company or corporation or partnership; or
(c) which is a Subsidiary of another Subsidiary of the first-mentioned company, corporation or partnership.
“Tax” means any tax, levy, impost, duty or other charge or withholding of a similar nature (including any penalty or interest payable in connection with any failure to pay or any delay in paying any of the same).
“Trade Instruments” means any performance bonds, bid bonds, season ticket bonds, advance payment bonds or documentary letters of credit issued in respect of the obligations of the Issuer or any member of the Group arising in the ordinary course of trading.
“Transaction Costs” means all fees, costs and expenses, stamp, registration and other Taxes incurred by any member of the Group in connection with incurrence of any Financial Indebtedness (and including costs incurred in connection with the execution of hedging transactions).
“Transaction Security” means the Security created or expressed to be created in favour of the security agent appointed in such capacity under the Intercreditor Agreement pursuant to the Transaction Security Documents.”
“Transaction Security Documents” means:
(a) the Scots law governed pledge agreement to be executed by the Controlling Shareholder in respect of its shareholding in the Issuer; and
(b) the English law governed assignment agreement to be entered into by the Controlling Shareholder in respect of any intercompany loans advanced by the Controlling Shareholder to the Issuer from time to time.
“Treasury Transaction” means any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price.
This DEED POLL is delivered on the date stated at the beginning.
| EXECUTED as a DEED by STAGECOACH GROUP PLC in the presence of: Address: Occupation: | ) ) ) ) |
