Heathrow6.45% S Regulatory News (88BX)

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26th July 2016

Strong investor appetite for £400 million Heathrow bond

Heathrow has today successfully placed a £400 million Class A bond with a 2049 maturity and a fixed annual coupon of 2.75%. The latest bond takes the amount raised by Heathrow close to £1.5 billion globally in 2016 and demonstrates the scale of investor interest in the Heathrow credit as the airport awaits an imminent decision from Government on its expansion plans.

Heathrow expects the proceeds of the bond to be used for general corporate purposes, including the repayment of existing debt maturing in Q4 2016 and Q1 2017. The completion of this transaction further strengthens Heathrow's liquidity position, now extended to July 2019, while extending the duration of Heathrow's debt portfolio.

Heathrow received significant support for the transaction, with an order book of over £1.25 billion from more than 100 institutions globally. 

By far the largest wholly-privately financed airport in the world, Heathrow continues to successfully raise debt globally across six currencies from a well-established debt funding platform. In the last five years alone, Heathrow has raised £10 billion of debt financing while reducing pricing to passengers and achieving record levels of service, all underpinning the transformation of Heathrow into western Europe's best airport.

Andrew Efiong, Heathrow's Director of Treasury, said:

"We are delighted with the level of ongoing investor interest in Heathrow. This transaction is one of the longest-dated public bonds we have issued in the sterling market and reflects the confidence of global bond markets in Heathrow's market position.

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 26% of the UK's exports, Heathrow has the in-built resilience valued by fixed income investors.

Given the scale and breadth of investor support globally, we are confident that with a positive decision from Government in the Autumn, support for financing an expanded Heathrow will remain high."

Last year, the Government's independent Airports Commission gave a clear recommendation for a third runway at Heathrow following a £20 million two-and-a-half year study into runway capacity in the south east of England. The Commission recommended tough conditions for expansion - including restrictions on night flights, controls on air pollution and noise - which Heathrow accepted in May 2016. Heathrow has full confidence that expansion can be delivered in accordance with the Commission's recommendations.

Expansion of Heathrow is backed by business, trade unions, cross-party politicians and airlines as the best solution to Britain's aviation capacity crunch. Supporters include the CBI, FSB, chambers of commerce across the country, Unite, the GMB, 38 British airports and airlines such as easyJet, which plans to operate from an expanded Heathrow. A large proportion of the local community also backs Heathrow. Recent polling by ComRes also revealed that two thirds of MPs think greenlighting Heathrow expansion will strengthen Britain's economy.

For investor enquiries please contact Andrew Efiong on +44 20 8745 2742

This announcement does not contain or constitute an offer of, or the solicitation of an offer to buy or subscribe for, securities to any person in the United States or in any jurisdiction in which such offer or solicitation is unlawful. The securities referred to herein may not be offered or sold in the United States absent registration under the US Securities Act of 1933, as amended (the "Securities Act") except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. The offer and sale of the securities referred to herein has not been and will not be registered under the Securities Act. There will be no public offer of the securities in the United States.