Company Announcements

Calisen plc ("Calisen" and together with its subsidiaries the "Group")

Calisen announces c.£1.1 billion refinancing securing greater flexibility,
lower Group cost of debt and a diversified funding base

The Group reviews the efficiency of its funding on a regular basis and has now agreed a new financing platform to replace some older bank facilities. The new facilities:

·    Provide access to flexible short-term bank debt and low cost long-dated institutional debt

·    Give greater flexibility to fund existing committed capex for meter installation and new contract wins

·    Reduce all-in Group cost of debt, including hedging, to approximately 2.5% to 3%, from the previous approximately 3% to 4%

·    Replace certain older amortising project finance loans with new facilities including structured institutional debt with a 5 year non-amortising period and longer maturity to December 2034. This doubles the weighted average debt maturity of these drawn amortising loans from 3.8 years to 8.5 years

·    Are supported by an enlarged group of banks and open up access to blue-chip institutional investors

·    When combined with other Group facilities should see the Group remain within existing leverage targets

Commenting, Calisen CFO Sean Latus said:

"I am delighted to announce this new core financing platform, which is an evolution in Calisen's capital structure and is an important step in improving the all-in cost of our funding, generating ongoing interest savings and reducing our cost of capital.

"The refinancing extends the weighted average life of the facilities we have refinanced as well as fixing their cost while interest rates are at historic lows.

"The support that the refinancing has generated from both our existing lenders and new institutional debt providers is testament to the underlying credit strength of our business, allowing us to fund the continued smart meter roll-out more efficiently and deliver on our pipeline of opportunities."

Details of the refinancing

Calisen has agreed to refinance certain of its existing meter funding facilities by creating a new funding platform. This diversifies the Group's financing sources and facilitates future access to debt capital markets to support its continued growth. Financial close is expected in the next two weeks once certain financial conditions precedent have been met and notification periods achieved.

The two existing bank facilities which will be refinanced are for £400 million, maturing in October 2022, and £730 million, maturing in September 2029. These meter funding facilities will be replaced by:

·    A fixed rate institutional tranche of £290 million which amortises from June 2025 and is to be repaid by December 2034; and

·    An amortising bank loan of £192.5 million to be repaid by December 2023.

Additionally, the following committed but undrawn facilities will be available as part of the new structure to fund the continued roll-out of smart meters from the Group's pipeline:

·    An amortising capital expenditure facility of £115 million to be repaid by December 2027;

·    A revolving credit facility ("Platform RCF") of £400 million due June 2025; and

·    A standby facility of £70 million due June 2025.

The total committed facilities under the financing platform are £1,068 million. Following the refinancing, the total drawn and undrawn facilities available to the Group will be £1,526 million.

The refinancing results in:

·    A reduction in the Group's average cost of debt to approximately 2.5% to 3% compared to its previous all-in cost of funds of approximately 3% to 4% (including the cost of hedging floating rate debt to fixed rates) as noted at the time of the Group's IPO in February; and

·    An extension to the weighted average life of the longer-term drawn project finance facilities which are being refinanced from 3.8 years to 8.5 years under the new long-term institutional tranche.

The flexible nature of the financing platform allows the Group periodically to refinance the Platform RCF with longer dated debt, which should thereby allow the Group to continue to extend debt tenors at competitive long-term rates as the smart meter roll-out progresses.

As part of the re-financing the Group will replace some of its existing interest rate swaps at financial close which will result in a one-off cash cost expected to be approximately £43.9 million which will be funded from the new facilities. This cost will be off-set by the benefits of the lower interest rates achieved across the new funding facilities over their duration. The Group will also enter into new interest rate swaptions which will attract an upfront premium expected to be approximately £5.3 million. The existing swaps are carried on the balance sheet at fair value and the mark-to-market liability at 31 December 2019 was £30.3 million. The impact recognised in the income statement in 2020 will therefore be limited to the movement in fair value between 31 December 2019 and financial close, when the fair value of the swap will be settled.

As a result of the refinancing, capitalised debt issue costs relating to the existing refinanced facilities of £14.5 million will be expensed and expected costs of approximately £14.0 million relating to the establishment of the new funding platform will be capitalised and amortised over time.

Media enquiries

Finsbury (public relations adviser to Calisen)

Dorothy Burwell / Harry Worthington

+44 7733 294 930 / +44 7818 526 556

Calisen-LON@finsbury.com

Investor and analyst enquiries

Calisen investor relations:

Adam Key, Investor Relations Director
Tel: +44 161 220 1900 / Mob: +44 7572 231453
adam.key@calisen.com

This announcement has been determined to include inside information.

This announcement includes forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties, many of which are beyond the Group's control and all of which are based on the Directors' current beliefs and expectations about future events. Forward-looking statements are sometimes identified by the use of forward-looking terminology such as "guidance", "believe", "expects", "may", "will", "could", "should", "shall", "risk", "intends", "estimates", "aims", "plans", "predicts", "continues", "assumes", "positioned", "targets" or "anticipates" or the negative thereof, other variations thereon or comparable terminology. These forward-looking statements include all matters that are not historical facts and include statements regarding the intentions, beliefs or current expectations of the Directors or the Group concerning, among other things, the results of operations, financial condition, prospects, growth, strategies, and dividend policy of the Group and the industry in which it operates. No assurance can be given that such future results will be achieved; actual events or results may differ materially as a result of risks and uncertainties facing the Group. Such risks and uncertainties could cause actual results to vary materially from the future results indicated, expressed, or implied in such forward-looking statements. Such forward-looking statements contained in this announcement speak only as of the date of this announcement.