Bonds quoted in Luxembourg

 

Size : 398 millions

Minimum amount: 20K

Following the completion of the financial restructuring operations, as described in particular in Section 5 of this Reference Document, the Group’s residual gross debt was reduced to €398 million, i.e. a net debt([1]) as at 31 December 2017 of €332 million, showing a financial leverage of 1.7x at 31 December 2017, and redeveloped in the form of a bond issue for the amount of €397,834,585 (the “Bonds”) whose settlement-delivery took place on 14 March 2017, reserved for creditors under the Credit Agreement, and whose main terms are as follows:

 

Interest:

·       interest calculation: margin plus EURIBOR rate (EURIBOR being defined to include a minimum rate of 1%) 3 months, payable quarterly in arrears;
·       late payment interest: 1% increase in the applicable interest rate.
·       Margin: percentage per year based on the level of the consolidated net leverage ratio (consolidated net debt/consolidated EBITDA) at the end of the most recent six-month period (Accounting Period), such as indicated in the table below (it being specified that the initial margin will be calculated on a pro forma basis of the restructuring operations):

·      

Maturity date: 15 March 2022.

 Listing: included on the official listing of the Luxembourg Stock Exchange and admission to trading on the Euro MTF market.

Early redemption or buy-back:

·       the SoLocal Group may, at any time and in multiple instalments, redeem all or part of the Bonds at a redemption price equal to 100% of the principal amount plus accrued and unpaid interest;
·       in addition, the Bonds will be subject to mandatory early redemption (subject to certain exceptions) in whole or in part, in case of certain events occurring, such as a change of control, a disposal of assets (Assets Sale), or receipt of Net Debt Proceeds or Net Receivables Proceeds. Mandatory prepayments are also expected from funds derived from a percentage of excess cash flows, based on the level of the Company’s Consolidated Net Leverage Ratio.

Financial commitments:

·       the consolidated net leverage/Consolidated Leverage/ Consolidated EBITDA ratio should be less than 3.5: 1;
·       the interest coverage ratio (Consolidated EBITDA/Consolidated Net Interest Expense) should be greater than 3.0: 1; and
·       (i) beginning in 2017 and (ii) in any subsequent year if the Consolidated Net Leverage Ratio exceeds, on 31 December of the previous year, 1.5:1, capital expenditure (excluding growth transactions) (Capital Expenditure) relating to the SoLocal Group and subsidiaries is limited to 10% of consolidated revenue of the SoLocal Group and its subsidiaries.
·       The terms of the Bonds also contain certain undertakings not to conduct certain actions, prohibiting the SoLocal Group and its Subsidiaries, subject to certain exceptions from, in particular:
·       bearing additional financial debt;
·       granting sureties;
·       paying dividends or making distributions to shareholders; as an exception, the payment of dividends or distributions to shareholders is permitted if the Consolidated Net Leverage Ratio does not exceed 1.0: 1.
The restrictions contained in the terms of the Bonds and described above could affect the Group’s ability to carry out its activities and limit its ability to react to market conditions or to seize commercial opportunities that may arise. For example, these restrictions could affect the Group’s ability to finance the investments of its activities, restructure its organisational structure or finance its capital needs. In addition, the Group’s ability to comply with these covenants could be affected by events beyond its control, such as economic, financial and industrial conditions. A breach by the Group of its commitments or restrictions may result in default under the above-mentioned agreements.
In the event of a default that is not remedied or waived, the holders of the Bonds may require all outstanding amounts to become immediately payable. This could activate the cross default clauses of other Group loans. This type of event could have a material adverse effect for the Group, leading to insolvency or liquidation of the Group.
Moreover, the Group may not be able to refinance its indebtedness or obtain additional financing on satisfactory terms.