Heathrow6.45% S Regulatory News (88BX)

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25 May 2017

Strong investor appetite for £275 million Heathrow bond

On 24 May 2017, Heathrow Finance plc ("Heathrow Finance") successfully placed a £275 million bond with a March 2027 maturity and a fixed coupon of 3.875%.

The transaction generated an initial order book in excess of £1.8 billion from over 200 investors, enabling the bond to be priced inside initial price expectations and with a coupon materially lower than the 5.75% coupon achieved on a similar maturity bond completed in October 2014. The transaction was unusual in attracting significant interest from institutions outside the UK, in continental Europe, once again underlining the benefit of Heathrow's ongoing global fixed income investor engagement programme and demonstrating the scale of investor interest in the Heathrow credit as the airport prepares the groundwork for its expansion programme.

The proceeds of the bond issue will enable Heathrow to complete the final stage of simplifying its debt financing arrangements so that the Heathrow group will no longer have debt subordinated to that held at Heathrow Finance and should provide a more liquid financing platform at Heathrow Finance level in the future.

Andrew Efiong, Heathrow's Director of Treasury, said: "We are very pleased with the continued strong support for Heathrow in the debt capital markets. This transaction successfully extends our maturity profile at this level of the capital structure and the mix of investors reflects continued market confidence in the Heathrow credit.

"As the UK's global gateway, Heathrow gives investors around the world a unique opportunity to invest in Britain's premier infrastructure asset. With a unique mix of premium and transfer passengers, as well as the airport's strength in handling over 30% of the UK's non-EU exports, Heathrow has the in-built resilience valued by fixed income investors."

Notes

Completion of this transaction means that Heathrow Finance has raised over £600 million in little more than the last 12 months in both bond and loan format. This financing has been supported by banks, institutional lenders and public bond investors from the UK, continental Europe, North America, Asia and Australia, demonstrating the global appeal of Heathrow to fixed income investors.

Consistent access to finance on this scale is enabled by Heathrow's multi-billion global debt financing platform, which has been critical to funding Heathrow's transformation over the last decade or so. And this platform will continue to be crucial in financing significant further investment at Heathrow in the years ahead, supported by the credibility of being the largest wholly privately financed airport globally.

Barclays, ING and JP Morgan acted as Joint Global Co-ordinators and Joint Bookrunners on this bond issue whilst Bank of America Merrill Lynch, Credit Suisse, ICBC and RBC Capital Markets acted as Joint Bookrunners.

For investor enquiries please contact Christelle Lubin, Investor Relations on +44 20 8745 0811

This announcement does not contain or constitute an offer to sell or issue or a solicitation of an offer to buy or subscribe for, securities to any person in Australia, Canada, Japan or the United States or in any jurisdiction in which such offer or solicitation is unlawful prior to registration or qualification under the relevant securities laws of any such jurisdiction and is not intended to provide the basis for any credit or other evaluation of the securities.

The notes may not be offered or sold in the United States or to, or for the account or benefit of U.S. Persons (as defined in Regulation S under the Securities Act) absent registration or exemption from registration under the U.S. Securities Act of 1933, as amended (the "Securities Act"). In particular, the notes have not been, and will not be, registered under the Securities Act, and may not be offered, sold, resold, transferred, delivered or distributed, directly or indirectly directly or indirectly within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state or local securities laws. Unless an exemption under the relevant securities laws is applicable, the notes may not be offered, sold, resold, transferred, delivered or distributed, directly or indirectly, in or into Australia, Canada, or Japan, or to, or for the account or benefit of, any national, resident or citizen of Australia, Canada, or Japan, or any other jurisdiction if to do so would breach any applicable law, or require registration thereof in such jurisdiction. No public offering of the notes is being made in the United States. In addition, any relevant securities registration or other clearances under the applicable securities laws have not been and will not be made or obtained with or from the relevant authorities in Australia, Canada, Japan or any other jurisdiction except the United Kingdom.

This communication is not being distributed to or directed at persons other than persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their businesses or who it is reasonable to expect will acquire, hold, manage or dispose of investments (as principal or agent) for the purposes of their businesses where the issue of the notes would otherwise constitute a contravention of section 19 of the Financial Services and Markets Act 2000 ("FSMA") by us. In addition, no person may communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of FSMA) received by it in connection with the issue or sale of the notes other than in circumstances in which section 21(1) of FSMA does not apply to us.