National Grid Plans To Put Cash Toward Bond Buybacks

22nd Jul 2010 17:04

LONDON (Dow Jones)--National Grid (NG.LN) plans to use part of its cash pile to buy back up to EUR450 million of its shorter-dated bonds, as "the group is very long cash at the moment after a recent rights issue, so retiring these bonds makes efficient use of our cash," a company spokesperson said Thursday. National Grid announced Wednesday that it would buy back three of its bonds, dated 2014, 2012 and 2011. "This buyback allows National Grid to partly reduce the repayment burden it faces in the coming five years," ING N.V. analyst Maureen Schuller said, adding the bonds being repurchased mature in the three years during which the company faces its heaviest redemptions. National Grid's capital investment plan is forecast to reach around GBP22 billion over the next five years, up from GBP14 billion in the previous five-year period. At the moment there is no plan to issue a new bond, the spokesperson said, noting the company raised GBP3.2 million in June via a rights issue. However, ING's Schuller said "we expect the bond repurchase to be followed by new bond issuance further out the curve considering National Grid's sizeable capital investment plan of GBP22 billion for the coming five years." BNP Paribas S.A. and HSBC Holdings PLC are lead managers of the buyback offer. The original bonds sold were GBP414 million of a 6.125% 2014 bond, EUR750 million of a 2012 floating rate note, and EUR750 million of a 6.125% guaranteed bond. The offer is expected to expire July 29. -By Art Patnaude, Dow Jones Newswires; +44 (0) 207 842 9259; [email protected] (END) Dow Jones Newswires July 22, 2010 12:04 ET (16:04 GMT)