Saga successfully refinances corporate debt

Saga plc (Saga or the Group), the UK's specialist in products and services for people over 50, announces that it has secured new credit facilities (the New Facilities) which will refinance the Group's corporate debt in full. The New Facilities materially enhance the Group's liquidity position, significantly increase covenant headroom and provide funding certainty as the Group moves to execute its growth plans.

The New Facilities, agreed by Saga subsidiary, Saga MidCo Limited, with certain funds and accounts on HPS Investment Partners' direct lending platform, comprise:

a £335.0m term loan facility that will be drawn to:

o repay the £250.0m Senior Unsecured Notes, maturing July 2026;

o repay the £75.0m drawings under the £85.0m loan facility with Roger De Haan, maturing April 2026; and

o partially fund transaction costs.

• a £100.0m delayed-draw term loan facility that is available for three years and may be drawn for certain purposes, including the repayment of amortisation within the Ocean Cruise ship debt facilities, M&A and capital investment; and
• a £50.0m revolving credit facility.

The term loan and delayed-draw term loan facilities, which offer significant early repayment flexibility, will mature in January 2031 and are subject to a margin ratchet based on Group net leverage (ranging from 625bps to 700bps), priced with an initial margin of 675bps over SONIA, which will reduce as the Group de-levers. The initial blended pro forma interest rate will be c.7.6% in combination with the low-cost, fixed rate Ocean Cruise ship debt facilities which will be retained on existing terms.

Closing of the New Facilities is subject to customary conditions and is expected to take place by 31 March 2025, together with the repurchase, repayment and cancellation of the £250.0m Senior Unsecured Notes, the £85.0m loan facility with Saga Chairman, Roger De Haan, and the £50.0m revolving credit facility.

The move to refinance follows Saga's announcement on 16 December 2024 of a 20-year partnership for motor and home insurance with Ageas UK and the sale of its Insurance Underwriting business.

The Group was advised on the transaction by Lazard & Co and Freshfields LLP.

Mark Watkins, Saga Group Chief Financial Officer, said:

"This refinancing represents a significant milestone for Saga, providing funding certainty as we target long-term sustainable growth. HPS' substantial investment is a validation of the strength of Saga, our brand, our customer base, our people and the long-term business opportunities we see ahead."