European medium-term note programme (EMTN)
National Express Group plc has established a European medium-term note programme (EMTN) to provide a flexible means of issuing bonds in various currencies and maturities.
To view the latest EMTN prospectus see below:
Prospectus dated 11 October 2019
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Supplementary Prospectus dated 06 November 2019
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Supplementary Prospectus dated 08 November 2019
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In November 2019, National Express Group Plc issued a £250m Sterling bond, final terms of which are included below:
Final terms dated 18 November 2019
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In November 2016, National Express Group Plc issued a £400m Sterling bond, final terms of which are included below:
Final terms dated 09 November 2016
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The Group maintains a prudent approach to its financing and is committed to an investment grade credit rating. In 2019, Moody’s re-affirmed its investment grade rating of Baa2/stable while Fitch upgraded its investment grade credit rating to BBB/stable. In April 2020, and in response to the COVID-19 pandemic, both agencies re-affirmed these ratings with a change to negative outlook.
The Group’s key accounting debt ratios at 31 December 2019 were as follows:
Our bank covenant for gearing is not to exceed 3.5 times net debt to EBITDA – in 2019 the gearing ratio was 2.4 times EBITDA (31 Dec 2018: 2.3x)
Our bank covenant for the interest cover ratio is EBITDA not to be less than 3.5 times interest – in 2019 the interest cover ratio was 9.6 times interest (31 Dec 2018: 10.5x).
The Group’s covenants are set on a ‘frozen GAAP’ basis, removing the impact of IFRS 16 thus providing greater levels of headroom. Through 2019, the Group put in place a number of new facilities, further diversifying the sources of funding and providing additional liquidity until 2032, in a low interest rate environment. In October 2019, the Group issued a series of private placements totalling £414 million denominated in US Dollars, Sterling and Euros with maturities ranging from 2027 to 2032 and an average coupon of 1.92%, representing the Group’s debut issuance in the US private placement syndicated market. In November 2019, the Group issued a £250 million Sterling bond maturing in 2028 with a coupon of 2.375%.
At 31 December 2019, the Group had £2.7 billion of debt capital and committed facilities, comprising £875 million of Sterling bonds, a £211 million floating rate note, £175 million of bank loans, a £557 million revolving credit facility (RCF), private placements of £480 million and £407 million of leases. At 31 December 2019, the Group’s RCF was undrawn with £1.0 billion in cash and undrawn committed facilities available.
At 31 December 2019, the Group had foreign currency debt and swaps held as net investment hedges. These help mitigate volatility in the foreign currency translation of our overseas net assets. The Group also hedges its exposure to interest rate movements to maintain an appropriate balance between fixed and floating interest rates on borrowings. It has therefore entered into a series of swaps that have the effect of converting fixed rate debt to floating rate debt or vice versa. The net effect of these transactions was that, at 31 December 2019, the proportion of Group debt at floating rates was 24% (2018: 37%).
The Group’s principal defined benefit pension schemes are all in the UK. The combined deficit under IAS 19 at 31 December 2019 was £90.0 million (Dec 2018: £116.8m).
The two principal plans are the UK Group scheme, which closed to new accrual in 2011, and the West Midlands Bus plan (WM Bus), which remains open to accrual for existing active members only. The overall level of deficit contributions will be around £8 million in total per annum until 2020.
In October 2018, the Group Pension Scheme, through its trustee company, completed an insurance buy-in transaction with Rothesay Life to cover 100% of future benefits payable to members and the detailed transfer process is ongoing. The IAS 19 valuations for the principal schemes at 31 December 2019 were as follows:
- WM Bus: £99.1 million deficit (2018: £127.3m deficit)
- UK Group scheme: £14.2 million surplus (2018: £14.9m surplus)