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FirstGroup signs £300m sustainability-linked facility
31st Aug 2021 07:38
(Sharecast News) - FirstGroup has signed a new £300m sustainability-linked revolving credit facility with a group of its relationship banks, it announced on Tuesday.
The FTSE 250 passenger transport company said the facility had an initial maturity of four years, with the option to extend by a further year subject to bank consent.
It said the covenants had been structured to reflect the future shape of the group, and to give "substantial headroom" against them.
The initial interest rate would be the Bank of England's Sterling Overnight Index Average (SONIA) interest rate plus 1%, and would thereafter vary according to two measures.
FirstGroup said the first of those was the group's leverage, and the second was its performance against two sustainability key performance indicators, being the level of Scope 1, 2 and 3 emissions per million pounds of revenue from its First Bus and First Rail operations, and the relative growth of its zero-emission bus fleet in the UK.
The new facility replaced all of the group's former committed syndicated and bilateral banking facilities, which were recently repaid and cancelled.
FirstGroup said it had recently also repaid the UK government's Covid Corporate Financing Facility (CCFF) commercial paper, as well as all of its private placement debt, and would shortly give notice to the holders of its £325m 5.25% bonds due November 2022 that it would exercise its right to repay them early.
The group's £200m 6.875% bonds due September 2024 would not be affected, and remained outstanding.
As it had previously outlined, the company was expecting to have pro forma adjusted pre-IFRS 16 net debt of around £100m following all of the funds flows related to the First Student and First Transit transaction and the use of those proceeds.
"The new sustainability-linked revolving credit facility and repayment of our CCFF commercial paper, 2022 bonds, and private placement notes completes the reorganisation of our debt arrangements following the recent sale of our North American contract businesses," said chief financial officer Ryan Mangold.
"This has been an important step that complements the rationalisation of the group, and ensures that our debt arrangements are fit-for-purpose for our future development.
"We are pleased with the support shown by our relationship banks for our new facility, which has a clear link to our decarbonisation plans, including our commitment to operating a zero emission First Bus fleet by 2035."
At 0807 BST, shares in FirstGroup were down 0.33% at 89.8p.
The FTSE 250 passenger transport company said the facility had an initial maturity of four years, with the option to extend by a further year subject to bank consent.
It said the covenants had been structured to reflect the future shape of the group, and to give "substantial headroom" against them.
The initial interest rate would be the Bank of England's Sterling Overnight Index Average (SONIA) interest rate plus 1%, and would thereafter vary according to two measures.
FirstGroup said the first of those was the group's leverage, and the second was its performance against two sustainability key performance indicators, being the level of Scope 1, 2 and 3 emissions per million pounds of revenue from its First Bus and First Rail operations, and the relative growth of its zero-emission bus fleet in the UK.
The new facility replaced all of the group's former committed syndicated and bilateral banking facilities, which were recently repaid and cancelled.
FirstGroup said it had recently also repaid the UK government's Covid Corporate Financing Facility (CCFF) commercial paper, as well as all of its private placement debt, and would shortly give notice to the holders of its £325m 5.25% bonds due November 2022 that it would exercise its right to repay them early.
The group's £200m 6.875% bonds due September 2024 would not be affected, and remained outstanding.
As it had previously outlined, the company was expecting to have pro forma adjusted pre-IFRS 16 net debt of around £100m following all of the funds flows related to the First Student and First Transit transaction and the use of those proceeds.
"The new sustainability-linked revolving credit facility and repayment of our CCFF commercial paper, 2022 bonds, and private placement notes completes the reorganisation of our debt arrangements following the recent sale of our North American contract businesses," said chief financial officer Ryan Mangold.
"This has been an important step that complements the rationalisation of the group, and ensures that our debt arrangements are fit-for-purpose for our future development.
"We are pleased with the support shown by our relationship banks for our new facility, which has a clear link to our decarbonisation plans, including our commitment to operating a zero emission First Bus fleet by 2035."
At 0807 BST, shares in FirstGroup were down 0.33% at 89.8p.