Published on 11/02/2010

BAA (SH) plc, the holding company for BAA (SP) Limited and its subsidiaries that own BAA’s London airports Heathrow and Stansted, today announced that it has successfully placed a £325m bond issue to complete the refinancing of its existing debt facility.

The sterling-denominated notes will have a fixed interest coupon of 7.125 per cent, at the tight end of guidance, and will mature in March 2017.

Along with the new BAA (SH) loan facility announced on 26 October 2010, which will be reduced to £175m from £250m so that total proceeds remain at £500m, the bond proceeds will be used to refinance the remaining £465.8 million of BAA (SH)’s existing subordinated debt facility due in 2011. The new financings will extend the Group’s debt maturity profile.

Fred Maroudas, BAA’s Director of Treasury, said: “This is the first time a UK regulated business has been able to access finance for its holding company through the bond markets. Our innovative approach has been well received by the market, with the issue being significantly oversubscribed and upsized from the original £250 million to £325 million with orders from a broad range of over 150 existing and new investors spread equally between UK and non-UK. We are particularly pleased by our continuing ability to attract a wide variety of new investors.

“It marks the end of a very successful 12 months for BAA in the financing markets, during which we have refinanced approximately £3 billion through a range of markets. Investors’ confidence in our financial position gives us a strong platform to enhance the service we offer to passengers.”

In the last 12 months BAA’s refinancing has been as follows:

• November 2009: £700m senior bond and £235m index-linked bond.
• August 2010: £625m junior loan facility.
• September 2010: £400m junior bond.
• October 2010: €500m bond and £250m holding company loan.

Morgan Stanley and Royal Bank of Scotland acted as joint global coordinators and joint bookrunners and Barclays Capital, BNP Paribas, ING and Santander acted as joint bookrunners in relation to this bond issue.

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