Commentary & Deal Flow

Rolls-Royce plc (ROLLS), leading provider of integrated power systems for use in the air, on land and at sea, rated Ba3/BB-/BB+ (M/S/F) has mandated BNPP, Citi, GS as Global Coordinators and Joint Bookrunners to arrange on its behalf a series of virtual fixed income investor meetings in Europe and the US commencing on Tuesday 6th October, 2020. An at least GBP1bn equivalent offering of medium-term senior unsecured notes targeting maturities of 2026 (long 5 year) and 2027 (straight 7 year) and denominated in EUR, GBP and/or USD will follow, subject to market conditions. Proceeds, together with those of the announced rights issue, will be used for enhancing liquidity headroom, for general corporate purposes and to repay upcoming debt maturities as they fall due, including the $500m 2.375% notes due October 2020, (ii) the EUR750m 2.125% notes due June 2021 and (iii) the GBP300m Commercial Paper due March 2021. The new notes will be NCL Senior Unsecured, in 144A / Reg S format and without SEC registration rights. The potential bond offering forms part of the recapitalization package announced on 1 October 2020. 

BNPP/GS will be coordinating European logistics and Citi will be coordinating US logistics. Active Bookrunners: BNPP (EUR B&D)/Citi (USD B&D)/GS (GBP B&D).

Roadshow schedule: Tue 6th Oct: (group investor call and 1x1s and small groups); Wed 7th Oct: (1x1s and small groups); Thu 8th Oct: (1x1s and small groups); Fri 9th Oct: (1x1s and small groups).

Also raising an approx GBP2bn 10 for 3 rights issue for its ordinary shares (6,436,651,043 shares at 32 pence), a GBP1bn new 2y term loan, support in principle from UK Export Finance for an extension of its existing 80% guarantee to back a potential loan increase of up to GBP1bn to its existing GBP 5y term loan. The rights issue is subject to shareholder approval at the general meeting to be held Oct 27, with settlement Nov 11.