51VZ Cov&rug 3.246%

TIDM51VZ

RNS Number : 5915K

Coventry & Rugby Hospital Co PLC

02 September 2021

ANNOUNCEMENT

THE COVENTRY AND RUGBY HOSPITAL COMPANY PLC - RNS ANNOUNCEMENT

THE COVENTRY AND RUGBY HOSPITAL COMPANY PLC (the "Issuer")

GBP407,239,000

3.246 per cent. Index Linked guaranteed secured bonds due 30 June 2040

(including GBP35,000,000 variation bonds)

(with authority to issue further bonds)

unconditionally and irrevocably guaranteed as to scheduled payments of principal and interest pursuant to a financial guarantee policy

issued by MBIA ASSURANCE S.A. (succeeded by Assured Guaranty (UK) Ltd)

Warning Notices and Service Failure Points

In reference to the Project Agreement between University Hospitals Coventry and Warwickshire National Health Service Trust, Coventry Primary Care Trust and The Coventry and Rugby Hospital Company Plc, dated 3 December 2002, as amended from time to time and the Collateral Deed between The Coventry and Rugby Hospital Company Plc, The Coventry and Rugby Hospital Company (Holdings) Limited, Mourant & Co. Capital Trustees Limited (succeeded by Apex Corporate Trustees (UK) Ltd) (As Security Trustee and Bond Trustee ) and MBIA Assurance S.A. (succeeded by Assured Guaranty (UK) Ltd), dated 3 December 2002. Unless otherwise defined herein, capitalised terms have the same meaning as given to them in the Project Agreement and Collateral Deed.

On 12 August 2021 the Coventry and Warwickshire Partnership Trust ("CWPT") issued the following Warning Notices in respect of the accumulation of Service Failure Points ("SFPs") in the six-month rolling period from December 20 to May 21 causing breaches to thresholds set out in the Project Agreement in relation to alleged service and maintenance failings:

   1.   A Warning Notice in respect of the Maintenance Ad Hoc Service; 
   2.   A Second Warning Notice in respect of the Maintenance Ad Hoc Service; 
   3.   A Warning Notice in respect of the Maintenance PPM Service; 
   4.   A Second Warning Notice in respect of the Maintenance PPM Service; 
   5.   A Warning Notice in respect of the Facilities Management Service; and 
   6.   A Second Warning Notice in respect of the Facilities Management Service. 

In addition, on 11 November 2020 University Hospital Coventry and Warwickshire Trust issued two warning notices in respect of the accumulation of SFPs. On 24 November 2020 CWPT awarded SFPs that breach thresholds set out in the Project Agreement. On 30 November 2020 CWPT issued warning notices in relation to these threshold breaches.

The award of these Warning Notices constitutes a Trigger Event under the Collateral Deed. The level of points awarded by CWPT in this period also constitutes an Event of Default under the Collateral Deed.

As the Issuer has received two or more Warning Notices in respect of these services in the last 12 months CWPT has also written to the Issuer expressing that it intends to exercise its right under the Project Agreement to increase monitoring of these services.

The Maintenance Ad Hoc Service and the Maintenance PPM service are provided by the Hard Service Provider, Vinci Facilities ("Vinci"). The award of these SFPs, and hence the Warning Notices and increased monitoring, is disputed by Vinci. The matter has been referred to the Dispute Resolution Procedure under the Project Agreement.

The occurrence of Events of Default provides the Credit Provider with certain rights in respect of the Project. As at the date of this announcement, the Credit Provider has reserved its rights to exercise any of the rights available to them beyond placing the Project into distribution lock-up and increasing its monitoring of the Project.

Financial Obligations

CWPT has made deductions from its Unitary Charge payments in relation to these alleged service and maintenance failings. However, the Issuer fulfilled its Scheduled Senior Debt Service obligations on 30 June 2021, without the need to utilise cash standing to the credit of available reserve bank accounts. The Issuer expects to be in a position to meet its next Scheduled Senior Debt Service obligations, due on 31 December 2021, as well as all future Scheduled Senior Debt Service obligations, without recourse to such available reserve bank accounts.

Enquiries

The Issuer

The Coventry and Rugby Hospital Company Plc

8 White Oak Square

Swanley

Kent

BR8 7AG

Attention: Jacques Mostert, Project Co. Representative.

Important information

This announcement is not a prospectus, is distributed for information purposes only and does not constitute or form part of any offer or invitation to issue, acquire or dispose of any securities in any jurisdiction. Nothing in this document is intended to amount to an invitation or inducement to engage in investment activity. Nothing in this document amounts to the giving of advice. If you are in any doubt as to the action you should take, you should consult a professional adviser.

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END

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