Announcement of pricing of £750 million Bonds by The Wellcome Trust

THIS ANNOUNCEMENT IS NOT FOR PUBLICATION, DISTRIBUTION OR RELEASE, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES (OR TO U.S. PERSONS), AUSTRALIA, CANADA, JAPAN, SOUTH AFRICA OR IN ANY OTHER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

The Wellcome Trust, the UK’s largest charitable foundation and one of the world’s largest funders of medical research, today announces that it has successfully launched and priced £750 million of Bonds due 2118 (the “Bonds”).

J.P. Morgan acted as lead manager and Bank of America Merrill Lynch and Morgan Stanley acted as co-managers in respect of the issue of the Bonds. The Wellcome Trust was advised by CMS and the Managers were advised by Linklaters.

The issue of the Bonds priced at a spread over 2068 Gilts of 80 basis points. The final coupon of 2.517 per cent. is the all time lowest for a 100 year Sterling bond, the lowest coupon for a 100 year corporate bond in any currency, and the lowest coupon for a Sterling corporate bond with a tenor of longer than fifty years. The initial order book was £3.4 billion and, as a result, was 4.5 times over-subscribed.

The Wellcome Trust is a global charitable foundation, dedicated to achieving improvements in human and animal health. It holds a diversified investment portfolio valued in excess of £23 billion (net of bond liabilities) as of 30 September 2017, and spends over £1 billion a year on its charitable activities.

The Wellcome Trust’s investment portfolio has totalled returns of 101 per cent. in Sterling over the last five years, with a positive return in each of these years. For the financial year ended 30 September 2017, the portfolio delivered returns of 17 per cent., representing gains of £3.5 billion. This performance was made up of positive returns in each major asset class. Sterling returns have been 9 per cent. annualised over ten and twenty years.

The Wellcome Trust is rated Aaa (stable) by Moody’s and AAA (stable) by Standard & Poor’s and it is its policy to maintain those credit ratings. The Wellcome Trust initially issued bonds in Sterling in 2006, when it was the first UK charity to do so. Successive Sterling bonds were issued in 2009 and 2014, and a Euro denominated bond in 2015. In preparation for the issue of the Bonds, a segregated account was established in order to plan for the repayment of the Wellcome Trust’s £275 million 4.75 per cent. bonds due 2021.

Nick Moakes, Chief Investment Officer of the Wellcome Trust, said:

“These bonds represent our first ultra-long dated issue and we are delighted to be able to extend access to our strong balance sheet to a broader investor base. We believe we are the only independent charity to issue ultra-long term debt and it is testament to the strength of our financial position that we have seen such strong demand for these bonds. We are grateful to the many institutions who intend to entrust us with their money over such a long period. It has been our strategy to review market conditions regularly and to access the bond markets when circumstances are appropriate. We are pleased to be able to include 100 year debt as part of our offering.”

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DISCLAIMER

Manufacturer target market (MIFID II product governance) is eligible counterparties and professional clients only (all distribution channels). No PRIIPs key information document (KID) has been prepared as not available to retail in EEA.

This announcement does not constitute an offer or invitation to subscribe for or purchase the Bonds and nothing herein shall form the basis of any contract or commitment whatsoever.

This announcement is addressed only to specific individuals who are individuals (i) who have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the “Order”) and qualified investors falling within Article 49(2)(a) to (d) of the Order and (ii) to whom it may otherwise lawfully be communicated under the Order (all such persons together being referred to as the “relevant persons”). This announcement must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this communication relates is available only to relevant persons and will be engaged in only with relevant persons. By reading this announcement, the reader acknowledges that it is a person either (i) outside the United Kingdom or (ii) falling within one of the foregoing categories.

This announcement is an advertisement and is not a prospectus for the purposes of EU Directive 2003/71/EC (the “Prospectus Directive”), as amended or legislation implementing it in any Member State and/or Part VI of the Financial Services and Markets Act 2000 (the “FSMA”). A prospectus will be prepared and made available to the public as required by Part VI of the FSMA and in accordance with the Prospectus Directive. Investors should not subscribe for any Bonds referred to in this announcement except on the basis of information contained in such prospectus. The prospectus, when published, will be available on the website of the Irish Stock Exchange and the Central Bank of Ireland.

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 U.S. SECURITIES ACT OF 1933, AS AMENDED (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.

This announcement does not constitute or form part of an offer to sell securities or the solicitation of an offer to subscribe or otherwise buy any securities. There will not be any sale of the Bonds in any state or country in which such offer, solicitation or sale would be unlawful.

Stabilisation in respect of the Bonds may be conducted in accordance with FCA and ICMA Rules.