GK bondholders waive Q1 covenant breaches caused by COVID-19

Around 1,500 of Greene King’s pubs are in a secured financing arrangement with bonds issued by Greene King Finance plc.  There are approximately £1.4bn of bonds outstanding.

Under the terms of the bonds certain financial performance metrics have to be met every quarter.
Prior to the COVID-19 lockdown, headroom against this metric was around 33%. But, due to the lack of revenues during lock-down, the test is expected to fail for the quarter ended 19 July 2020.

On 23 June 2020 Greene King Finance plc invited its bondholders to vote on a proposal to waive this anticipated breach.

On 7 July 2020, the successful outcome of the vote was announced: more than 97% of votes were in favour of waiving the breach.

The waiver was formally documented and prevents creditor action on the basis of the breach.