i

Notes on the Condensed Interim Statements
for the period 1 April 2016 to 30 September 2016
14. Hybrid Capital
March 2016
September
2016
September
2015
£m Perpetual subordinated capital securities £m £m
427.2 USD 700m 5.625% perpetual subordinated capital securities (i) 427.2 427.2
598.2 EUR 750m 5.625% perpetual subordinated capital securities (i) 598.2 598.2
748.3 GBP 750m 3.875% perpetual subordinated capital securities (ii) 748.3 748.3
436.0 EUR 600m 2.375% perpetual subordinated capital securities (ii) 436.0 436.0
- GBP 750m 5.453% perpetual subordinated capital securities (iii) - 744.5
- EUR 500m 5.025% perpetual subordinated capital securities (iii) - 416.9
2,209.7 2,209.7 3,371.1
The purpose of the outstanding hybrid capital bonds issues is to strengthen SSE’s capital base and complement other sources of finance.
Further commentary is provided in the Capital Management section in Note 16.
(i)
18 September 2012 €750m and US$700m Hybrid Capital Bonds
Each bond has no fixed redemption date but the Company may, at its sole discretion, redeem all, but not part, of these capital securities at
their principal amount. The date for the discretionary redemption of the capital issued on 18 September 2012 is 1 October 2017 and every
five years thereafter.
For the €750m capital issued on 18 September 2012, coupon payments are expected to be made annually in arrears on 1 October in each
year. For the US$700m capital issued on 18 September 2012, coupon payments are expected to be made bi-annually in arrears on 1 April
and 1 October each year.
(ii) 10 March 2015 £750m and €600m hybrid Capital Bonds
On 10 March 2015, the Company issued £750m and €600m hybrid capital bonds with no fixed redemption date, but the Company may, at
its sole discretion, redeem all, but not part, of the capital securities at their principal amount. The date for the first potential discretionary
redemption of the £750m hybrid capital bond is 10 September 2020 and then these can occur every 5 years thereafter. The date for the
first discretionary redemption of the €600m hybrid capital bond is 1 April 2021 and then these can occur every 5 years thereafter.
For the £750m capital issued the first coupon payment was made on 10 September 2016 and then annually in arrears thereafter, and for
the €600m capital issued on 10 March 2016, the first coupon payment was made on 1 April 2016 and then annually in arrears thereafter.
(iii) 20 September 2010 £750m and €500m Hybrid Capital Bonds
On 1 October 2015 the company redeemed the £750m and €500m hybrid capital bonds issued on 20 September 2010. The redemption
was funded by the proceeds of the £750m and €600m hybrid capital bonds issued on 10 March 2015.
(iv) Coupon Payments
In relation to the $700m hybrid capital bond, coupon payments of £11.5m (2015 - £12.4m) were made on 1 April 2016 and of £11.8m
(2015 - £12.5m) on 1 October 2016. In relation to the €750m hybrid capital bond a coupon payment of £33.6m (2015 - £36.2m) was made
on 1 October 2016.
The hybrid capital bonds issued on 10 March 2015 were both issued with long first coupon payment dates, for the €600m hybrid capital
bond a first coupon payment of £18.6m was paid on 1 April 2016 and for the £750m hybrid capital bond a first coupon payment of
£43.8m was paid on 10 September 2016.
The coupon payments in the six month period to 30 September 2016 consequently totalled £73.9m with a further £45.4m being paid on 1
October 2016.
The Company has the option to defer coupon payments on the bonds on any relevant payment date, as long as a dividend on the ordinary
shares has not been declared. Deferred coupons shall be satisfied only in the following circumstances, all of which occur at the sole option
of the Company:
redemption; or
dividend payment on ordinary shares.
Interest will accrue on any deferred coupon.
70