Company Announcements

LEI: 2138007CEIRKZMNI2979

THIS ANNOUNCEMENT IS NOT FOR PUBLICATION, DISTRIBUTION OR RELEASE, DIRECTLY OR INDIRECTLY, IN THE UNITED

STATES (OR TO U.S. PERSONS), AUSTRALIA, CANADA, JAPAN, SOUTH AFRICA OR IN ANY OTHER JURISDICTION IN WHICH OFFERS OR SALES WOULD BE PROHIBITED BY APPLICABLE LAW

This announcement is released by Grainger plc and contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 and has been announced in accordance with Grainger plc's obligations under Article 17 of that Regulation. For the purposes of MAR and Article 2 of Commission Implementing Regulation (EU) 2016/1055, this announcement is made by Adam McGhin, Company Secretary, at Grainger plc.

Grainger plc

Grainger plc secures £350 million senior secured bond in line with its strategic growth plans

Continued strong trading performance

Grainger plc (the "Group"), the UK's largest listed residential landlord, has issued a £350m sterling-denominated senior secured bond at a coupon of 3.0% for 10 years. The bond is rated BBB- by S&P.

The transaction follows the Company's successful equity raise in February 2020, and forms part of the Company's overall financing strategy to extend its debt maturity profile and align to our long-term private rented sector (PRS) investment strategy.

Following the recent equity raise, the net proceeds from the issue of the Bonds will be used to support Grainger's strategic growth plans, enabling the business to continue to grow its PRS pipeline, and the repayment of a £200m short-term bank facility.

The transaction will extend the Company's weighted average debt maturity profile to 6.8 years and will marginally increase the Company's average cost of debt to 3.1% on a pro forma basis.

Strong performance has continued

Grainger has continued to perform strongly since its interim results announcement on 14 May 2020. Rent collected on-time during May was 96% (March 2020: 95% and April 2020: 94%) with residential rent arrears stable at a low 1.6% by the end of the month. Like-for-like rental growth remains robust, and occupancy levels were maintained over 97%. Momentum in our sales pipeline has continued to build with pricing ahead of valuations.

Vanessa Simms, Chief Financial Officer, said:

"We are delighted by the response to this bond issuance, which forms part of our financing strategy. The success of today's transaction reflects the strength of Grainger's business model and balance sheet, which enables us to continue with our growth strategy of providing high quality rental homes. Today's transaction is an important milestone in extending our maturity profile and provides long-term interest rate certainty at an attractive coupon. This will enhance our funding capacity to expand our PRS pipeline further."

Barclays Bank Plc, HSBC Bank Plc and NatWest Markets Plc acted as joint bookrunners. Rothschild & Co acted as financial adviser.

The manufacturer target market for the purpose of Directive 2014/65/EU ("MiFID II") product governance is eligible counterparties and professional clients only (all distribution channels). No PRIIPs key information document (KID) has been prepared as the Bonds are not available to retail in EEA or in the United Kingdom.

This announcement is not an offer of the Bonds in the United States or any other jurisdiction. Securities may not be offered or sold in the United States absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended (the "Securities Act").

This communication does not constitute an offer of the Bonds to the public in the United Kingdom. This communication is being distributed to and is directed only at (i) persons who are outside the United Kingdom or (ii) persons in the United Kingdom who are (A) investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order") and (B) high net worth entities falling within Article 49(2)(a) to (d) of the Order or (iii) persons to whom an invitation or inducement to engage in investment activity (within the meaning of Section 21 of the Financial Services and Markets Act 2000 ("FSMA")) in connection with the issue or sale of any Bond may otherwise lawfully be communicated or caused to be communicated (all such persons together being referred to as "Relevant Persons"). Any investment activity to which this communication relates will only be available to and will only be engaged with, Relevant Persons. Any person who is not a Relevant Person should not act or rely on this document or any of its contents.

A securities rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time.

This announcement is an advertisement and not a prospectus for the purposes of Directive 2003/71/EC, as amended.

THIS ANNOUNCEMENT IS NOT FOR DISTRIBUTION DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OR TO OR FOR THE ACCOUNT OF U.S. PERSONS (EACH AS DEFINED IN REGULATION S UNDER THE SECURITIES ACT ("REGULATION S")). THE BONDS HAVE NOT BEEN AND WILL NOT BE REGISTERED IN THE UNITED STATES UNDER THE SECURITIES ACT, AND MAY NOT BE OFFERED, SOLD OR DELIVERED IN THE UNITED STATES (AS SUCH TERM IS DEFINED IN REGULATION S) OR TO OR FOR THE ACCOUNT OF U.S. PERSONS (AS SUCH TERM IS DEFINED IN REGULATION S) UNLESS THE BONDS ARE REGISTERED UNDER THE SECURITIES ACT OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT IS AVAILABLE.

FCA/ICMA stabilisation.