Indicative Term Sheet
ISIN: NO [●]
FRN Color Group AS Senior Unsecured Guaranteed Open Bond Issue 2015/2020
(the “Bonds” or the “Bond Issue”)
Settlement date: Expected to be 2 June 2015
Issuer:
Color Group AS (org. number 958 815 018).
Guarantor:
Color Line AS (org. number 970 903 968).
Group:
Means the Issuer and its Subsidiaries, and a “Group Company” means the Issuer or
any of its Subsidiaries.
Currency:
NOK.
Borrowing Limit:
NOK 700 million.
First Tranche:
Minimum NOK 500 million.
Coupon rate:
3 months NIBOR + 4.85% p.a., quarterly interest payments.
Settlement Date:
Expected to be 2 June 2015. Notice is expected to be given to subscribers minimum
two banking days prior to Settlement Date.
Maturity Date:
2 June 2020 (5 years after Settlement Date).
First interest
payment day:
2 June 2015 (3 months after Settlement Date).
Last interest payment
day:
Maturity Date.
Interest Payments:
Interest will start to accrue on Settlement Date and shall be payable quarterly in arrears
on the interest payment day in March, June, September and December each year. Daycount fraction for the coupon is “act/360”, business day convention is “modified
following” and business day is “Oslo”.
Issue Price:
100.00 (par).
Amortization:
The Bonds shall be repaid in full at the Maturity Date at 100% of par value (plus
accrued interest on redeemed Bonds).
Nominal value:
The Bonds will have a nominal value of NOK 1,000,000 each. Minimum subscription
and allotment amount shall be NOK 1,000,000.
Status of the Bonds:
The Bonds shall be senior debt, and rank at least pari passu with all other senior
obligations of the Issuer other than obligations which are mandatory preferred by law.
The Bonds shall rank ahead of subordinated capital. The Bonds will be secured by the
Guarantee.
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Guarantee:
An unconditional and irrevocable guarantee (Norwegian: Selvskyldnerkausjon) from
the Guarantor securing the Issuer’s obligations under the Bond Agreement and any
other Finance Documents, including interest, cost and expenses.
Purpose of the
Bonds:
Refinancing of existing debt (including buy-back of COLG08 PRO), and general
corporate purposes.
General covenants
applicable to the
Issuer:
During the term of the Bonds, the Issuer shall (unless the Bond Trustee or the
Bondholders’ meeting (as the case may be) in writing has agreed to otherwise) comply
with the following general covenants:
a) Mergers: The Issuer shall not carry out any merger or other business combination
or corporate reorganization involving a consolidation of the assets and obligations of
the Issuer or any other Group Company with any other companies or entities if such
transaction would have a Material Adverse Effect.
b) De-mergers:
The Issuer shall not carry out any de-merger or other corporate reorganization
involving splitting the Issuer or any other Group Company into two or more separate
companies or entities, if such transaction would have a Material Adverse Effect.
c) Continuation of business:
The Issuer shall not cease to carry on its business. The Issuer shall procure that no
material change is made to the general nature or scope of the business of the Group
from that carried on at the date of the Bond Agreement, or as contemplated by the
Bond Agreement.
d) Disposal of business:
The Issuer shall not sell or otherwise dispose of all or a substantial part of its assets or
operations, unless: (i) the transaction is carried out at fair market value, on terms and
conditions customary for such transactions; and (ii) such transaction would not have a
Material Adverse Effect.
e) Arm’s length transaction:
The Issuer shall not, and the Issuer shall ensure that no other Group Company shall
enter into any transaction with any person except on arm’s length and for fair market
value.
f) Corporate status:
The Issuer shall not change its type of organization (other than to a public limited
company) or jurisdiction of incorporation.
g) Compliance with laws:
The Issuer shall, and shall ensure that all other Group Companies shall, carry on its
business in accordance with acknowledged, careful and sound practices in all material
aspects and comply in all material respects with all laws and regulations it or they may
be subject to from time to time.
h) Reporting:
The Issuer shall of its own accord make management and financial reports available to
the Bond Trustee (or via the distribution system at Oslo Stock Exchange as long as the
Issuer’s bonds are listed) and on its web pages for public distribution not later than 120
days after the end of the financial year (results as per 31 December) and not later than
60 days after the end of the relevant half-year period (results as per 30 June).
