International Financing Review March 21 2020 65LOANS EMEA4HEûlNANCINGûWASûARRANGEDûINûûVIAû
Allied Irish Banks, Barclays, HSBC, Lloyds
and Royal Bank of Scotland.
The unsecured RCF paid 140bp over Libor
in 2018 for a leverage ratio of less than 1.0
times and a commitment fee of 35% of the
applicable margin on undrawn funds.NATIONAL EXPRESS TO BOOST LIQUIDITYTransport group NATIONAL EXPRESS is in talks
with its banking syndicate to secure additional
short-term facilities in case market conditions
worsen as a result of the coronavirus crisis.
The company, which is experiencing
different impacts from the outbreak across
its diverse portfolio, has moved to reduce its
COSTûBASEûANDûPROTECTûCASHmOW
Many of the company’s contracts provide
protections and minimum income
guarantees that will support its cost base in
the coming months while the company is
working with contracting authorities and
local governments to maintain some
payments during the disruption.
4HEûCOMPANYûSAIDûITûHADûSIGNIlCANTû
liquidity headroom in its bank facilities,including a £557m revolving credit facility
that was undrawn at the end of 2019.CREST NICHOLSON TO FULLY DRAWHousebuilder CREST NICHOLSON will fully draw
down its £250m revolving credit facility as the
company seeks to protect its cash position in
the face of the coronavirus outbreak.
The drawdown will give Crest £185m of
available cash.
The spread of the virus is expected to have
AûSIGNIlCANTûIMPACTûONûVISITORûLEVELS û
production capability and trading
performance over an unclear timeline.
#RESTûHASûSCRAPPEDûITSûlNALûDIVIDENDûANDû
HASûSUSPENDEDûALLûlNANCIALûGUIDANCEûUNTILû
the severity and duration of the coronavirus
impact becomes clearer.
The RCF matures in June 2024 and pays a
margin of 215bp over three-month Libor.PAYPOINT DRAWS DOWN RCFRetail services platform PAYPOINT has fully
drawn down its £70m revolving credit
facility to ensure it can withstand asustained period of disruption to trading
from the coronavirus outbreak.
4HEûREVOLVERûISûPARTûOFûAûaMûlNANCINGû
facility that matures in March 2023 and also
includes a £20m accordion option.
PayPoint has moved quickly to an
operating model that combines remote
WORKINGûANDûSOMEûESSENTIALûOFlCE
BASEDû
activity to minimise disruption and support
clients and its retailer network.
But government measures taken to give
lNANCIALûSUPPORTûTOû5+ûHOUSEHOLDS ûSUCHûASû
waivers on utility bill payments, could have
potentially adverse consequences on
PayPoint’s bill payment volumes.
Additional dividend payments have been
suspended and a review of short-term cost
reduction measures will be undertaken
across the business.
PayPoint offers retail platform services to
convenience retailers in the UK and
Romania as well as bill payment services.JSG AIMS TO INCREASE RCF$RYûCLEANINGûANDûWORKWEARûlRMûJOHNSON
SERVICE GROUP has begun talks with its banksRetailers assess liquidity as virus closes stores
EUROPE Next in talks with lenders, AB Foods and Kingfisher reassure investorsCompanies bearing the financial impact
from the coronavirus outbreak such as AB
FOODS, operator of clothes retailer Primark,
home improvement retailer KINGFISHER and
fashion retailer NEXT have assessed their
liquidity as they try to actively manage the
situation.
Next is in advanced talks with its banks to
increase its credit facilities by £200m to provide
further flexibility and headroom as it faces a
significant downturn in sales for the duration of
the coronavirus pandemic.
Next has conducted stress tests and found
that it could comfortably sustain the loss of more
than £1bn of annual full price sales, without
exceeding its bond and bank facilities.
It expects to have the increased facilities in
place within the next month.
The company agreed a £450m five-year
sustainability-linked revolving credit facility in
November 2019, replacing and combining two
existing facilities that were due to mature in
2020 and 2021.
Next said that under a scenario where full-
price sales fall by 20%, there is a risk that it
could breach its bank covenants, an outcome
that would be caused by a temporary reduction
in profits. However, peak borrowings would
remain comfortably within the company’s total
facilities.The company said it has had positive
discussions with all its lending banks and early
indications suggest a covenant waiver to the end
of January 2021 could be agreed.
The RCF was arranged by coordinator
Barclays alongside BNP Paribas, HSBC and
NatWest as bookrunning mandated lead
arrangers. Deutsche Bank, Goldman Sachs,
Standard Chartered Bank and UBS also
participated.CLOSED DOORS
AB Foods said that its stores in France, Spain
and Austria are closed until the respective
governments permit them to re-open. The
closed stores generate 30% of Primark’s sales.
The company had expected sales of £190m
from the closed stores over the next four weeks.
The remainder of its estate, including the UK
representing 41% of sales, has seen like-for-like
sales declines over the last two weeks, which has
accelerated over the past few days as a result of
reduced footfall.
The company does not expect to significantly
mitigate the effect of the lost sales.
AB Foods said that it has not seen a material
impact in its sugar, grocery, ingredients and
agriculture businesses.
The company has substantial cash liquidity
with some £800m of net cash with significantundrawn bank facilities, including a £1.2bn
revolving credit facility that is due to mature in
July 2021.
Meanwhile, all 221 of Kingfisher’s Castorama
and Brico Depot stores in France have closed
until April 14.
In addition, all 28 of its stores in Spain
have closed until March 29 following the
government’s declaration of a two-week state of
emergency.
“While significant uncertainty exists around
the impact of Covid-19, we are taking immediate
and significant measures to contain our costs
and protect our financial position. We have a
strong balance sheet, with significant liquidity
headroom and limited financial debt,” Thierry
Garnier, Kingfisher’s CEO, said.
Kingfisher has access to two undrawn RCFs
totalling £775m comprising a £550m RCF
maturing in August 2022 and a £225m RCF
maturing in March 2022.
Kingfisher can draw down on these facilities
for periods of one, two, three, four, five or
six months or any other agreed period until
maturity.
The company said that as of the end of
January it had significant headroom in its
interest cover covenant and has a total if
£1.025bn of liquidity immediately available.
Alasdair Reilly9 IFR Loans 2325 p 55 - XX.indd 65 20 / 03 / 2020 19 : 00 : 40