MAG issues inaugural bond in capital markets
14th February 2014
MAG, the operator of the airports of Manchester, London Stansted, East Midlands and Bournemouth, has issued its inaugural bond in the UK capital markets.
The Group issued a £450m, 20-year bond, with an annual coupon of 4.75%. The issuance was extremely well received in the market with an order book that was four times oversubscribed at around £2bn.
The proceeds of the bond will be used to repay bank debt which was put in place to purchase London Stansted in February 2013.The bond has a senior secured structure similar to those of other UK airport companies.
With long-term assets as part of the airport business, the long-term bond will enable the airport group to continue its growth pattern as it looks to provide more routes and services and grow its existing passenger base of 42m passengers across the four airports.
MAG took on new shareholders following the purchase of Stansted in the form of IFM Investors, the investment fund, to help make its £1.5bn acquisition. IFM and Manchester City Council now own 35.5% of MAG, while the remaining nine councils of Greater Manchester share the remaining 29%.
Neil Thompson, Chief Financial Officer for MAG, said: “The strength of the bond is testament to the strong performance of the Group and demonstrates the confidence of a wide number of UK and international blue-chip investors in the MAG growth strategy. The funds place the Group on an extremely sound financial footing with funding now in place for the long term.”
MAG mandated RBS as arranger and debt adviser on the transaction, and Bank of America Merrill Lynch, Barclays, HSBC and RBS as book runners. Besides the four banks that led the bond, MAG’s bank syndicate currently comprises Bank of Tokyo-Mitsubishi UFJ, BNP Paribas, Canadian Imperial Bank of Commerce, Commonwealth Bank of Australia, Lloyds, National Australia Bank, Prudential Capital of the UK and Royal Bank of Canada.
Andrew Paulson, Managing Director of Debt Capital Markets at RBS, who advised MAG on the acquisition and the financing, said: “MAG’s debut in the bond markets was very well received by investors. Buyers of the bond included insurance companies, pension funds and asset managers from the UK, Europe and Asia. Investors were attracted to MAG’s strong business profile and successful track record of asset stewardship. Our London and Manchester offices have been working with MAG’s management team for nearly two years to deliver today’s terrific outcome for the company”.
MAG has also launched a specialist investor relations site as part of the process. It contains a wealth of information on the Group, including the prospectus and presentation that were provided to investors. More information is available at: http://www.magworld.co.uk/investors
For more information, contact the MAG press office on 0161 489 2700 or via email at firstname.lastname@example.org
Published on: 14/02/2014 14:20:05