Special covenants
applicable to the
Issuer:
a) Negative Pledge
The Issuer shall ensure that neither the Issuer nor any member of the Group creates or
permits to subsist any mortgage, charge, pledge, lien or any other form of
encumbrance upon its or any of its subsidiaries’ existing or future assets or grant any
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guarantees or indemnity for an amount exceeding 60% of the Group’s consolidated
Total Assets.
“Total Assets” means, on any date, the aggregate book value (on a consolidated basis)
of those assets which according to IFRS should be included as assets in the balance
sheet, as set out in the then most recent financial statements (or, as applicable, the most
recent semi-annual accounts) of the Issuer.
b) Minimum Book Equity
The Issuer shall, on a consolidated basis for the Group, maintain a Book Equity of
minimum NOK 1,000 million. The Issuer undertakes to be in compliance with this
financial covenant at all times, such compliance to be measured on each semiannual
date.
“Book Equity” means the aggregate book value (on a consolidated basis) of the
Group’s total equity treated as equity in accordance with IFRS, as set out in the then
most recent financial statements (or, as applicable, the most recent semi-annual
accounts) of the Issuer.
Material Adverse
Effect:
Means an event or circumstance which has a material adverse effect on: (a) the
business, financial condition or operations of the Issuer and/or the Group as a whole,
(b) the Issuer’s ability to perform and comply with its obligations under the Bond
Agreement; or (c) the validity or enforceability of the Bond Agreement or any security
documents (including the Guarantee) (if applicable).
Subsidiary:
Means a company over which another company has Decisive Influence.
Decisive Influence:
Means a person having, as a result of an agreement or through the ownership of shares
or interests in another person:
(a)
a majority of the voting rights in that other person; or
(b)
a right to elect or remove a majority of the members of the board of directors
of that other person.
When determining the relevant person’s number of voting rights in the other person or
the right to elect and remove members of the board of directors, rights held by the
parent company of the relevant person and the parent company’s Subsidiaries shall be
included.
Event of Default:
The Bond Agreement shall include standard event of default provisions, including
cross default on any financial indebtedness of any Group Company subject to a carveout of the highest of NOK 10 million or 1% of the Issuer’s book equity (latest audited
accounts).
Approvals:
The Bonds have been issued in accordance with the Issuer’s Board approval dated 21
May 2015.
Issuer’s ownership of
bonds:
The Issuer has the right to acquire and own the Bonds. Such Bonds may at the Issuer’s
discretion be retained by the Issuer, sold and discharged against the remaining Bonds.
Joint Lead
Managers:
Arctic Securities AS, Haakon VII’s gate 5, NO-0161 Oslo, Norway;
Danske Bank Markets, Norwegian Branch, Bryggetorget 4, NO-0107 Oslo, Norway;
DNB Bank ASA, DNB Markets, Dronning Eufemias gate 30, NO-0191 Oslo, Norway.
Bond Trustee:
Nordic Trustee ASA, Postboks 1470 Vika, NO-0116 Oslo, Norway
Registration:
The Norwegian Central Securities Depository (“VPS”). Principal and interest accrued
will be credited the bondholders through VPS.
Taxation:
The Issuer shall pay any stamp duty and other public fees in connection with the
Bonds, but not in respect of trading in the secondary market (except to the extent
required by applicable laws), and shall deduct at source any applicable withholding tax
payable pursuant to law. Tax deduction and withholding tax shall be subject to
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standard gross-up and call provisions.
Bond Agreement:
The bond agreement governing the Bond Issue (the "Bond Agreement") will be
entered into by the Issuer and the Bond Trustee (acting as the Bondholders’
representative) and shall, save for the amendments herein, be based on the provisions
in COLG11. The Bond Agreement will regulate the bondholders’ rights and
obligations with respect to the Bonds. If any discrepancy should occur between this
Term Sheet and the Bond Agreement, then the Bond Agreement shall prevail.
The Bond Agreement will specify that all Bond transfers shall be subject to the terms
thereof, and the Bond Trustee and all Bond transferees shall, when acquiring the
Bonds, be deemed to have accepted the terms of the Bond Agreement, which specifies
that all such transferees shall automatically become parties to the Bond Agreement
upon completed transfer having been registered in the VPS, without any further action
required to be taken or formalities to be complied with. The Bond Agreement shall
specify that it shall be made available to the general public for inspection purposes and
may, until redemption in full of the Bonds, be obtained on request by the Bond Trustee
or the Issuer, and such availability shall be recorded in the VPS particulars relating to
the Bonds.
COLG11:
Means the Bond Issue with ticker COLG11 and with ISIN NO 0010699168.
Application for
Bonds and
acceptance of Bond
Agreement:
The application for and subscription of Bonds will occur on the terms of the
application form by the Joint Lead Managers (the "Application Form"), and
subscribers will execute and deliver such Application Form by a signed document,
taped telephone conversation, e-mail or otherwise.
By applying and subscribing for Bonds, the applicant will be deemed to have accepted
all terms set out in the Application Form, including the representations and
acknowledgments set out therein. Please note in this respect that the Bond Issue is
based only upon the Documentation as supplemented by any publicly available
information, and in particular that no prospectus, offering memorandum or similar
document has been prepared.
The signing of the Application Form will specifically authorize the Bond Trustee to
execute and deliver the Bond Agreement on behalf of the prospective bondholders. On
this basis, the Issuer and the Bond Trustee will execute and deliver the Bond
Agreement and the latter’s execution and delivery is on behalf of all of the subscribers,
such that they thereby will become parties to the Bond Agreement.
Minor adjustments to the terms and structure described in this Term Sheet may occur
in the Bond Agreement.
Documentation:
This Term Sheet, the Application Form and the investor presentation.
Finance Documents:
Means (i) the Bond Agreement, (ii) the fee letter between the Bond Trustee and the
Issuer, (iii) the Guarantee, and (iv) any other document (whether creating Security or
not) which is executed at any time by the Issuer or any other person in relation to any
amount payable und the Bond Agreement.
Listing of Bonds:
An application will be made for the Bonds to be listed on Oslo Børs.
Market making:
No market-maker agreement has been made for this Bond Issue.
Eligible purchasers:
The Bonds are not being offered to and may not be purchased by investors located in
the United States except for “Qualified Institutional Buyers” (QIBs) within the
meaning of Rule 144A under the U.S. Securities Act of 1933, as amended (“Securities
Act”). In addition to the application form that each investor will be required to
execute, each U.S. investor that wishes to purchase Bonds will be required to execute
and deliver to the Issuer a certification in a form to be provided by the Issuer stating,
among other things, that the investor is a QIB. The Bonds may not be purchased by, or
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for the benefit of, persons resident in Canada.
Investors located in the US will acquire the Bonds from the U.S.-registered brokerdealers Danske Markets Inc., DNB Markets Inc. or Beech Hill Securities Inc. with
which Arctic Securities AS has entered into a chaperoning arrangement under the
Securities Exchange Act section 15A-6
Transfer restrictions:
Bondholders located in the United States will not be permitted to transfer the Bonds
except (a) subject to an effective registration statement under the Securities Act, (b) to
a person that the Bondholder reasonably believes is a QIB within the meaning of Rule
144A that is purchasing for its own account, or the account of another QIB, to whom
notice is given that the resale, pledge or other transfer may be made in reliance on Rule
144A, (c) outside the United States in accordance with Regulation S under the
Securities Act or (d) pursuant to an exemption from registration under the Securities
Act provided by Rule 144 thereunder (if available). The Bonds may not, subject to
applicable Canadian laws, be traded in Canada for a period of four months and a day
from the date the Bonds were originally issued.
Subject to:
Finalized Bond documentation and approval of Bond documentation by the Issuer and
the Bond Trustee.
Oslo, 21 May 2015
Color Group AS as Issuer
&
Color Line AS as Guarantor
As Joint Lead Managers
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